One of the most interesting aspects of being an entrepreneurship professor is listening to company founders tell the story of how they got the idea for a venture. Inspiration can come from a walk in the park, a late-night conversation with batchmates, an article in a magazine, a frustrating experience at work or in your personal life, and so on.
Seldom does the kind of formal market research that goes into new product development in an established company seem to enter into the picture. Entrepreneurs, it seems, must start with a spark of inspiration that is usually linked to personal passion.
 |
| Philip Anderson |
For this reason, a number of business schools and other educational institutions offer courses in creativity. Unfortunately, as I have described in a previous column, the end result is that students often troop in my office in despair because “the big idea” has not yet occurred to them. Somehow, they have been brainwashed into believing that if they don’t personally have a “Eureka!” moment three weeks into a course, they are not only failing but are probably far more dull than their classmates. [“Eureka” in Greek means “I have found it,” and is supposedly what Archimedes said in his bath when the idea occurred to him of using the volume displaced by an object to measure whether it was made of pure gold.]
At INSEAD, the “business school for the world” where I teach, a young professor has brought a fresh and systematic approach to the problem of how would-be entrepreneurs can generate compelling venture concepts. Professor Karan Girotra grew up in south Delhi, earned a bachelor’s degree at IIT-Delhi, then completed his PhD at Wharton, before joining INSEAD last year. On both our campuses (in Singapore and France), he is pioneering this year his own version of an established course, “Strategies for Developing Products and Services.” Girotra calls his approach to the course an “Innovation Tournament,” and in a short time, he has assembled a rabid following among the MBAs by helping them use nature’s technique for creating novelty—evolution.
Why develop a research-based course on developing entrepreneurial ideas? Says Girotra, “As an entrepreneur all my life, I thought that coming up with business ideas was more of an art, so I’d sit somewhere waiting for lightning to strike. At times it worked and a great idea would come to me, but if you want to make entrepreneurship a career, you can’t wait to get lucky. The risk-averse operations management professor in me is not comfortable waiting for a great idea.”
While a doctoral student, Girotra worked with pharmaceutical companies and was exposed to a different approach. He explains, “They don’t wait for magic to happen in the new drug development process. They pick up any new synthesized chemical and test it for certain properties. They were coming up with novel compounds and therapies by searching very broadly, not through a creative spark. I wondered if that would apply to other opportunities for potential businesses.” Girotra saw the same process at work when watching how graphic designers created a company logo. “They’d come up with 20 concepts, fine-tune them down to five, iterating and refining as they go,” he elaborates.
As a teaching assistant for a new product development course at Wharton, Girotra helped a lot of MBAs incubate their ideas, and he ended up taking time off to be an entrepreneur. “Terrapass came out of a class project, and I joined a couple of MBAs to run it for a while,” he relates. “We bought carbon offsets and allowed individuals to purchase them if they wanted to be carbon-neutral. I worked in that venture for six months, then returned to my studies while other people ran the business, which has received subsequent rounds of investment.”
Building on the ideas to which he was exposed during his doctoral studies, Girotra designed an elective course at INSEAD meant to generate venture concepts like Terrapass that students could actually grow and run if they chose. Evolving ideas systematically is the theme of his course. Girotra says, “The main structure is a tournament. The idea is to generate variance, select, and then refine concepts between different rounds of selection.”
The philosophy of the course is that cultivating and leaping on a “Eureka” experience is a bad approach. “When ideas come, you don’t know which are great and which are bad,” Girotra asserts. “You should never go to one idea right away. You need to let a lot of ideas come to you, then screen them sequentially in a spread out way. Do selection in multiple steps.”
Girotra likens this approach to a reality television show. “All these shows, like Indian Idol, have the same approach,” he notes. “First, they cast a wide net. Then, they put contestants through a series of selection hurdles, eliminating a few every week.”
Just as a reality show screens thousands of contestants, Girotra forces his students to start with hundreds of ideas. “I make people sit with an empty piece of paper for a dedicated time each day, forcing themselves to come up with ideas,” he says. “It takes diligent application of effort and a clear notion of what ‘an idea’ is. You want a concise description of both an un-met need and a solution, captured in 25-50 words. It’s not a full model of how a business will make money—an idea combines a market need with a solution.”
Once each student has generated several hundred ideas, Girotra invokes the “wisdom of crowds” to help winnow them. Using a web-based system called “The Darwinator,” students upload a brief description of each concept. They are then required to rate one another’s ideas. [The web site is freely available at www.darwinator.com for DARE readers who are interested in giving it a try.]
Says Girotra, “You need 18-20 data points to get a feel for how good an idea is. In a class of 50 people, I get everyone to rate 200-250 ideas of their peers, which takes about 2.5-3 hours of work. However, many people go far beyond this and rate hundreds more ideas, because it is just engaging.”
Just as the voting on a reality TV show doesn’t always eliminate the weakest performers, The Darwinator doesn’t always eliminate the worst ideas. “Early on, you need a quick and dirty method that is efficient, though maybe not as accurate as possible,” Girotra explains. Later in the course when we get down to a few ideas, we use an innovation workshop that is more accurate and less efficient.”
The Darwinator’s effectiveness also depends on how well-suited the raters are to the idea. Girotra comments, “MBA students give good feedback for products and services that are designed for 25-25 year olds who are cosmopolitan and upper-middle class. A large crowd can be fairly efficient in evaluating more generic ideas. However, if you were looking at the latest nanotechnology application, for example, you’d need a panel of experts.”
Once students have identified the top half of their ideas via feedback from The Darwinator, Girotra has them evaluate each idea via a series of stages. First, having matched a need with a solution, he forces students to come up with five alternative solutions for each needs. “This is the equivalent of mutation,” he says. Then, he has students evaluate the economics of delivering each alternative. How much investment is required to achieve what cost of delivery at what possible scales? For each idea that survived the Darwinator, the student chooses which of
the five solutions seems most economically appealing, then winnows the set down based on how they compare in attractiveness.
Next, Girotra has the students reduce market uncertainty by building a prototype of the user’s experience with the most promising products or services. “I want my students to get away from spreadsheet models and do something tangible,” he clarifies. “I ask them to take a prototype to five people for feedback, get their hands dirty, look for what people like and what they would be willing to pay.”
After another round of selection, the most promising survivors are analyzed for ease of execution. “You list the tasks required, the cost of each task, and the uncertainty reduction you will get from each,” Girotra elaborates. “Then, you pick the alternative that lets you eliminate the key uncertainty as quickly and as cheaply as possible.”
By putting his students through a careful, step-by-step process of searching wide, selecting carefully, and taking advantage of the wisdom of crowds, Girotra helps students transcend doubts about whether they are creative enough to be entrepreneurs. Why do they come up with better concepts? “The best five out of 500 ideas will be better than the best five out of 100 ideas,” Girotra explains. Perhaps it is not surprising that this is the approach adopted by an IIT graduate, a survivor of the relentless numbers game that sends the best of the best of the best to India’s most elite institutions.
Experience suggests that successful ventures evolve from the idea originally pioneered in a business plan. The concept with which an entrepreneur starts seldom survives the test of the marketplace—some descendant of the original idea, often so changed as to be unrecognizable, is the one that finds a customer base. As your initial idea will evolve anyway, why not use the power of variation, selection, and retention of the survivors to evaluate ideas systematically and find a useful starting point for evolution to continue? That’s the key thought driving Karan Girotra’s innovation tournament approach.
The author is INSEAD Alumni Fund Professor of Entrepreneurship, Director, Rudolf and Valeria Maag International Center for Entrepreneurship and Director, 3i Venturelab
Subscribe to this comment's feed
written by Christian Louboutin, December 06, 2010
written by belstaff, November 23, 2010
written by mbt shoes, August 26, 2010
written by mbt shoes, August 21, 2010
written by animal rubber bands, June 29, 2010
Animal Rubber Bands
led flashing bracelets,
make any ordinary night extraordinary.
cheap bakugan toys, mosquito repellent wristband
finger skate, power balance,
ddung, barbie girls
organ donor dolls,
at www.toptoys2trade.com
| < Prev | Next > |
|---|
