Recent attention has been given to why so many healthcare startups have been failing. One reason that these young companies may be faltering is that many times their startup journey is inspired by a technology instead of a clearly-defined problem that they can solve. Another common misstep is that companies too often measure progress by product development milestones instead of market knowledge. The good news is that there are proven strategies and process that can reduce risk and increase potential revenue generation for companies of any size.
Focus on Commercialization and Execution
Innovation is not just about creating new technologies – it’s about bringing them to market. In his book, “Disciplined Entrepreneurship,” Bill Aulet defines innovation as:
Innovation = Invention X Commercialization
In other words, execution of a commercialization strategy is just as important as the invention itself. An invention has limited value without a strong, well-executed commercialization strategy. In fact, entrepreneurs should focus on the commercialization strategy before working out the details of an invention. In building a commercialization strategy, entrepreneurs should define the following:
Fleshing out a product after these questions are answered will increase the chances that you are building the right product for the right market, and therefore will increase the probability of commercial success.
Entrepreneurship Can Be Taught
There is a common belief that successful entrepreneurs have an innate talent that uniquely qualifies them to drive the success of a startup. In reality, entrepreneurism can be taught, just like engineering, chemistry, medicine, or any other discipline.
In the past, a similar attitude existed about business skills – individuals were either thought to be naturally good at business or not. One of the oldest universities in the country, the University of Pennsylvania (founded in 1740), established a school of medicine in 1765, but did not establish a business school (Wharton, the world’s first collegiate business school) for another 116 years.
Today, no one would question whether business skills can be taught. The same is slowly becoming accepted for entrepreneurial skills. Leading the way are MIT (Massachusetts Institute of Technology) and Stanford University whose successes are well documented across a variety of markets. Startups from MIT generate $2 trillion in revenue each year and employ 3.3 million people. This incredible success is attributable to MIT’s culture of entrepreneurship education.
Another example of the power of entrepreneurial education is shown through Georges Doriot, a pioneering professor at Harvard Business School, who taught entrepreneurism and venture capitalism. His students used his teachings to manage wildly successful companies such as Intel, Atari, Apple, Tandem Computers, Genentech, Cisco, Google, Yahoo, Amazon and Facebook.
For those who do not have access to entrepreneurship classes, the skills required of successful entrepreneurs can be learned through many excellent books and a growing number of online courses.
Some of these books include:
Disciplined Entrepreneurship by Bill Aulet
The Lean Startup by Eric Ries
Crossing the Chasm by Geoffrey Moore
Business Model Generation by Alexander Osterwalder and Yves Pigneur
Embrace Entrepreneurship at Your Company
Entrepreneurship is not just for startup companies; it should be utilized in well-established companies as well. Any company that values innovation should employ the proven strategies and disciplines of entrepreneurship. New disruptive product ideas should not be managed or brought to market in the same manner as incremental product iterations. Management processes, milestones, timelines and measures of success must all be adapted to avoid bringing a product to market “on time and on budget,” only to find that it is the wrong product or wrong market. That’s why Eric Ries advocates that large organizations should create startups within their organization.
This brief overview of strategies is clearly just the tip of the iceberg. The above literature and many other sources describe proven methods that increase the likelihood of successfully commercializing new ideas. Solid knowledge of manufacturing, engineering and years of experience developing products from idea to on the market make MPE a viable partner. Our capabilities help shrink your footprint and create management processes as a part or as a whole. Despite common belief, the right approach to innovation is to mitigate risk using structure and process. Is your company taking the right steps to promote innovation?