#0136: Five proposition evaluation heuristics
Braingasm
I spend quite a bit of time evaluating early-stage propositions in my day job. During innovation, one of the things we need to quickly determine is a sense of whether or not the proposition is worth taking forward for more investigation and analysis.
There are several formal frameworks that people use, from well-trodden innovation rubrics to VCs’ proprietary evaluation models. But consider the situation where the challenge requires high-speed decision-making of the kind you might see when evaluating propositions in a shark tank or hackathon environment. In that case, formal frameworks can be too cumbersome or take too long to work through properly.
Something that I find useful in this context is a set of simple heuristics against which I can check the idea. These fall outside of any specific framework, and they do not necessarily rule out the proposition entirely on their own. But what they do is raise a red flag for me that the proposition might not be quite strong enough to go through for further consideration.
There are quite a few of these kinds of simple knock-out style questions, but the following are 5 of my favourite ones:
The “Feature Not a Product” Problem
This is probably the most common thing that I see when evaluating propositions.
Regardless of the founders’ passion, sometimes the idea they are pursuing is not a full-blown product or service in its own right but rather a feature or subset of something else that already exists.
In this regard, the danger for any new Venture is that incumbents see a new idea and then go on to add it as a feature to their existing product or service, squashing the new Venture in the process. In recent times, this kind of thing has become standard operating procedure with incumbent social media networks to kill competition from upstart startups.
The “Does Anyone Really Care” Problem
This is a simple test to see if the proposition has any potential at all to capture users who really care about the idea.
For example, does the proposition have any early adopters? Has the team been able to get anyone to pay to use the product or service in its earliest incarnations? Is anyone shouting loudly or banging the table about the product and how it will change the world even in its very early, very rough 0.1-alpha state?
If the answer is “no”, then there is a risk that they may never be able to get anyone to care about it.
The “You are Not the Product” Problem
Far too often, founders confuse themselves for their users. Rather than honestly exposing the product or service to real users with rigorous attention to how it fares in real-world conditions, they mistake their preferences and biases for genuine user feedback.
No matter what founders might think, there is no substitute for putting the product or service in front of real users, seeing what they do with it, and then incorporating those learnings into subsequent iterations of the product or service.
This problem can become particularly apparent when working with corporate innovation projects because you will sometimes come across “passion projects” driven by senior executives from the partner.
Unfortunately, executives can sometimes be entirely removed from what their real users are doing and thinking and end up anchoring on their own ideas rather than constantly testing and learning with their actual users.
The “Solution Looking for a Problem” Problem
This is probably the saddest of these heuristics because you can have a situation where a team has spent an enormous amount of time and effort building something, but what they have built is a solution to a problem no-one has.
This is also known as the “build it, and they will come” fallacy.
Engineers are particularly susceptible to this mistake (I know because I have made it myself, and more than once!) which is why it is always good for a team to have a mix of engineering, design, product, and business skills working on the solution to balance out this bias.
If they don’t, the team may end up veering towards “solutioneering” rather than genuine innovation.
The “Multiple Miracle” Problem
This is a bit of a riff on an idea that I have heard from a few different VC sources.
The idea is that if I am evaluating a proposition, then I’m prepared to concede that the team can still succeed even if they have to create one miracle. If a team is going for something ambitious and they don’t require at least one miracle to pay off, then perhaps they are not ambitious enough! However, if I look at a proposition and I see that the team needs miracle after miracle to come true for them to succeed, then I start to wonder if they may be too ambitious.
If the miracles start to pile up across design, business, engineering, and go-to-market, then I start to get worried.
Armed with these five simple tests, you can be in an excellent position to do an early, speedy cull of propositions when you have a large number that you need to evaluate quickly.
Why is this important? Even if you are not evaluating early-stage propositions regularly, these heuristics are still valuable. If you understand what makes something genuinely innovative and are familiar with the kinds of things that often trip up early-stage startups, then you will be much better placed to critically appraise your own innovations.
Regards,
M@
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