The Initial Public Offering (IPO) by Facebook last week highlights the classic American dream of “maverick start-up starts small, grows exponentially and hits the jackpot. ” Only… it doesn’t actually happen in a straight trajectory, as any entrepreneur or adviser will tell you, including Mark Zuckerberg.
Zuckerburg’s management of Facebook’s evolution is a good illustration of one of the dilemmas of being an innovator: when and how do you go to market? When and how do you grow to the next stage?
Facebook “went to market” when Zuckerberg posted his collection of “faces” at Harvard, and much to his surprise, got a zillion responses. The rest, as they say, is history…
When do you go to market? Well, it depends… on your industry, on your competition, on the quality of your product, on market tests, on your team, and on how well you-the-entrepreneur handle being out of your comfort zone.
I spoke with several seasoned entrepreneurs and coaches about this issue, and we all affirmed that circa 2012, the best plan is “Fire, Ready, Aim”:
1. Fire: Test, test, test:
“You go to market the day you start, which is different from launching the product,” said Steve Blank, serial entrepreneur, adviser to the National Science Foundation, professor at Stanford and Columbia Universities, and author of The Start-Up Owners’ Manual. “Our mistake has been confusing the two. You constantly want to be testing the smallest possible product you have with as many people as possible and as quickly as possible … When you start getting the repeatable and scalable response you’re seeking week after week, then maybe it’s time to launch,” Blank adds.
As Ann Bevans, a specialist in web design and owner of Ann Bevans Collective said, “In software development and on the Web, crowd-sourcing research and development has become a way of life. Programmers have gotten comfortable with the idea of creating a simple version of their product and pushing it out for customer feedback.”
Serial entrepreneur and coach, Stefan Doering said to “speak to the skepticism before it speaks to you, before others criticize you for it.” He suggested saying something like, “We know there are problems with it, so we need your help to perfect it.” Admit there are flaws and ask for help to find and eliminate them.
a) Fine-tune — for quality: Testing and listening will enable you to improve the quality before you “go live.” You’ll fine-tune your product/service, your pitch, your packaging, and your supply chain issues. Nicole Woolsey Biggart, Professor of Management and Chevron Chair in Energy Efficiency at U.C. Davis says, “Trial markets can teach a lot.” Things will happen anyway, but you will be testing your delivery system so you “get things as right as possible,” as Professor Biggart said. She added, “There can be a real backlash if you have a good product launch but can’t keep up with demand. Consumers will be turned off and it’s expensive to get them back — if you can.”
b) Define the desired outcome: Do you want “buzz” — people talking about your product in social media? Sales? People signing up for free demonstrations? Do you want the “established” press covering your product?
c) Have the right team in place: Putting the right people in the right seat on the right bus, as Jim Collins put it in his bestseller, Good to Great, is so critical. You need entrepreneurial types, not corporate execs who are accustomed to big budgets, big staffs, a well-trodden path, and established brands. You have to develop and sell an unknown, so you need people who can deal with an intense level of ambiguity, lack of structure and resources, and can carve a new path. The team includes a “support system,” as Doering calls it, of coaches, advisers, people who have experience in the industry or transferable skills “who can see the things that will trip you up along the way and keep you focused… and hold you accountable.”
3. Aim — Plan but…
Plan but don’t over plan and don’t spend so much time planning that you delay testing for too long. And, let it evolve. Doering quotes Ben Franklin’s, “Those who fail to plan, plan to fail.” Blank recommends an untraditional approach of a business canvass that reflects how the areas of the business interrelate. It also allows for the flexibility required of an early stage company. Evaluate risks and mitigate them, but don’t let them paralyze you.
Going to market is inherently uncomfortable — indeed being an entrepreneur is inherently uncomfortable; you’re stretching yourself. “Successful entrepreneurs need to embrace being in the uncomfortable zone, the unreasonable zone, which is where (stuff) happens, Doering said.
There will always be something else you think of to do before you go to market (your insecurity speaking?), but there comes a time when you hold your nose and jump in.
The good news is, we live in an iterative society — you can always come out with version 2.0 or 3.0 later. Indeed, Steve Jobs is known for holding back features on the latest iPhone in order to build a market for the next one.
Fire, Ready, Aim. Repeat.