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The rate of change is ever increasing. Consumers are adopting new technology faster than ever before and their behaviour and expectations are changing. As Per Sundin from Universal Music Sweden puts it, ‘Things have never moved this fast, and will never move this slowly again’. Businesses have to respond. And there are two trends emerging that will help companies do just that – the lean startup movement and the connected economy.
Up until now the response has been a slow and measured one with businesses adopting a cautious approach to innovation trying to get things ‘as near to perfect as possible’ before implementation. This results in lengthy lead times in product or service development and to innovation in general. Businesses should consider rethinking this approach and lean startup is one of the preferred approaches to deliver on this challenge.
Trend 1: The lean startup
In its essence, lean startup is a new way of managing a more uncertain environment in a more scientific way. It assists businesses in testing project-related hypotheses as quickly as possible. A hypothesis is a set of assumptions that are deemed as the starting point for further investigation. So for example a number different product offerings, payment options, value propositions or even digital platforms could be presented to potential customers in order to get feedback and responses – with the ultimate goal of doing the right thing, right. It’s all about changing the way you measure progress and revolves around learning.
By using the concept of getting a ‘minimum viable product’ to market in the fastest possible time is the ideal way to test what you are trying to prove – ultimately, what do customers want and how are you going to make money. We need to constantly be learning about what value is for their customers and who their customers are, based on a hypothesis rather than perfectly executing a plan that is utterly flawless.
Success should be based on how much validated learning is happening and how quickly this is happening through experimenting and learning from your customers. Lean startup is cyclical in nature moving from the idea to building the product, to measuring the data, learning from it and then using it to generate the next idea and so on.
A great international example of the success of lean startup is Zappos – an online shoes and clothing store renowned for its great customer service. Instead of waiting to bring a flawless site to market, the creator decided to rather visit a shoe store, take pictures of the most popular shoes, and put them online to test the assumptions around selling a product such as shoes online. These included: would people buy shoes online, how are returns handled, what information do potential customers want about shoes, how to they compare shoes online, how are international sizing complexities handled, and many more. This basic site gave rise to a billion dollar business that was eventually acquired by Amazon.
In emerging markets like South Africa, Carfind used the same approach. The initial Carfind site was a basic site aimed to link car buyers with dealerships. Initially all Carfind was interested in was finding out what their users were looking for and how they did this. Based on this information, they then built the next part of the site and so it developed.
Lean startup is already a global movement. Businesses need to take conscious steps to move at a pace the market requires and look at every new product, business unit or development through the eyes of an entrepreneur.
Trend 2: the connected economy
Another trend that businesses should be keeping their eye on is the much-spoken about connected economy. And, the connected economy is powered by connected devices. What’s most important is how businesses will apply this concept to their organisation in the coming years. The introduction of smartphones into our daily lives has opened the possibilities of connecting to peripherals. What are peripherals, you ask? They are small, portable objects that can be plugged into or connected to a device. Smartphones have all the computing power needed to run other devices and innovative products are hitting the market almost daily.
The medical industry is benefiting from peripherals such as the IBGStar – a blood glucose-testing device that is plugged into an iPhone and, together with the Diabetes Manager App, helps users track blood glucose, carb intake and insulin dose. The possibilities to use this info, not only from one user but linking multiples users, can provide the industry with trends and statistics that will lead to ground-breaking innovation.
The banking industry has also seen the effects of peripherals through the introduction of devices such as Square – a simple add on for smartphones to take card payments. You can literally swipe you card through the Square device attached to the smartphone and instant payments can be made anywhere at any time.
Along with peripherals, the rise of sensors is changing the world dramatically. Sensors are devices that read environmental factors and present them in understandable formats or analysis, recording or comparison. Today we find sensors in almost everything from cars and shoes to industrial units and mobile phones. Using information gathered from these sensors, organisations, cities and even countries could drastically change the way processes are managed, maintenance is done and business is run. The potential for cost-saving and reducing the environmental impact is vast.
So what does this mean for business owners? Firstly, decision-makers need to determine how sensors can gather information or data to help improve business operations and customer experiences. They also need to look for peripherals that could result in more efficient job tasks and how the networked devices impact business effectiveness.
Most importantly – be agile and realise you are part of a changing world. Consider new ways of doing things and keep an eye on what is hot and happening in your industry. Remember, we tend to over estimate the rate of mass adoption of technology but under estimate its impact when it is adopted.