Although we think there are exceptions to the rule (Apple, Square), no company ever launches a complete product.
The Lean Startup advocates that entrepreneurs can and should launch products and services that are not %100 percent complete. This idea, of constant experimentation, is not new. Most products that are launched by startups are an initial prototype that tests for market validation.
Big companies, by their nature, don’t do this. At least not all of them.
Starbucks, for example, is an outlier. If you’ve read about how Statbucks got started, then you won’t be surprised. As outlined on a Fast Company article, they’ve recently taken to experiment with new marketing channels, such as Groupon, and in doing so put their huge digital platform to the test:
In late March, as Starbucks was preparing to introduce its first offer on Groupon, the daily-deal service, the coffee chain’s chief digital officer, Adam Brotman, realized he had no clue whether the gambit would pay off. The discount wasn’t for anything crazy like bungee jumps or skydiving lessons–it was for 50% off a $10 Starbucks Card eGift–but to Brotman, the deal was just as risky because of how the company would be offering it. His team had to integrate Starbucks’s eGift platform with Groupon’s system for the one-off promotion, and it was about to go live to the world. “They’d never done deals at the scale we were offering, and we had never put our [eGift] platform through that type of pressure test,” Brotman says. “But we didn’t have the luxury to say anything other than, ‘We think we got this right, so let’s see what happens.’ There are times when we just completely don’t know how things are going to work.”
In a time where we believe large companies should act like startups, there are skeptics who don’t believe this should be case (from the same article):
Not all experts are fans of Starbucks’s quick-draw bravado. “It’s a bad strategy and a bad philosophy, and I think when customers are exposed to this behavior, they’re just ripped,” says Mark A. Cohen, a former CEO of Sears Canada who is now a Columbia Business School professor. “It diminishes your brand equity. You should do everything possible to get it right on day one. Starbucks is not a startup. To behave as a startup is completely irresponsible. Innovation is good, but unwarranted testing at the customer’s expense, even at a rather small scale, is unacceptable.”
Innovation is messy, and no amount of methodologies will save you from this fact.
Anyway, back to the article. Personally, I don’t think this dude (Mark A. Cohen) knows what he is talking about. But, he does bring up an important point: Starbucks is not a startup.
I think it is important to make a distinction here. The words “startup” and “innovation” are becoming so interwoven that they may mean the same thing to most. Let’s make something clear, a startup = does not equal innovation. It is only until the product/service gets adopted and become a “way of life” that we can say that a startup has morphed into value.
Whether or not large bureaucratic companies can innovate is not the issue here, it is whether or not they are willing to take risks and push boundaries. What I mean by this is that in the big scheme of things, there are many ways to change the game. Two of them, is to reset customer and industry expectations. Which is what many companies, in my opinion, never think about doing. Because, put simply, you must get customers uncomfortable.
For example, products or services that reset expectations essentially gets the user/customers to “stop doing something” they mindlessly did before. Paying with cash is not the same as paying with your phone. And, not everyone will do this for various technological and behavioral reasons. But, this is what companies must do.
Therefore, a great CEO, an innovative one, must put on the Chief Error Generation Officer hat on and be the catalyst of uncomfortableness.
Bottom line: There is no innovation without experimentation. That is why companies must nudge their customers/users towards new behaviors. If you don’t do that, eventually, someone else will do that for them.
- How the Lean Startup is Changing Business Big and Small (business2community.com)
- Steve Blank’s Lean Startup Model: Not Just For Startups Any More (readwrite.com)
- Should brands release products that aren’t 100% ready ? (newmediaandmarketing.com)