It's not what you know, it's how fast you learn

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Feb 05 2020 by Rod Collins Print This Article

In his best selling book The Lean Startup, Eric Reis relates the story of how he discovered the value of rapid customer feedback. In one of his early entrepreneurial ventures he had a product idea that he felt sure would be a market success. He poured all his knowledge and a significant amount of money and effort into the robust development of his idea, only to see it fail miserably. Ries was surprised to find that customers had no interest in buying what he thought was a wonderful product. Not wanting to repeat his failure, Ries realized he needed to approach product development very differently.

The most important lesson Ries learned from his failure is that the only opinions that matter when developing new products are those of the potential customers. So, if you want to be sure that customers will buy what you make, get customer feedback as rapidly as you can. And when you do, incorporate what you learn early in product development because the secret to market success, especially in a rapidly-changing world, has less to do with what you know and more to do with how fast you learn.

Learn Early, Learn Cheap

The Lean StartUp methodology has become a template for success in the startup world, saving new ventures both time and money by front-ending problems to either enable an early exit from an idea that wonít work or to come up with a solution that catapults an innovation to enormous success. The importance of this front-ending of customer feedback is captured in the oft-quoted axiom, ďFail early, fail cheap.Ē

Given the continued accelerating pace of change and the exponential increase in market complexity within the past few years, many traditional corporations are beginning to see the value in the thinking behind the very different way that Lean Startup approaches product development. However, when legacy companies first begin to consider Lean Startup tools and practices, the idea that failure is an important part of the development process is often a significant mental stumbling block. Thatís because in legacy thinking failure is often seen as a sign of incompetence and is something to be avoided at all costs.

There is such a stigma to failure in traditional corporations that, in my work at the Salt Flats innovation house, we have refined the axiom to ďLearn early, learn cheap.Ē Today, few, if any of us, get what the customer wants right the first time. This is why the practice of prototyping is so valuable in the Lean Startup methodology. By building a minimal viable product - known as an MVP - a company can put a very early version of a product in the hands of actual customers to get a sense of whether or not customers would actually buy the product if it were available.

Thinking Like Start-Ups

In the legacy business world, marketeers and accountants were the prime influencers of company strategy. If you could beat the competition and make money, you were successful. In the days of siloed industries, business leaders focused more on the competition than they did on their customers. In fact, customers were often viewed simply as the intermediary variable between products and profits.

In the start-up world, engineers and designers are the prime influencers of business strategy. And if the start-up becomes wildly successful, oftentimes its continued success depends upon its ability to preserve the influence of the engineers and the designers, as is the case with Apple. Apple understands their customers and how they feel about their products far better than their traditional counterparts. The same can be said for Google, Amazon, and Microsoft, which may explain why these four companies are the most valuable brands in the world today.

These four vanguard firms are harbingers of a digitally transformed business landscape, which means, if legacy companies are serious about succeeding in a rapidly changing world, they will need to think like the vanguard companies and expand the influence of engineers and designers in shaping business and product strategy. This is an important focus of our work at Salt Flats.

Rapid Prototyping

Salt Flatsí mission is to help businesses gain a competitive advantage by leveraging Lean Start practices to accelerate the development of new business and product models. An essential part of this mission is the prototyping capability of Salt Flats Department X, which is led by Adithya Menon. The Salt Flats prototyping team is a diverse group of designers and mechanical, electrical, and software engineers that help both entrepreneurs and Fortune 500 companies develop minimal viable products that they can use to file provisional patents, seek investment capital, and validate product-market fit.

Menon, who was born in Malaysia and educated in the United States, has a burning passion for engineering and innovation. He has been immersed in the fast-paced world of start-ups and knows how to leverage the power of rapid prototyping. Menon and his team have developed prototypes for a variety of small and large businesses across multiple industries, including the construction, lighting, agriculture, insurance, and consumer electronics industries.

Solving an Irksome Problem

For example, one prototype that helped solve an irksome problem in the hospitality industry involved the development of a retrofittable water system that would continually measure temperature and cleanliness, filling and draining sinks to maintain appropriate temperature, soap, and sanitizer levels.

Restaurant bars typically have a three-compartment sink: the first sink is filled with hot water and soap for washing, the second sink is filled with hot water for rinsing, and the third sink is filled with water and a sanitizing agent. Bartenders are responsible for draining and refilling the sinks with water and adding the soap and sanitizing solution as needed. However, depending upon the time of day and the number of customers they are serving, keeping up with the need to drain and refill the sinks can become challenging and sometimes results in customers receiving dirty or foul-smelling glasses. When this happens, it often translates into lost revenue from dissatisfied customers, wasted water from rewashing glasses, and sometimes costly compliance fines from local health departments.

Menonís Department X was tasked with the challenge of building a workable system within three months for a debut at The National Restaurant Association (NRA) show in May 2018. This would be the venue where the client company would learn whether or not their product idea connected with their customers.

After three weeks of iterative experimenting and learning, a suite of sensors was designed to measure temperature, water dirtiness and pH level of the soap and sanitizer solution. Once the proof of concept was validated, the prototype was designed and built. To deal with the challenge of electronics in water, a custom enclosure was designed and 3D printed to house the sensors as well as a custom designed drain valve.

The functional prototype, which automatically drains and fills sinks and lets bartenders focus their total attention on their customers, debuted at the NRA show where the client received multiple pre-orders, investment commitments, and key business partners - clear signs that customers liked what they saw.

Building Access with an App

Another example of rapid prototyping involved a software company that came up with an innovative application for property managers and office buildings to manage access control for tenants and events. The app would give property managers the ability to transmit permanent or temporary passes directly to tenants or guests for automatic entrance into a building. However, for their innovation to work, the software company also needed to incorporate an important piece of hardware in their product model: an outdoor, weatherproof, access control kiosk that would use an iPad interface to read the access passes contained in mobile phone wallets.

The team at Department X went to work on designing a prototype by putting forward a few renders and concepts based on requirements provided by the client company. The selected design was inspired by the sharp angles seen on stealth vehicles like the Zumwalt Class destroyer and the F-117 aircraft, an archetype that was in line with the companyís branding. To handle the varying temperatures and weather conditions where the units would be installed, the kiosks incorporated thermal management systems that would automatically turn on fans to draw out heat if the temperatures were too high or heat up the iPad when the temperature dropped below freezing.

Rapid prototyping provided the hardware solution needed to market a practical software innovation, but more importantly, helped gauge customer acceptance of the innovative system. Today, these kiosks are providing building access to tenants and guests in the U.S., Canada, and Ireland.

Going forward, all businesses - legacy firms and start-ups alike - need to understand the importance and the value of leveraging the power of rapid prototyping because, in a digitally transformed business landscape, itís not what you know that assures your success; itís how fast you learn.

About The Author

Rod Collins
Rod Collins

Rod Collins is the Chief Facilitator at Salt Flats and the author of Wiki Management: A Revolutionary New Model for a Rapidly Changing and Collaborative World (AMACOM Books).