Minimum Viability and Maximum Optionality
I've used a quite high "ink factor" recommending a systematic diagnosis tool for innovations: The Innovation Mesh. It was inspired by the great book editor Shawn Coyne.
A diagnosis tool…not more?
It shall enable innovators and innovation marketers to understand better, whether an innovation works and sells. I emphasize on innovations that support quantitative aspects of a real behavior. They are very similar to an genre of literature - the thriller.
It uses a few schemes mapped into a picture…The whole assessment task should not consume too much time and effort.
The big picture is about change
Innovators want to change the underlying systems that are causing major problem...but the usual reaction to change is a wave of shock-denial-depression-acceptance-integration.
Most systems that require computation have a clock, flows, events, transformations, massive information requirements…suggesting a function-oriented decomposition and consequently a bottom-up recomposition…
This external and internal aspects suggest developing and marketing the innovation the evolutionary prototyping fashion.
It has a great business advantage:
Minimum viable innovation and minimum viable audience
A minimum viable product is the product with the highest return at risk…minimum viable audience is the smallest possible audience for this product with a maximum of multiplication power. In short, a product that matters for those who care.
Minimum Viable Audience, has been originally coined by Brian Clark…The liked article (addressing digital media entrepreneurs in particular) shows that it's the innovators' job to find out what their users want and that it has great benefits to choose this explorative, constructive model. It's leading to the right sequence of insight-consensus sales.
But don't forget to look into the numbers:
Option valuation to optimize market risk
The approach gives you a lot of options and there's still uncertainty…what options will most probably provide the highest return at risk? There's great technology to support innovators finding them: Real Options Valuation tools.
I partner with experts, who know how to apply them…in in joint projects, I focus on innovators.
Interestingly enough, most real options projects are conducted in traditional sectors, like commodities…
But it's the innovators, who need to deal with uncertainty, because they usually can't rely on "game rules"...
How I help innovators leverage their businesses
An innovator has told me the story of her innovation. We've walked it through The Innovation Mesh...we know the type, conventions, rules and states, the points of view, desires, requirements, needs, controlling ideas, coverage, methods and technologies, the constructors, builds and solutions...and after a few fixes of the Prototype we know it works and will sell, what it's for, for whom, how actors will experience it…we roughly know the qualitative external and internal values…
With that information it's easier to build the release 1.0 following the principle of a minimum viability. We want feed back from a distinguished audience and again The Innovation Mesh helps defining the minimum viability segment and audience.
Now, we need to outline the licensing and pricing, a development plan and strategic marketing with a tree of options. It's the right time to use a real options valuator for what-if simulations…to understand return at risk probabilities and funding requirements better.
Believe me, it's an exciting task with amazing insight…and because of the instant methodologies and technologies I can position its high/low at the value/cost map.
Get a proof…here's the contact
p.s. I'll support you in any stage of your business development…real option valuation tools, for example can be also applied to define the game rules of a multi-unit business with products and services in different life cycle phases.
Posted by Herbert Exner at Friday, April 03, 2015
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