Home > Business Idea, Future Business Ideas, Google's Way, Time-To-Market > Operators should act like VCs when it comes to innovation

Operators should act like VCs when it comes to innovation

Operators have an addiction to use RFQ processes. The problems with those processes are:

  • They take a long time.
  • They are not useful when technology is not well understood.
  • They are only applicable to solutions whereby there are multiple providers.

Basically an RFQ will always bring you yesterday’s technology. After integrating this technology, when you launch you will be working with the day-before-yesterday’s technology. Google and others are working on tomorrow’s technology. Launching an innovative service via an RFQ process is as such almost impossible.

If you want to launch innovative, and new revenue generating, services that bring you back into the game, then the first thing that you need to accept is that RFQ’s are not your answer. So what is the alternative?

Innovation is about trying and accepting failure as a natural step towards success. You need to do everything to quickly detect failure so you do not spend too much effort on such solutions. How can you do this?

Forget asking marketing experts or even doing market studies, etc. Do you know any expert that would have predicted the success of Facebook?

The answer is to form small teams, called tiger teams. 1 functional/sales expert and 5 technical experts is a nice size. These teams should be isolated from the rest of the organization. Ideally the teams are mixed with members from partners or suppliers that know about a specific domain.

Additionally the tiger teams should have access to some innovation framework that helps them use some of the internal assets without having to do real deep integrations.

Finally the tiger teams should have access to part of your website,e.g. labs.operatorname.com, where they can launch their creations and get immediate feedback from beta users.

Operators should invest in these teams as would a VC. You get a little bit of money in the first round. Just enough to get me a prototype in 1 to 3 months. Afterwards we look for 1 to 2 months to see if there are beta users that like the solution. If not, we kill it.

If the solution is interesting for end-users or businesses then the next round of spending should come. However ideally operators start working together with other operators that are not competing and jointly invest. This way, your tiger team might not have given any result this month but the tiger team of your neighbouring operator might. By jointly investing, the cost to get the first commercial version is a lot lower.

The tiger team should not switch off the beta and start working on version 1.0. Instead it should use a social CRM to get feedback from early adopters. The roadmap should be steered by the community of early adopters. The service should with their guidance go from alpha to 1.0 in a maximum of 6 months.

As soon as the service is live, then it should be extended to all the other operators that also invested in it. Via Cloud Computing, it would be possible that this service is only installed in one place and offered to multiple operators with a minimum integration. Partners could even take over all costs of operations in exchange of a revenue share.

Once version 1.0 is reached, it is time to focus on offering open APIs and plugins so the community can start extending the solution and not necessarly the operators.

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