janus-project

But giving up the pursuit of innovation seems less than satisfying, if not unrealistic. Executives will always look for ways to achieve meaningful growth and engage in strategic renewal. If the odds were 99:1 against breakthrough innovation inside the mature company, we'd still see leaders chasing after that golden ring.

How do you avoid wasting millions, if not billions, on projects destined for failure?

If they'd been able to pay the same amount for different packaging on the open market, what would the outcome have been

We can't know for sure. But one thing is certain: faced at the onset with internal pressure to drive cost out of production, it was far less likely that Gerber could truly innovate. It could not build an adult food business within its existing structure.

Incentivize for long-term viability

Though giving away free support and access to infrastructure is vital in this process, doing too much of this can backfire

Test to learn

Simple, rapid, experiment

One-week iteration

"rapid experimentation" and "validated learning" as abstract concept

successful companies get so tied up in their own culture that they develop blind spots.  By focusing exclusively on the processes and standard operating procedures that made them successful, they become victims of their own success

Sony missed out on the iPod/iTunes revolution because they were so ingrained in the traditional music business

In both cases, they were focused internally on what they could deliver instead of looking externally at what their consumers actually wanted

Think Ecosystem, Not Just Product

The key to business model innovation is to think holistically about the entire business, not just new product development

Jay Terwilliger presented a three-dimensional framework for thinking about business models: Create Value, Deliver Value, and Capture Value

To create value you need a value proposition that effectively differentiates your offering and fulfills a want/need for an underserved segment of consumers.  Delivering value requires determining the key activities and resources your organization will need to fulfill the value proposition.  Activities and resources include elements like physical resources, human resources, supply chain management, partnerships, and technology.  Capturing value is about creating a profitable revenue stream.  Value can be captured in a variety of ways, including one-time payment, subscription, or through advertising

The point is that innovation can occur anywhere in the operation

The best business models, such as iTunes, “expand the pie” and increase value for the entire ecosystem

John described how a separate, autonomous team explored future trends and the impact they would have on Millipore’s business

John Lynch described the Future Pull process EMD Millipore

The core team worked nearly full time on the project and included senior executives right on up to the CEO

The team’s goal was not to predict the future, but rather to consider various scenarios and contemplate the impact they would have on Millipore if they were to occur

operated like venture capitalists

Innovation teams “pitched” their ideas to the board for funding

four drivers of innovation: competition, customers/consumers, technology, and regulation

need to protect the core while establishing new capabilities

only way to establish new capabilities is to experiment, learn, and adapt

The group was given part of an example business model and each table was asked to come up with revenue models

new-growth factory

a completely different form of interaction with customers

Steve Wozniak's problem was that he wanted his own computer. That was an unusual problem to have in 1975. But technological change was about to make it a much more common one

What matters is not the absolute number of new customers, but the ratio of new customers to existing ones

A good growth rate during YC is 5-7% a week. If you can hit 10% a week you're doing exceptionally well. If you can only manage 1%, it's a sign you haven't yet figured out what you're doing.

The best thing to measure the growth rate of is revenue. The next best, for startups that aren't charging initially, is active users

Focusing on hitting a growth rate reduces the otherwise bewilderingly multifarious problem of starting a startup to a single problem

Nine times out of ten, sitting around strategizing is just a form of procrastination

The fascinating thing about optimizing for growth is that it can actually discover startup ideas

anything that grows consistently at 10% a week is almost certainly a better idea than you started with

A company that grows at 1% a week will grow 1.7x a year, whereas a company that grows at 5% a week will grow 12.6x. A company making $1000 a month (a typical number early in YC) and growing at 1% a week will 4 years later be making $7900 a month, which is less than a good programmer makes in salary in Silicon Valley. A startup that grows at 5% a week will in 4 years be making $25 million a month

The mistake they're making is that by basing their opinions on anecdotal evidence they're implicitly judging by the median rather than the average

The reason VCs like to invest in startups is not simply the returns, but also because such investments are so easy to oversee. The founders can't enrich themselves without also enriching the investors.

Growing too slowly is particularly dangerous in a business with network effects, which the best startups usually have to some degree

Raising money lets you choose your growth rate

Even if an acquirer isn't threatened by the startup itself, they might be alarmed at the thought of what a competitor could do with it

[14] Understand

If you want to understand startups, understand growth

Growth is why VCs want to invest in startups: not just because the returns are high but also because generating returns from capital gains is easier to manage than generating returns from dividends. Growth explains why the most successful startups take VC money even if they don't need to: it lets them choose their growth rate

Strictly speaking it's not lots of customers you need but a big market, meaning a high product of number of customers times how much they'll pay. But it's dangerous to have too few customers even if they pay a lot, or the power that individual customers have over you could turn you into a de facto consulting firm

If the startup is taking the Facebook/Twitter route and building something they hope will be very popular but from which they don't yet have a definite plan to make money, the growth rate has to be higher