Invest Ottawa sees thousands of entrepreneurs every year, all with an endless amount of ideas. Yet not all ideas are made equal and most will never be commercialized. So how can an entrepreneur increase the chances of turning a business idea into a business reality?
Invest Ottawa advisor, Ron Gagnier, has been helping get projects off the ground for decades, turning innovation into commercialization. In this three-part series, Ron walks through the dos and don’ts of product development and chats with an Invest Ottawa supported company which were able to avoid many missteps. This is part one of a three-part series.
Working as a business advisor and software designer for over 20 years, I’ve been a part of many, many software projects. Some have been great successes, but I’ve also seen my share of failures. What experience has provided is perspective on the industry and what I have observed is this: failing projects often result from three common pitfalls.
- Absence of research
- Absence of design
- Absence of feedback
Each pitfall on their own can be fatal but combined they typically result in systemic project failures.
At Invest Ottawa I’ve had the pleasure of working with FreightPath, a company that exemplifies how to build great software. While their current success stems from challenges they faced earlier on, FreightPath will be my case study of how to avoid these pitfalls. By building rigour into their processes, FreightPath continues to exceed expectations and is positioning themselves to be a major player in the freight logistics industry.
What are the common pitfalls?
Absence of research.
I often see companies dive headlong into a project without a detailed understanding of the industry, market or stakeholders. It’s easy to do, and I’ve been guilty of it myself, but there is danger in valuing enthusiasm over understanding. Believing in yourself and your ideas without clear supporting evidence from the market is delusional. I am not discounting the importance confidence plays in being successful, but it is delusional to believe you know more than the market you are servicing. Your own enthusiasm and delusion can prevent you from achieving product-market fit which defines why a customer is likely to use your product or service. According to the highly successful venture capital firm, Andreessen & Horowitz, product market fit is the single biggest factor dictating a startups success and I would extend that to any company’s long-term success.
So, why do companies fall prey to this pitfall? I’ve heard all the common excuses:
- Research will take too long – we have to be first to market
- Research will distract us from meeting our engineering goals
- Customers don’t know what they want so it is pointless to ask them
For me, each of these excuses boils down to a misconception about what research is and what value research can deliver. I don’t want to turn this into a long treatise on how to do effective research, so I will summarize it this way.
Research consists of understanding your market by:
- Reading everything you can about users and competitors
- Locating potential customers and engaging them to understand what’s important to them
- Analyzing how the market is being served today and looking for opportunities to serve them better
When done well, research will:
- Identify goals customers are trying to achieve
- Identify common actions that need to be performed to achieve goals
- Identify repetitive patterns that could be automated
- Identify complex patterns that could be simplified
- Identify skills people need to achieve their goals
- Identify decision points and the data needed to support a decision
The skills required for research are openness, willingness to listen and observe and some analysis skills. Rudimentary research skills can be learned by any software team.
Check back with me for part 2 and 3 of this series to hear wisdom from Gwen Malbec the CEO of FreightPath regarding how they have avoided the common pitfalls identified here.