The race for new revenue – across the chasm

From time to time I stumble across customers that ask me: – Can’t we just build a “Google search”? Or: – We need to develop new products with great user experience faster!

Increasingly over the last decade the world has experienced new products and business models popping up all over the place. They challenge the established players – and often win in the contest of customer engagement.

In the meantime our clients (large organizations) come to us and ask us to help them improve – and speed up – their product development process (they rarely ask us to help increase customer engagement or earn more money). They often refer to the Lean Startup process.

It seems to me that someone has mistakingly interpreted the fact that new successful products are popping up faster than ever due to approaches like Customer Development and Lean Startup. The main reason is actually due to cheap distribution and available technology that enables almost anyone to compete with anyone – on a global scale. Building a product is easy. Anyone can do that in 2015.

Customers sometimes expect us to do this: – Can you teach us Lean Startup – to reduce time to market for a new product – and reach sustainable new revenue faster? This is however where we easily get things wrong. The fact that Lean Startup makes us learn faster doesn’t necessarily mean reducing time to market (we charge early customers to validate ideas, not to make money). In order to create sustainable new revenue we need to solve real problems and excite our customers. That is hard.

This is how the Lean Startup brings value to you:

  • reduce cost
  • reduce the risk of making a bad investment
  • increase our chances of building something our customers want (to pay for)

But we cannot guarantee reaching break even twice as fast.

To illustrate my point I have combined the “Crossing the chasm»-illustration from Geoffrey Moore with the process of building a Lean Startup.

Skjermbilde 2015-03-13 kl. 13.46.30

How fast should we expect to reach the “chasm” and fase our biggest challenge yet of getting into the mainstream? How do we know if we have successfully crossed it?

What is your criteria for starting to invest and scale your product, service or business model?

 

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