Indeed is investing more and more in discovering and building new products. As the product team discussed and evaluated our successes and failures – I found it difficult to communicate without some common terminology around the different types of innovation projects underway.
So here are a couple of terms I proposed that were intended to help the discussion. In all cases I’m talking about trying to find new successful products – new sources of revenue that are pre product-market fit. Initiatives to grow core business are outside of this discussion.
Seeds: Small projects; less than one quarter long; pursuing a solution to an opportunity; developing and piloting an MVP solution; gather some initial benchmark performance data.
Pods: Medium size projects; 3-4 quarters long; pursuing solutions to an opportunity; enough time to gather benchmark KPIs, to run some tests to see how the KPIs improve, and to try a few different approaches to the product.
Big Bets: Large projects; 6+ quarters long; strong commitment to a new business opportunity; try to launch and scale it quickly.
Projects of any size that have found product-market fit are no longer seeds, pods or big bets. They’re new products and they need to be scaled as large and as efficiently as possible. Also, these are not strictly stages. These are different approaches to product discovery and development.
|# of Engineers
||$50k – $500k / qtr
||$250k – $2M / qtr
||Pilot a specific solution to a specific problem. Clarify an opportunity.
||Pursue a solution to a specific problem. Some flexibility to pivot as the project proceeds.
||You believe you know the solution to a problem. Go big and launch it.
||Go from zero to one.
||Quarterly goals. A modest level of initial performance constrained by cost. e.g. 10 hires at <$500/hire. Improving significantly each quarter.
||Quarterly goals. Showing growth, and performance improvement, constrained by cost.
||Senior Leadership approval
||Senior Leadership sponsor
||Should be clear
What are they good for?
Seeds are useful because they bring an idea to life. It’s fine to research an idea – like creating a site dedicated to jobseeker events – but the requirement to actually pilot something adds a level of fidelity to it. It’s way easier to engage with something tangible – to both poke holes in the idea, and to see the full potential. Show, don’t tell. The nice thing about seeds is that they don’t need Senior Leadership support. You can – and should – support seed projects that few people would bet on.
Seeds also support the creation of pods and/or big bets. Both pods and big bets are a substantial investment of limited resources (product, engineering, sales). Starting with a seed is a way to get some clarity and hopefully some real data before committing to a pod or big bet.
You should expect to stop after the seed phase and then make a decision about what the next step is. That might mean putting the seed idea on the shelf. It might mean gathering the resources to create a pod. But it’s a mistake to continue at the seed level too long. They need more resources (engineering, marketing) to have much of a chance of real success.
Pods are like a small funded startup with a year of runway. They have a problem identified, they are building and launching a product. Their goal is to find product-market fit, or to show a clear trajectory on the KPIs towards product market fit – before the $ runs out. Lean startup approaches to product discovery and validation apply here.
For pods to be successful they require a certain amount of investment. They require 2-3 engineers. They require product marketing support – with a budget. They might require some integration with other products. And they require some Senior Leadership support to help secure resources.
If you think you’re onto something, if you’re committed to it – then go big. Pros: bigger product faster. Cons: what if you don’t have product-market fit? Then you’re burning lots of resources as you try to find it.
Big bets require an engaged executive sponsor because of the significant investment involved.
Ok, I understand the proposed terminology, so what?
Companies should be pursuing a mix of these concurrently. They all have a role to play. You should make it easy for entrepreneurs in the org to pursue a seed project they’re excited about. This could be an innovation rotation, a labs/skunkworks project, or the permission to launch a nights-and-weekends project.
I would propose that pods are one of the most efficient ways to find product-market fit; enough resources to actually try something out and learn, but with limited cost to the company.
Finally – You shouldn’t be afraid to place a limited number big bets on the most promising opportunities in your space. Bigger risks but bigger rewards.