Experimentation Is Not Free

All it takes is one. But you have to pick the right one. One of the big challenges of every entrepreneur is getting that first client, because it means validation; that first client is and should be an early adopter (check out my post on what early adopters look like). This is even harder in the B2B space where you have to deal with bureaucracy and other obstacles that require lots of patience and follow through.

With that said, doing B2B business in Mexico puts that patience to the test because Mexico is a laggard country; mexicans don’t adopt new ideas and technologies until everyone else has. So that’s one obstacle, the other is the copycat cultural mindset of Mexico, which makes it difficult for innovators to get early adopters. It’s vey simple: Mexican companies want ready-made solutions that already work elsewhere, for many years; not something to build from scratch for themselves.

Let me tell you an all too common story of how this plays out…

There is no innovation without experimentation

At Netek we had an interaction with a large well known Mexican company for almost a year, multiple calls with ideas. This company is a small conglomerate which also provides banking services to its customers. Our emotion recognition technology piqued their interest and they wanted to use it to reduce the number of people who don’t pay their loans.

This is not a plug-and-play technology, in the sense that it works out of the box in any situation. Whether it’s hiring, marketing, employee and customer satisfaction, finance, security and others; we’ve found, through experimentation, that you have to adapt it to each case.

Emotion recognition solutions are still ugly babies, so there’s no clear path to achieving outcomes; which means we have to experiment. But the word “experiment” does not bode well for a bottom line focused organization. The pilot they wanted to run with our technology was not small potatoes, nor was it something that didn’t require hands-on support.

Still, in the end, this company wanted help for free. Yes, free. To do a lot of work and help them figure out how to integrate emotions into their existing algorithms. The reason they do this, and it’s normal across Mexico, is to squeeze as much value from a provider as possible without taking any risks or spending any money. It’s a mindset that hinders innovation, because providers give into the ploy just to say they have a client.

Unfortunately this helps nobody, because it just creates a habit and culture of risk aversion where people simply say “this is the way it is, we can’t play hard ball with the big companies”.

Remember, there is no innovation without experimentation, and experimentation is not free. Here’s why you shouldn’t play their game:

  • Experimentation is a skill. The team is composed of people who have ‘been there done that’ as it pertains to experimentation and figuring out a way forward. Remember, entrepreneurs are great at navigating and mitigating risk; most large organizations suck at experimentation.
  • Insight has value. Almost 4 years doing R&D on emotions, we know it’s not easy to automate.
  • Speed and perspective. The ROI of experimentation is insight. You do it quickly find out what works and what doesn’t. Again, most large organizations suck at this because they’d rather have process rigor to feed their certainty craving.

So why don’t established organizations like to experiment?

Fear of loss. They’re addicted to certainty, so they’re worried of losing money if an experiment fails. But not trying is the biggest failure of all!

Key Takeaways
  • Organizations that manage innovation the same way they manage their core business are playing the wrong game. Playing the long-game requires resources, time, and you will have to experiment.
  • Hiring for innovation, whether it’s internal or external, takes a different approach and mindset. Experienced innovators are great experimenters, they know how to navigate and mitigate risk; this is a valuable skill which many established organizations lack.
  • Experimentation is the shortest path to innovation.