1. Dynamic venturing: accelerating incubation to transformation
Companies have traditionally approached innovation through a range of activities, from hackathons to corporate venturing; yet, these activities often are not tied to a desired outcome for a given phase of innovation. “What is really needed”, says David Jensen, EY Americas Disruptive Innovation Leader, is “dynamic venturing with a more holistic view of how to use a range of external relationships to innovate.”
Dynamic venturing matches the innovation tool — whether innovation challenge, accelerator or spin-out — to the business need at each phase of the innovation continuum, from early stage ideation to later stage scale-up. Its goal is to augment the corporate build-partner-buy activities with the accelerated processes used by lean start-ups — the iterative build-measure-learn cycle that results in rapid prototype development.
2. Shift from MVP to minimal viable segments: gain traction faster
The creation of a minimum viable product (MVP), defined as the minimal product to meet the needs of the market, has been viewed as an important step toward transformation. However, the MVP is not adequate, given exponential technologies and business models. The concept has largely failed in practice because it leaves out critical piece of information: customer need. The resulting product is neither minimal nor viable. Feature creep is big issue as companies try to develop features to address disparate customer concerns, yielding a product that doesn’t work for any one of them.
It is time to move away from the MVP in favor of the minimum viable segment (MVS), in which the minimal product is tailored to the needs of a specific set of customers. By providing a go-to-market product fit, the MVS is highly referenceable (i.e., users will refer other potential users), predictable (i.e., a consistent, known buyer) and allows a company to become a market leader in that category. Growth comes from dominating a very small market and then partnering with other developers to create the next MVS in an adjacent space.
3. Fund transformation
Providing appropriate resources to the activities in each zone on the two horizons is imperative. Too often companies fail at transformation because they don’t invest the right amount of money for the appropriate amount of time. They short-change the scale-up and business transformation, funding it like incubation. Achieving results with an innovation is only the beginning of the journey.
Watch this video from the EY Innovation Realized summit to hear business leaders answering the question: how to defend and protect your business of today while positioning for growth tomorrow?