If you saw my previous post, "With Apologies to Mr. Richter," you know that every technology business experiences the valley of death.  But, no matter what type of business you're trying to start, you need to do a proof of concept before you go all out and launch the business and to do that you need a prototype, which is simply a working model of the business--the product or service being offered.  Why? Because you can't get good feedback from customers if you don't have something they can see, touch, and interact with.  A prototype is easy to understand when you're talking about a product business, but what if you're doing a service business or an Internet business?  Here's where your creativity can shine. Consider this. A service business is simply a process, a set of activities and tasks that your company performs.  One of the first things you can do is lay out that process in a graphic showing the flow of activities and tasks.  Then you can test your service process on a willing customer for free.  With the feedback from that customer (and a testimonial we hope), you can slowly roll out to new customers, always modifying and improving the process with the experience you gather.

For an Internet business, a primitive prototype might be in the form of a storyboard or wireframe (a basic visual design of the user interface) depicting the various pages on the site and how they're connected. Once you have all the pieces in place,  you can move to the next prototype, which might be a simple functional version of your Web site to demonstrate some of the benefits.

Product prototypes can be very expensive to develop so here again you have to use some ingenuity to keep the costs down.  For a machine that we developed, we got the vendors of all the components to send us a free sample of their part.  Why would they do this?  First, because we convinced them that our product represented new market space for them that was worth their time (value proposition).  Then, we learned that it was usually cheaper for them to send us a free sample than to go through their entire sales process involving many people.  So our initial prototype of a fairly complex machine was practically free.

Getting to a working prototype fast means you learn very early the mistakes you're bound to make.  Correcting them before you finalize the design will save you a ton of money. In the next post I'll deal with the second half of the valley of death.
 

A little over a month ago I posted about the importance of knowing who your customer is. I mentioned that it's not enough, however, to know who your customer is, you must provide products and services that your customer values. This is by far the more difficult task -- it's not always clear what exactly your customer will value. While you might believe that what you are providing has hit the mark, your customer might believe otherwise. And if this is the case, then you've got a problem.

To refresh your memory, I've had a long-term job where I provide support to a key employee who works for a client of mine. I meet with the key employee for a couple of hours every week, and we work closely together on a variety of projects. However, I only meet with my actual client once every couple of months. About a month ago I ran into a snag where my actual client reminded me who I needed to please -- and it wasn't the key employee.

As a result, I completely revamped my approach to the project -- thinking I had zeroed in on exactly what my client valued based on the feedback provided to me. Well, today I learned that I still had not hit the mark. So, instead of trying to guess what my client wants, I asked for a face-to-face meeting where I could gain a better understanding of what my client is looking for. Will I leave the meeting with an exact picture of what my client values? I sure hope so.

You can never assume your customer values the products and services you provide. Constantly seek feedback to be sure. You (probably) can't read minds, so you've got to do it the old-fashioned way -- just ask.

One thing we writers are good at is taking others' concepts, repackaging them, giving them a new name, and then proclaiming a new discovery.  Geoffrey Moore essentially did that when he popularized the work of the Department of Agriculture in Iowa in the 1930s on the technology adoption-diffusion cycle in his very successful book called Crossing the Chasm.  Blue Ocean Strategy, another best-selling business book, gave a new name to an old entrepreneurial strategy--looking for unserved needs in the market.  So, not to be left out of this game, I developed what I call the Allen Technology Richter Scale, with all due apologies to Mr. Richter who helped us measure the intensity of earthquakes.

I use this scale to describe technology ventures that go from those that are relatively simple technologically and with respect to time-to-market to those that are highly complex with huge regulatory requirements and lengthy product development cycles.

The time from idea to market is called the "valley of death," and its length varies with the type of technology venture.  So, if you're starting a Web 2.0 business, you can move quickly (and you have to) without many restrictions on what you do.  If, on the other hand, you're starting a business in the energy or biotech arena, it's a whole different story.  Count on it taking about 7 years or more.  The valley of death really happens in two parts: one part is the challenges associated with going from an idea on paper to a working prototype; the other is going from a prototype to an actual business.  None of it is easy.  I'm going to deal with some of the things to think about in the valley of death in the next couple blog posts.  Stay tuned.