Why Do Start Ups Do It better?

I have an obsession with Kickstarter and Indiegogo.  It’s not just about getting some pretty cool products ahead of the market (I’m particularly excited about my soon-to-be-arriving autonomous suitcase, which follows you around like a robot…just imagine the extra efficiency of replying to emails whilst marching through the airport. Terribly sad but I can’t wait!).  But it is also about following their stories: the hurdles they need to get across, the road blocks, how they overcome these challenges and what drives them to success.

We’ve worked with a few start ups to help build their brand ahead of launch or to help them pitch for investment – everything from a social media app that failed to live up to the dream; through to a child booster seat, Mifold, which has been rocketing since launch.  We’ve also studied how these businesses grow and more importantly how they innovate to see what we can learn and how we can help our CPG clients innovate better.

It is always easy to look to the greener grass on the other side, but the pendulum has been swinging towards small and medium sized companies, who are stealing the share of the established players and changing the rules of engagement with consumers.  According to a survey by BCG and IRI, the largest companies have lost 1.4 market share points (worth more than $10bn) to small and medium sized companies since 2009, who are stealing market share and impacting on larger companies sales & volumes.  We are tending to see some share steals between the big brands largely based on A&P, but the real growth is from these smaller players, who are doing things differently.  Johnson’s Baby being bitten by Honest Company’s baby products; Unilever buying Dollar Shave company last year; hundreds of craft beer brands giving the big brands a run for their money.

So what do these start ups do so well?

The word that we keep hearing over and over again is agility: their ability to move quickly, to react to changes in their environment, to make decisions and act on them.  Start ups often produce the best innovation because they are unshackled. Even if you aim to be proactive, large companies end up being reactive, as these smaller players get there first.

They’re tuned into what consumers want, usually because they are set up by a founder who him or herself, experienced a problem and wanted to solve it.  We use the language around Jobs to be Done: the best innovation genuinely solves a problem or a consumer tension.

But a lot of innovation in organisations has lost this focus, instead focusing on R&D, technology, gadgets and gizmos that have functionality that’s better than competitors.  All of that is great but it might not actually solve a problem.  So, when you get to a concept test, a lot of this fails as it doesn’t engage the consumer reading it on the other side of the screen.

The traditional innovation process is also linear: you create some ideas, build concepts, qual test them, quant test them; the number of ideas reducing exponentially at each step, until you might have one that succeeds at the end of your Stage Gate process.  Or not.  And anything that fails any of those steps is disregarded and deemed a failure.

We believe in a positive spiral – full of building, feedback, iteration and progression. Test, Learn, Evolve.  Our Helix process is about moving upward and forward – always learning.  This analogy is also never ending, as is innovation. It is never complete, there is always more to do; there is always room for improvement.

And that is what drives these start ups to success: the desire to solve a genuine problem, and the agility that enables them to move quickly, unshackled, testing, learning & evolving; to occasionally pivot and to have the accountability to make that decision.

If you’d like to innovate in a more agile way, please get in touch and we’d love to talk to you about how Helix can help.

 

Bianca Cawthorne, Founding Director.