Horse, rider, trail: A venture capital approach to incubating disruptive innovations in larger companies

“When it comes to incubating disruptive innovations inside an established enterprise, I strongly advocate you take a venture capitalist approach. I want you to make any future funding of your projects contingent upon them having achieved their current milestone by the date specified. What do you do when the team doesn’t?

You sidle up to the would-be entrepreneur and say, “Well, Pardner, I’ll tell you what. Mebbe you can get some more funding, depending, but only if you swap out some part of your current plan. So, what’s it gonna be—the horse, the rider, or the trail?”

The horse, in this case, is the product. A lot of times when you create a Minimum Viable Product, the customer turns it down—it is just not something they want.

Other times, however, it’s not the horse that is the problem. It’s the rider. Not everyone is a good entrepreneurial leader, regardless of how good their resume and their references. Indeed, that skill set is particularly scarce inside established enterprises.

Finally, sometimes you have a great rider and the team has built a pretty darn good product, but dang it, the more you engage with your target customers, the more you realize you are on the wrong trail. Here the team has to regroup, focus on a new use case, build out a new whole product, and identify a new set of target customers.”