Validate before going all in

This is a story I keep with me from my early business and technology career. Our experiences shape our thinking. Our biggest regrets form some of foundation of our personal principles. ??

As much as we would like, there's an element of unknown in new strategies and new products. It is sometimes said there's two kinds of decisions: opinion based decisions and data driven decisions. Data driven decisions are the way to go with product version 2.1 and when the stable market exists. For product version 1 and creative new products data is often scarce and sometimes not directly attainable. My memory is with the former type of decision when my company wanted to create a whole new business model.?

Here's how I remember it.??

?Capping out the market and the big idea?

I used to work in a company that dominated a novel product category. We had a value added service that was sold via an unconventional channel. Everybody else was doing retail – we sold subscriptions as part of the teleoperator monthly package. The product was exactly as good as the one in the retail, but we had tremendous staying power with the stickiness of being in the monthly operator package. Business was good and profitable.?

There was one problem, we were tapping out growth via that product and our channel. Virtually all teleoperators in our geographic reach had our product available for consumers. We wanted to find the next big thing to continue growing.??

The new big idea was born. Instead of a single product, we would have a portfolio of products. Not one, not two, but many products for our customers. All via the good established channel and the scalable business model. Instead of a single product doing a single thing, we would become the marketplace of all the products a customer might need.??

That was the vision, and we started work.??

Complexity strikes back?

We had formed initial teams to work on the new idea – the next generation platform. A year had passed and we had hashed out initial user experience and few key technical mechanics of achieving the core of the vision. At the same time, we realised the vision required something like an open heart surgery on the whole technology stack of the currently winning product.??

Think of 2 years of no new versions nor upgrades to our company flagship product. After 2 years we were thinking to come out the other end of the tunnel with the new product architecture and the multi-product platform.?

Does it make sense??

I remember sitting one late afternoon in a meeting room with the head of R&D portfolio management. It was late afternoon and we had stayed back after a meeting around the project. We were both quite up to date on the amount of work ahead of us. We knew it was a lot to chew and carried significant technical complexity.??

I remember my colleague saying:?

"I wonder if we are doing the right thing"?

That open-ended thought had me stop. But I didn't respond with anything. I heard what was said, but I didn't know if I should explore more. I let the moment go past.?

We went ahead anyway. We went all in for that initiative. We gathered all people across the R&D. We put all other goals on hold until this big thing would be done.??

We ended up being in the tunnel for 3 years. We didn't present the customer with any significant new value during the years. The technology we created was never applied nor were able to execute the platform + multiple products strategy as envisioned.??

Validating assumptions before going all in?

In hindsight, we were wrong to jump all in. We didn't have the necessary coverage of risks before making the big bet. We were aware of the technical complexities and risks, but we hadn't a good view of the other angles.??

To me this memory of the doubt that was never acted on serves as caution against making big moves based on analysis only. There is an element of great foresight and vision in creating the biggest hits in business. That hunch and visionary foresight needs data and validation before deciding to enter the tunnel and going all in.??

The problem remains of how to quickly move from hunch and opinion to data.??

The answer is: try and find your key underlying assumptions in your upcoming strategy and business model. Don't bet your company to find out. Rather try and make prototypes and studies targeted to investigate the validity of the key assumptions. Then you get the relevant data the soonest.??

I know that's a hard to thought to follow. I feel that is still much better than "Let's build it with big money and they will come". That I time I was part in trying that, and it didn't work.??

This memory reminds me not to do that again.

PS: I want to share the link to our product ownership training -> https://nitor.com/en/training/productownership . While that doesn't directly deal with validating the strategic assumptions behind big ideas, we do share the basic thinking models how to do piecemeal validation and how one should gradually build product knowledge.