Making Ideas Real

(Or Product Management). There are two ways to make ideas real, with important differences.

1. Corporate world

In the corporate world, the process doesn’t start with an idea, but a gap in the market. This is the classical Product Management process. In most cases, the market is known. That is where the corporation already does business and already has customers.

Interestingly, while corporations are keen to save costs by outsourcing (think of HR, facility management, IT, manufacturing, administration, installation, sales, marketing, development), Product Management seems to be one of last. There just don't seem to be interim or contract product management positions - if you disagree, please let me know!

2. Startup world

In the start-up world there may not be formal process, but there are steps that the entrepreneur needs to take.

Idea

An idea comes first. This might be an invention or a vision. From here, if he can afford it, the entrepreneur can just do it. There are lots of examples of this approach: how many times did Henry Ford fail before the Model T? Given enough passion and luck, it is possible this will be the foundation a viable business.

If the venture needs funds. Investors will need to see something compelling. In addition to the Pitch, this will probably mean a business plan, market analysis, cashflow forecast. Some sort of stab at a valuation is needed to start negotiations between the entrepreneur and the investors.

Differences

In the corporate world, an idea is turned into a product by a team including a product manager. The process is rigorous. (Usually) only ideas which are likely to make money are turned into products. On the downside, ideas are only evaluated in pure monetary terms. Finding gaps in existing markets mean that products might respond to (and therefore lag) the market. Market-leading ideas might be overlooked.

In the startup world, the idea probably comes from entrepreneur himself. And he just does it. He may have trouble making the people around him understand what he wants. He may need funding, and he needs to make investors know what is in it for them. Something like 85% of entrepreneurs needing funding, aren’t investment ready. They haven’t put a story together which is compelling to a investor.

Learning

Each side can learn from the other: 

Entrepreneurs can certainly learn from the corporate world. If the product management process is followed, good ideas are likely to get the funding more easily, and ultimately likely to become successful products and businesses.

What can Corporations learn from Entrepreneurs? Passion!