The Red Ocean Disruption (ROD) Cycle: A Continuous Disruption Roadmap for Product Innovators, Improvers, Business Planners, and Lean Startups
by Rod King, Red Ocean Disruptor at ROD University at /for Bus. Model Gamification; Top 1% Slideshare Contributor - Over 150,000 views (2013) on Oct 23, 2013
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Over 90% of startups go bankrupt within a year. The main reason is that targeted customers buy few or no “visionary” products and services that are originally described in traditional business ...
Over 90% of startups go bankrupt within a year. The main reason is that targeted customers buy few or no “visionary” products and services that are originally described in traditional business plans. Many entrepreneurs and startups are conscientiously using Waterfall Planning and Execution to build products and services that customers do not value. So, how are we solving the problem of cost-effectively translating bold visions and dreams into reality? After all, the startup community and society at large are wasting vast amounts of money, time, and human resources in failures that could have been earlier averted.
Given the high risk of failure in using a traditional business plan, startups are understandably calling for “Death of the Business Plan.” So, if a traditional business plan combined with Waterfall (Sequential) Planning and Execution is increasingly irrelevant to startups, what alternative approaches and tools are startups using to reduce the risk of translating bold visions and dreams into reality?
The emerging dominant approaches for translating vision into reality hail from Silicon Valley, California. The approaches are Steve Blank’s Customer Development Stack and Eric Ries’s Lean Startup Method. Both approaches are strongly related as Eric Ries’s approach was inspired by Steve Blank’s approach of Customer Development. Using the paradigm of a Business Model Story – the components of which are Customer, Business, and Learning Stories – Steve Blank’s approach focuses on the Customer Story (“Define Problem”) while Eric Ries’s approach focuses on the Business Story (“Build Solution”). Both approaches emphasize the Learning Story as a key outcome of each cycle, iteration, or experiment in a startup project.
The similarity in Blank and Ries’s approaches also arises from the fact that they are codifying and applying the Scientific Problem-Solving Process to systematically translate business visions and dreams into profitable products, services, and business models. Nevertheless, Blank and Ries’s principles and tools are relatively complex to understand and difficult to apply. Startups as well as established businesses are struggling to rapidly apply the methodology of the Customer Development Stack and Lean Startup. Consequently, many startup projects are still at risk of failure.
Unlike in the Continuous Improvement methodology of Six Sigma, neither the Customer Development Stack nor the Lean Startup Method has a simple, effective acronym for translating a project’s vision or objective into reality. Blank’s mantra of “Get Out Of the Building” is an inspirational war cry but is not actionable. Ries’s “Build-Measure-Learn” feedback loop is more actionable but does not adequately describe the Scientific Problem-Solving Process.
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