Innoway recently had the privilege of attending the Lean Startup Summit in Amsterdam. The summit brought together some of the finest practitioners of Lean Startup methodology from across the EMEA region.
As well as workshops and mentoring sessions, there were several high-profile keynotes.
While it would be all but impossible to put down everything we learned from the summit into a single blog post, we’ve compiled some of the most important lessons from those keynotes.
The corporate startup: Execute & Search by Tendayi Viki
The number one takeaway from author and innovation consultant Tendayi Viki’s talk is that in order to be sustainable, modern organizations have to execute their current business model while searching for new business models that will make the organizations sustainable in the long term.
In doing so, it’s vital that organizations take a balanced approach to executing their current models while searching for new ones. It’s also vital that they allocate sufficient budget and resources to the search for new business streams.
Another lesson from the talk is that it’s important to practice innovation.
Generate innovative ideas, lots of ideas, and build a system to filter out the ones that don’t bring any value. Gradually, increase the allocation of people and money to those ideas which have the most traction. Ask the right questions and kill ideas without evidence of validation as fast as possible.
Finally, Viki pointed out, the best way to kill innovation is to measure it with ROI. Innovation must be measured by stages and KPIs must be set by innovation stage: idea generation | idea experimentation | scaling.
You can’t pick the winners without picking the losers by Alex Osterwalder
Another great speaker at the summit was Swiss business theorist and entrepreneur Alex Osterwalder.
Among the main points of his talk is that innovation is a numbers game. The more ideas you generate and test, he pointed out, the more chances you have to succeed.
The average venture capitalist in the US (top professionals at evaluating and investing in innovative ideas), for example, gets a 10X return or higher on just 4% of the ideas they invest in.
For this reason, VCs invest in lots of ideas. They know the only way to catch winners (return higher than 10x) is by investing in a lot of ideas and then assuming that 96% will fail. The VCs know that the 4% that work will more than make up for the rest.
Similarly, companies should generate and test lots of ideas, knowing that only a few will be successful. You can’t pick the winners without picking the losers.
Three innovation pitfalls by Brant Cooper
The final talk we took some big lessons from was the one given by Brant Cooper, the New York Times bestselling author of The Lean Entrepreneur and co-founder of Moves the Needle.
He sought to address some of the most common innovation pitfalls companies fall into. The first pitfall is the belief that innovation is an open-ended process centered on generating ideas. It should, instead, be about finding ideas to innovate around. It’s also important to remember that organizations should focus on figuring out what business areas they want to innovate in as well as the ones they should ignore.
Another common pitfall is to treat innovative ideas the same way as you do projects in the core business. Innovative ideas have lots of uncertainty and thus can’t be treated like any other project. Writing business plans for innovative ideas is a waste of time. Innovative ideas must generate evidence of value quickly and progressively or be discarded in favor of focusing resources on generating and testing other innovative ideas.
The final pitfall organizations fall into is obsessing over vanity metrics. Some innovation metrics might be misleading because they make you feel good but do nothing to validate your innovative ideas.
The most common vanity metric to measure validation of innovative ideas is website visits for a landing page. Lots of page visits might make you feel good, but they’re in no way evidence that your ideas are valid. Instead, you should look at things like sign-ups, registrations and payments.
For more wisdom on how to apply Lean Startup methodology to your business, contact us here.
