Entrepreneurship is learning as much as possible as quickly as possible. Bart discovered this at a young age. Curious about his childhood story? Read more.
At Innovation Booster, our work is all about helping large organizations realize their business value through discovering where it really lies and how to achieve it. We mainly do this by simulating value transactions to arm us with proven knowledge, before going on to design the product or service which actually delivers this value. The journey to success sees us deploy all sorts of modern, somewhat overhyped, methodologies like lean startup, design thinking, growth hacking and agile scrum.
So why use these, if we don’t fully believe in their worth? In a pioneering business such as ours, we have to tread a path between our own groundbreaking methods and the established terminology our client market recognizes and thinks must be the answer. We do, in fact, recognize a lot of value in these in-favor methods. So we do use them, but applied with an original mindset which stems from the actual personal experiences which lie at the heart of our unique business development process.
How I discovered business value
My first business venture, apart from washing my neighbors’ cars, was something I undertook with my friend Erik when I was about 12 years old. Both of us had been obsessed with cars from an early age and, on hot summer Sundays, we spent a lot of time watching the traffic tail-backs on the road which ran between the highway and the beach. This situation frequently developed because the beachside car park was usually full. As a result, people were stuck in their cars for hours and hours waiting for spaces to become available.
Enter our first idea: those people must be thirsty! We could probably sell them cans of coke from the fridge which my dad re-stocked every Saturday during the weekly shop. Erik and I would load up our backpacks, put on some skates and go window to window selling the cans for 1 guilder (the Netherlands’ currency before introduction of the euro) each. All the time perfecting our sales pitch and making sure people had a laugh to increase sales conversion as much as possible.
In the mind of a 12 year old boy, this seemed like the perfect business, as the fridge provides an unlimited supply of coke cans, always refilled ‘by magic’ every week. I soon found out, however, that my idea had some drawbacks. My dad taught me a business lesson by telling me I had to give him 25 cents per can, because that was the amount he paid for each one. Secondly, carrying the weight of those cans in the hot sun was very hard work.
Climbing the learning curve
And as time went on, I realized my refreshment service wasn’t getting rid of the misery all those people were still experiencing in the recurring traffic jam, or doing that much for my finances. My father suggested that the pain point of the delay itself was a lot more worth solving than the side-effect of being thirsty. And what’s more this could be solved because, unknown to all these frustrated drivers, there was a parallel just 100 meters away which would get them to the beach, and somewhere to park, a lot faster. Armed with this insight and information, Erik and I figured we could probably make a lot more money as personal guides, redirecting these tourists to the alternative route so they could reach their destination quicker. Remember, these were the days before cars were equipped with satellite navigation!
So instead of knocking on car windows offering cans of coke for sale, we started asking people if they would pay us to guide them to a clear route to the beach. As it turned out, a lot of them were willing to do so. But there were still some issues I hadn’t thought about, such as:
- What is route guidance worth?
- How to overcome natural hesitation about handing over money to street sellers
Finding the sweet spot
Even after testing a range of different prices in the opening pitch, the right amount to charge remained unclear. But we did discover that people actually paid the most at the point when they could see we had, indeed, directed them to a clear route to the beach. Eventually, we decided on a strategy of telling our customers they could give us what they thought was worth once we’d brought them to the route. But we did still make it clear that we did expect some kind of payment from the start. This turned out to be the winning formula, with some people paying as much as 25 guilders for 5 minutes of work. Our income for two hours on a Sunday would beat selling coke cans for a week, if not a month!
Relevance to today’s methodologies
This experience can be used to provide a perfect illustration of how today’s favored methodologies play out.
-Design thinking: we considered our customers’ journeys to identify their experiences and touchpoints and find the sweet spot moment for making the transaction.
-Lean startup: we undertook a/b testing to discover where the most money could be made and were able to predict revenue, even though it was an innovative service.
At Innovation Booster, we’ve brought an additional layer of sophistication to these standard methodologies by creating the Innovation Booster Transaction Funnel. This tool for simulating (online and offline) transactions and building business formulas incorporates
- Measuring time conversion; the amount of time people invest in listening to a pitch or proposition indicates the size of the pain
- Measuring transactions at specific moments in the journey and split-testing pricing to establish the maximum value return on the pain
- Experiencing measurements
The moral of this story
At Innovation Booster, we are just as likely as anyone else to get sucked in to using terminology and we love deploying new tools and gimmicks in our work through our methodology. But all the tools in the world won’t spell out the fundamentals that underpin a business proposition:
A bad pitch or an attempt to solve a non-existent pain-point will just make people annoyed. Whereas a good proposition focused directly on the pain-point will get people throwing money at you.
– Bart van der Werf, Founder Innovation Booster
Do you also have an interesting story about your childhood? Or do you just want to discuss the position of innovation and entrepreneurship within your business? Click here to have chat (or coffee) with Bart.