Paralysis by analysis

23. Januar 2015

The cost of starting a business has radically decreased in the last decade. In many ways that’s good news for innovation. But it has also created the impression that the only way to learn is by trial and error, by action.

But, often forgotten, doing without thinking should also be avoided. Or as Scott Antony puts it in a new article on Harvard Business Review:

When It Comes to (Digital) Innovation, Less Action, More Thought

Before you fling your minimal viable product out into the world to see what happens, make sure you have done the following (at the very least):

  • Identify offerings comparable to yours that have struggled commercially … and find out why.
  • Consider why large companies haven’t gone into the space you’re contemplating.
  • Talk to someone who knows more than you do about the key part of your business, and find out if there are hidden risks?
  • Document a single transaction: Who is your first customer? How will he hear about your idea? How will she obtain it? How will you support him if he’s not happy?
  • Find out how companies competing in markets related to yours are doing financially. Are you underestimating what it will take to get to market?
  • Create a hypothesis for how you will make money, and describe it to a savvy friend. Ask that friend to poke holes in it.

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