Daryl Gibson March 25, 2016
You’ve seen it many times. It’s a common story, one boldly printed in countless high profile business publications and romanticized in movies around the world. Go ahead, roll the dice. Drain your retirement accounts! Max out your credit card, and oh, while you’re at it, get three mortgages on your home. After all, you’re not a true entrepreneur/innovator/ideator until you’ve risked everything!
See it enough times and it’s easy to believe that embracing a high degree of risk is a required pre-requisite to success. A badge of courage. A rite of passage.
But is it REALLY necessary?
The entire startup industry would have you believe it is. After all, developing ideas is a risky business.
Ask most investors and they will tell you that statistically, out of every 10 ideas they invest in, 6-7 will fail, 2-3 will break even and 1-2 will be homeruns that will generate enough profits to justify the other investments. This is a fairly accurate rule of thumb and these odds paint a very bleak picture. Bear in mind that these are professional investors, many of whom are at the top of their game.
As someone who foolishly embraced the “risk it all” mentality for many years only to watch its negative effects on not just myself, but those around me, I feel highly qualified to say there is another way.
A better way!
Before I share it, let’s lay some groundwork with a few basic assumptions...
1. Risk is inherent in the development of every idea. It can’t be avoided.
2. Risk comes in many forms when commercializing an idea such as Human risk (what will people do next? How will they react?),
Financial risk (the timing of cash flows, burn rates, insufficient funding, etc.), Market risk (will the market change or be disrupted to
make existing products and services irrelevant), and the list goes on! But I think you get the point. Risk has many faces and they’re all
3. In the development of every idea, there will be failure somewhere along the way. We’re Humans, it’s what we do. This is how we learn,
refine the idea, and eventually transform an idea into something marketable.
Wow, that’s really depressing. No wonder there is so much failure!
There is no need to risk it all! EVER! (Yes, I shouted that.)
Allow me to repeat it, because I know many skeptics out there won’t believe it.
There is no need to risk it all! EVER! (I’ll stop shouting since I’m losing my voice.)
At Innovative X, we use and teach a strategy for developing ideas that consists of three components: risk management, an effective process and validation.
They work hand in hand to increase your chance of success and minimize the risk, but will only succeed if used together.
Volumes can be written about each of these components, so we’ll stick to the essentials.
The first part of our approach is to apply risk management. In the idea development process, failure will present itself eventually, and so the challenge of someone developing an idea is not to develop the idea; it’s to develop the idea in the least risky way possible. That way, when the inevitable failure does occur, it doesn’t sink the whole ship. Speaking of ships, they said the Titanic was unsinkable…
How does risk management apply to ideas?
Let’s use the word “conception” to refer to the birth of an idea. As the word implies, an idea is just a concept at this stage. Let’s think of this as “Point A.”
We’ll use the word “commercialization” to describe the point in time when the idea is a completely finished product/service as envisioned by its creator. This is “Point Z.”
Now imagine that in order to jump from Point A to Z, you must jump over a bottomless hole in the ground. If you fail to clear the hole, you will fall in and plummet to your death screaming “when am I going to hit the ground” for hours (it happens more than you think!). Spoiler alert: for those who haven’t yet figured it out, the hole represents risk.
If that hole were only 6 inches wide, most people would feel supremely confident that they could jump over it and safely reach the other side. In fact, if someone didn’t clear it, they wouldn’t be able to fit down the hole anyways so the danger is almost non-existent! Theoretically, you could sprain an ankle or break a toenail if you were wearing sandals, so there’s always some degree of danger. (There are some very uncoordinated people out there!)
But what if that hole was 40 feet wide? If someone said they could jump it unassisted, they would be surrounded by small children who would rudely point and ridicule them with mean names like “Crazy idea person!”
Yet this happens all the time (the people jumping, not the rude kids) as people and companies try to jump from Point A to Point Z in as few steps as possible.
Have you ever been one of these suicidal jumpers?
Applying risk management to the idea process consists of dividing that big hole into to many smaller, more manageable holes. This is easier said than done, because finding point B, then Point C, Point D, etc. isn’t always obvious or easy. These are known as iterations. This approach requires patience and creativity, but with practice, it becomes second nature. And now when failure makes its appearance, it can be tolerated, dealt with and we live to come up with ideas another day.
Imagine a traveler that knows where they left from and has a vague idea of where they want to go, but doesn’t know their current location. (This is where my wife and I would argue about the need to stop and ask for directions).
It’s a big problem among those of us with ideas! After all, how can we effectively utilize resources to develop our ideas if we don’t know where we’re at in the idea development process or what we need to do next?
When we at Innovative X finally realized it was the lack of an easy to use, but thorough process, rather than a scarcity of resources as many of us were led to believe, we began creating IDEA ESSENTIALS. This powerful tool, due in early 2016, will confidentially lead ideators through the entire process step by step, at their own pace. Many mistakes will be avoided and development time will speed up. Odds of success will increase and risk will be minimized.
But whether you use our process or someone else’s, it’s critical that you follow a process that you can trust to take you through the entire development cycle.
If we see one mistake repeated over and over again, it has to be that someone has an idea and immediately seeks to either build a business around it, fund it, protect it with patents, trademarks, etc., or a combination of all of these.
But aren’t these things important parts of the idea development process?
Just kidding. Yes, yes they are! Please don’t misunderstand…all of these things are important. They’re just not the right things to do first!
So what is?
The next time you have an idea, fight every urge in your body to write a business plan, lay out big bucks for a patent, track down investors and hound them for money, build a huge team, spend lots of money for expensive office space or try to scale like Google.
Instead, first validate your idea by figuring out if anyone really wants or needs your idea.
Do not pass Go, do not collect $200 until you have successfully validated your idea!
And if your idea won’t validate? Don’t sweat it! Modify it and repeat the validation process until it does or move onto another idea. Validation becomes a filtering process that allows only the best ideas to receive your valuable money, time and energy.
For those ideas that do validate, scale up, take over the world and buy your own island. It’s so easy, even a child can do it. Wait, they are doing it! (But it’s not easy!)
So the next time you hear about someone who risked it all, just think about the thousands who took the same risk and didn’t make it. The odds don’t have to be this bad. There is LOT’s of room for improvement.
Go after your dreams and make them happen! Just be smart; apply risk management by developing in iterations, follow an effective process, and validate, validate, validate!
Good luck and we’ll see you on the island.
Don Dagen Mar 23, 2016
Building relationships may often feel like a low priority task depending on your current focus. The problem is when a key relationship might help bring an idea to life, you would have to take a 6 month detour while building that key relationship. So some portion of your time management should always include relationship building so that you are able to process an idea with trusted people. This type of input comes out of relationships where you have built trust and mutually beneficial interactions over a long period of time.
Have a “serving first” approach: If in every relationship interaction you are asking for something and not offering something in return you will suddenly be treated like the life insurance salesman at a chamber of commerce meeting. If you value the relationship and invest in the other person when you don’t need anything you are improving your chances of gaining their support when you need it later. Daryl Gibson, founder and CEO of Innovative X always ends a conversation by asking if he can do something for the other person. This is a serving first approach!
Empathy goes hand in hand with “serving first”. Sometimes you may detect a need or opportunity to provide a solution that the other person isn’t even seeking. This kind of insight comes from pursuing the other person’s point of view. Stephen R. Covey sums this approach up with — 'Seek first to understand, then to be understood.'
Before technology (phones, email, online chats, texts, etc.) splintered our human communication; being a good conversationalist was enough to build and maintain relationships. In the digital age you can stand out in the crowd by actually pursuing some face to face meetings. But in between those hard to schedule meetings infrequent reachouts can really keep a relationship active with minimal time requirements. I talk to one of my old bosses at least annually on Cinco de Mayo because he always had a department potluck meal when I reported to him. Those kinds of memory prompts can make it easy to never lose track of key relationships.
Another relationship building technique I deploy to great benefit is referrals. When I know that somebody is a good solution provider I will tout them to others I relate with looking for the type of solution they excel in. The same kind of lead referral activity for job hunters, hiring managers, HR, and recruiters are also all great relationship building technique. Once people in these roles know you often have good leads they will reach out to you and maintain the relationship maximizing the results of your efforts!
The path of an idea from your brain’s synapses to a paycheck is treacherous and no one person can provide that entire journey. If you are relating with a diverse group of people then your idea will get many different assists along the way and success is much more likely!
Don Dagen Mar 21, 2016
Parents frequently ask me how to challenge and develop a creative and innovative mindset in their child. My street cred to answer this question:
mechanical engineer (for 26 years)
father of 2 (for 21 years)
son of a father with many hobbies
Maker Faire NYC exhibitor/”maker”
founder of a local makerspace, make717
college instructor (still mastering this challenge of last 2 years)
STEM afterschool program volunteer (for the past 5 years)
Instead of individual things to do, I am going to provide some philosophies that I think will encourage ideators from the earliest age.
“Education is not the filling of a pail, but the lighting of a fire.” A famous poet may not have said it. I may not know who did. But it is true. - Robert Strong.
The above statement is my email signature line. It is something often lacking in education today, and if you parent with the goal of finding your child’s fuel and fan that flame, you will end up with an incredibly inventive son or daughter.
Piaget and Papert talked about “native languages” that each person has. Papert used his knowledge of gears to solve math problems. Has your child found their inner language? Is it music, art, programming, Minecraft?
Today’s state of education means that your children may not have the home economics or shop class exposure that you had. So I will refer to Logan LaPlante and suggest you “Hack your education”, or your child’s education. Using this approach improves the odds of your child discovering their “native language” at the earliest possible age.
Its interesting when we study “creativity” and find that our children lose creativity the more we “educate” them. See this whiteboard animation of Sir Ken Robinson’s famous Ted talk on the state of education and suggestions for improving it, watch for the paperclip invention part where he talks about education causing a loss of creativity. You might just be inspired to effect some of these changes in your chunk of the earth.
Expose your child to “makers” and the maker movement by attending the largest and closest Maker Faire ASAP! www.makerfaire.com
Change your gift giving budget. Rather then just another toy, consider classes at something like http://www.goggleworks.org/
Watch Kickstarter for the new wave of toys like:
Or browse interesting projects at www.instructables.com
Follow these guidelines and you are sure to have fun while inspiring the next young Einstein!
Don Dagen Mar 19, 2016
One of the things I love to observe is how people interact with other people. One of the most frequently ineffective exchanges I observe is an ideator interacting for the first time with someone else. That someone else could be a casual observer, a potential investor, potential partner, consultant, etc. In many cases the ideator may not even know what is at stake. Or some ideators hone their on stage persona but total disregard their one on one interactions.
They may not know that the person they are presenting to could be a key component of monetization of the very concept that they are presenting. Even a casual observer could have huge ramifications as they either forget the idea, or even worse, communicate to others a very negative perspective on the ideator and the idea. I believe many ideators are often unaware of negative perceptions about them or their idea.
You may find yourself pitching your product or service in public settings such as trade shows, meetups, maker fairs, or similar settings once you have a prototype and know that it is “safe” (from an intellectual property viewpoint) to present your concept to the public. I have been attending, planning, and exhibiting at professional trade shows since the early 90’s. And I have been to nearly a dozen maker fairs (large NYC and regional mini maker fairs). Various maker space exchanges, meetups, hackathons, and startup/entrepreneur events round out my observations in this area.
If I have convinced you of the importance of honing your presentation skills, then you will want to tackle the following:
1. Get comfortable talking to new people from different backgrounds in any setting. Volunteering is a great way to accomplish this. If one on one interactions with new people terrorizes you then find a meetup that interests you and start hanging out. Seek meetups that are not “homogenous”. A narrowly scoped meetup for something like programmers may not accomplish the goal of this step, a “new to your city” meetup might be a better fit.
2. Observe interactions at an exhibit based event. This could be Comicon, your local chamber expo, a trade show, or a K-12 science fair.
What booths are hard to pass in the aisle due to “stickiness”? What is that? What are they doing? What is the quality of the interaction?
At booths where the exchange is more one to one, listen to the exhibitor’s first couple of sentences, and watch the body language of both people. Based on my observations it will be easier for you to find “don’t do this examples” than best practices. But you may find somebody doing something or acting in a way similar to your own, so this is like a mirror for you!
3. In the Innovative X IDEA ESSENTIALS' phases and topics you will repeatedly be reminded to not be defensive, but there are many other ways to do damage. Ideators often discount input in a condescending way.
Become an expert in body language. You need to be aware of your own, and a good reader of the other person. Most people will not give you candid advice that they consider negative, so body language may be your only way to know. If you see body language, you may want to open the tone of the exchange in a way that convinces them you are open to constructive criticism.