Article of the Day
Biomimicry: using nature’s designs to transform agriculture – The Guardian
Everything about my journey to get Spanx off the ground entailed me having to be a salesperson – from going to the hosiery mills to get a prototype made to calling Saks Fifth Avenue and Neiman Marcus. I had to position myself to get five minutes in the door with buyers.
~ Sara Blakely, Spanx Founder
Prototyping to Success
Startup companies by reputation have a high failure rate, as high as 50 or more percent depending on the analysis and author. Why? The reasons are plentiful, but in looking through literature on startup failure there is one reason that doesn’t drive failure, product flaws.
Fundamental flaws in startup business’ products and technologies are rarely the primary source of failure; perhaps less than 20 percent. Rather startup failures result from problems with early customer development, business model mistakes, financial mismanagement, etc.
I have served as a panelist for the Successful Farming Innovation Showcase. In this contest, contestants submit their inventions for evaluation of business potential. The proverb ‘necessity is the mother of invention’ fits most of the inventions I have seen come through this contest in that farmers build things solve day-to-day problems they experience. Time may be saved, a sore back avoided, or an improvement in method or machine is developed.
What many of the farm inventions lack, however, is substantial business potential. The inventions may:
- Lack scalability in that they solve a problem for the inventor but there is a lack of others that experience the problem in the same way
- Not have enough value to compel customers to pay for the solution
- Not present a unique solution that will differentiate the invention enough from existing alternatives to get to launch in a competitive marketplace
- Be so complex that the likelihood of widespread adoption is low
Development of prototypes is one means for an entrepreneur to try to avoid these types of pitfalls in development of their business. However, development of a prototype in isolation from prospective customers can also be an empty exercise. Entrepreneurs need to develop prototypes. Most importantly, they also need to test and evolve them while experimenting with prospective customers.
I experienced this, more by accident than design, at my first startup, E-Markets, in 1997. I had developed a very crude prototype for a browser-based application. Ultimately, our first customer pointed at the prototype on projector screen and said they wanted to buy it. But they really didn’t want to buy the prototype. Rather they wanted to buy a much more developed version of the prototype that was highly customized to their needs. During about a 4 month process, we worked daily with the customer and their network of business partners to develop a solution. In the end we had simultaneously developed a much better application, but had also achieved the buy-in of employees of the customer organization and a network of others involved in their business.
Prototype development, in the ideal, isn’t a linear process. Instead it’s an iterative process of evolving the prototype or prototype idea based on rich interactions with prospective customers. This interaction leads not just to a better prototype, but to the winning business model that contains the new product and/or service.
Developing a prototype while engaging potential customers helps discover and validate the important details of their problems and needs. Most importantly, the engagement process converts those potential customers into real, paying customers. As you develop those paying customers you’ve developed and built a company and business.
In 1997 my prototype work was an Internet-based electronic commerce application. It melded business processes in the agribusiness space with software that enabled new types of more efficient and effective behaviors. Much to my pleasure, I have had Iowa State University students apply similar methods to their products.
Colin Hurd at Agriculture Concepts developed the roughest of prototypes while a junior at ISU for what became his Track Till product in 2012. In 2013, prototype number 2 was a much more sophisticated product that has much resemblance to today’s commercial version and got Colin his first sale. In 2014, he sold a more refined product, not anymore a prototype, that is now being scaled up.
Ryan Augustine was senior at ISU in 2012 when he developed the business concept for AccuGrain. The business anticipated using an ISU-patented technology for using X-Rays to measure grain flow. By 2013/14, Ryan had secured the funds and expertise to develop prototype number 1 for AccuGrain. In 2015 he developed prototype number 2, tested it, and now is making his first sales.
Clayton Mooney, Elise Kendall, Ella Gehrke, and Mikayla Sullivan developed the concept of a mobile food dehydration unit and formed Kinosol in 2014. They competed in the Thought for Food Challenge, making the finals in 2014, and continued to evolve their product through testing and prototyping. Today, the Kinosol team is on prototype number 7, marching ever closer to commercial launch through trial and error in various locations around the world with prospective customers.
Prototyping while developing customers is one way that entrepreneurs fail successfully. The only thing you know when developing new product and service concepts, is that they will be wrong. The technology won’t work as envisioned, it won’t have a clear value, it won’t meet the needs of a type of customer, etc. Product successes arise from the learning that happens while interacting with prospective customers who are experiencing use of the new product. Sales is an essential function of the prototyping process.