Startup Grind is still the Status Quo

We are seeing more and more evidence that the Lean Startup model of starting and growing a company is fraught with pitfalls. The process entails a linear approach to organic sales and corporate growth strategy. Getting the product solution fit nailed then approaching several willing subjects to try to ascertain product market fit. The acid test is whether or not an early stage prospect passes over their credit card to both validate your value hypothesis and convert to a customer!

There are actually two very linear trajectories in play. The first is the aforementioned startup process and the second is the linear product development life cycle. This linear milestone is built around the MVP being developed for early stage validation and feedback. Makes sense when the product or services being developed are also predictably linear. In this case, it’s worth explaining the product in question is fairly straight forward in terms of complexity in development and also how it is deployed as in UX/ CX. It is deployed and customers can test it and use it with little after sale care or support. An example may be a simple IoT sensor based hardware device.

IoT and the Grind do not create valuable innovation outputs

In terms of IoT and more complex, multi-vendor/ multi-technology solutions which also entail new business models and potentially Service Level Agreements (SLA’s) it’s almost exponentially more difficult to simply engage prospects and in due course, convert to customers. The entire process takes longer, requires more resources and has the added ongoing support capability requirements. An example here would be a connected IoT product that changes how the company interoperates with customers. The product would provide live interaction and dashboards making use of data and machine learning for example.

For burgeoning startups, these key friction points cost a lot more runway investment than less complex solutions. The corporate strategy to lead the company into the right direction falls upon the founder/ CEO, who in many cases does not have the experience to navigate the many possible pathways to explore. The added friction comes in when prospects fail to convert to customers because the company is not backed beyond a privately sourced seed investment or government grant.

This leads to the “chicken and egg” scenario, where if the company had funding they could thrive, but customers won’t jump in without a solid venture partner. To us, this is the antithesis of why entrepreneurs create startups and why people invest in early stage companies! We have a seen a stream of venture funded companies fail with solid venture rounds. Many of these emerged from CLA’s or College Lead Accelerators in the past.

The focus has been on propping up a slew of rickety companies in the sense that they need to follow the commercialization pathway outlined herein. If it leads to chicken- egg outputs, why do we keep expecting better results?

What if we focused on the value or “secret sauce” vs. the entire solution going to market? We have the ability to track and manage nascent IP, or pre- legal patent processing using the Open Innovation model. Trusted and transparent exchange of ideas, concepts and secret sauce when coupled with growth partners helps eradicate that chicken-egg fiasco.

Open Innovation based Optioning

Here is where we introduce the concept of corporate strategy optioning. Using Open Innovation, we can engage with potential customers without fear of failure by relying on our capabilities and not business funding status. The rudimentary operations are as follows;

Optionality
It’s the CEO’s job to create optionality for the business and be prepared
for different outcomes.
Expanded Business Opportunities
It can help you develop new technology alliances and go-to-market
partnerships.
Intelligence
You’ll uncover important insights about your market and how the largest
players view your space, plus you can educate them on the market.
Relationship Building
You’ll be investing in and building long-term relationships. This will give
you a better chance of being in the right place at the right time later.

We can help startup companies move the needle and get partnered up with corporate sponsors AND technology partners while solving for the product solution fit/ product market fit cycle. The best option is not having to rely on the Lean Startup growth model to support the chicken- egg cycle of doom.

Several funding and partnering opportunities arise where joint ventures, mergers and acquisitions and investments can be facilitated by us and the ecosystem of supporters we are working with.

Hit us up on the Startup Program page to introduce your company and see if corporate strategy optioning can help make chicken omelets 😉