If you want to climb Mount Everest, you need gear, a plan, and a Sherpa.
IT’S NO USE TO RELY ON PURE GENIUS—either individual or technological—to produce success. Sure, sometimes a lone genius succeeds in creating a breakthrough company. But it’s rare. Instead, if you adopt the framework we use to develop new opportunities—the one illustrated by the birth of Siri, and the other companies described later—it will significantly increase your odds.
The Eight Elements of the Framework
The eight elements in our framework may seem intuitive, but the discipline as a whole is hard to practice. It has been proven over years of refinement by our own experience and that of great entrepreneurs and investors. Most important, it gives you a process for developing your venture without needing to take the risk of rapid pivoting.
Here’s the framework for creating and building a great venture.
- Identify a large market opportunity with potential for rapid growth.
- Identify a differentiated technology or business solution that trumps the competition and provides the basis for market growth. Evolutionary technology or business solutions are not likely to trump the competition or stay in the lead for long.. But note that technology is not usually the first or most important element, and sometimes the answer isn’t technology at all.
- Build a team of people who are experienced in the market and technology space, with the leadership, energy, domain knowledge, and commitment to lead the company to success. .
- Develop a value proposition and a business plan that articulate the company’s value, strategy, and plan, and attract the required capital. Create a great value proposition and business plan. They are the basis of the venture and will remain living documents as the venture develops.
- Find the right investors and members of the board who will be active in building value in the venture. They will be your partners, mentors, and supporters and must give you financial and strategic support through the difficult process of business building.
- Build the organization, and execute with power, speed, and agility. To build a truly great company, it’s not enough to launch it and then sit back. You must find the right people and build the right organization to sustain your success. It’s worth thinking about this at the very beginning.
- Manage success at the crossover stage. Once you’ve succeeded, you must be ready to cross over to becoming a large company. Many organizations fail at this stage, but you don’t have to.
- Ensure the future. Many large companies cease to innovate, or at least struggle with it. By modifying the process that helped you build your company, you can help sustain innovation, thereby sustaining your company for the long term.
We’ve numbered the elements for convenience, but it’s important to understand that when you architect your venture—following the first four elements of the framework—you don’t work on these elements discretely, completing one and then moving to the next. Instead, you develop rough ideas for each element and then iterate on them in any order you choose, successively refining your value proposition. You may discover you’ve wrongly defined your market—too broadly or too narrowly—or you may have chosen the wrong segment. Or you may discover that the technology solution isn’t good for the market you chose—that it will potentially fail in those circumstances. Sometimes your business model won’t be clear for one market but will work for another.
Don’t despair—this always happens. The process of refinement before you create your venture is both essential and enlightening. All that matters is that, in the end, you have all the elements covered. Take the time you need to get it right. Once you have the value proposition, you can build the business plan, seek funding, and start the venture.
Author: Kressel, Henry.
If You Really Want to Change the World.
Harvard Business Review