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Prototype and Pilot

In the world of television, networks will launch a new series only after most of the big risks are minimized. This is done by creating a prototype episode—the pilot—shown to test audiences. After the pilot test, the show is either killed, green-lighted, or rewritten and recast.

New products and ventures need to be put through an even more rigorous set of pre-market testing. Companies and entrepreneurs rarely lack ideas to create new growth businesses. But an overwhelming amount of evidence suggests that companies entering new markets tend to start with flawed assumptions.

Although no one willingly pours money in a fatally flawed project, companies time and again make this mistake when they scale up investment or launch a product too soon. Our approach, which we call "emergent strategy," enables you to pivot away from the path of failure onto the path of eventual success.

Finding the deal-killer risks

The key is figuring out quickly how and why the initial go-to-market strategy is flawed. To launch something new with the lowest amount of risk and the best chance for success, we follow an iterative, or emergent, approach that lets the right strategy bubble up from the market. The objective is to uncover as soon as possible any "deal-killer" risks, such as lack of consumer demand.

Our work with Turner Broadcasting shows how it can be done at low cost. The network wasn't launching a new show but rather a new advertising methodology called "TV in Context." Turner wasn't sure whether its new idea for matching ads with similarly-themed scenes in TV shows would work in practice.

Our team tagged contextual opportunities in existing syndicated shows, such as Law & Order and Seinfeld. We tested whether the new method increased ad viewership, recall and other metrics. After a year of testing, learning and improvements, the results were impressive enough for Turner to give the venture a green light. Research showed that viewers were twice as likely to purchase a contextually advertised product.

Only then did Turner go wide with the new service, integrating it as part of 100 different series and movies. The idea caught on. Initial advertiser sign ups included Applebee's, Best Buy, Chili's, DirecTV, Hallmark, Kellogg and General Motors.

Test early, test quickly, test cheaply

Our work with a number of operating companies suggests a four step approach to prototyping and piloting, based on the principle of "invest a little to learn a lot":

Step 1: Map assumptions and risks – Before you scale up investment, take a careful inventory of the key unknowns and risks.

Step 2: Rank the risks – Recognize that all risks are not created equal. Look for the "deal killers" first. If you suspect that customer demand will be an issue, then that should be tackled first.

Step 3: Create a comprehensive testing plan – Link assumptions to specific tests and spell out the required metrics and resources needed to carry out smart experiments.

Step 4: Absorb and re-direct – Make use of the learnings from these knowledge-building exercises. Recognize where your initial approach was wrong and re-vector toward a successful strategy.

What we offer

emergent strategyEmergent Strategy

Using a test-and-learn approach, we design, execute, manage, and measure market-facing experiments. Recognizing that every new venture includes a strategy that is partly wrong and partly right, we quickly uncover the flawed elements before you commit to an expensive scaling of the idea. This gives you the tools for re-vectoring toward success.

risk-ladderBuilding a Risk Ladder

By mapping assumptions in a comprehensive way, we help new ventures prioritize which risks that they need to understand and overcome first, beginning with finding the "deal killer" risks. Our assessment uncovers and hedge risks in order of importance and affordability. This enables you to quickly kill the project, redirect it, or accelerate your approach to market.

Related Insights

Books from Innosight:

The Little Black Book of Innovation

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Innosight in Harvard Business Review:

Beating the Odds When You Launch a New Venture

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