We explore the biases and perception traps that give rise to bad startup ideas.
Have you ever heard of a certain startup idea called Dog PC? It’s a PC for your dog. Or perhaps you’ve heard of a website that lets you blackmail your friend until they pay you? Yes, it’s called BlackMailed. To take things even further, you likely have never heard of iSmell, a PC-connected device that emits over 100 different scents depending on the website or media that the user is watching.
On a more positive note, you likely know of the iPod, which revolutionized the music industry, or Netflix, the streaming service that made cable TV irrelevant and changed the landscape of Hollywood.
What makes a good idea has been talked about many times over; from targeting a narrow niche and knowing your customers’ jobs-to-be-done, to leveraging design thinking frameworks and adopting lean startup mindset. Yet to come up with great, industry-shifting ideas is merely one side of the coin, the other side involves avoiding bad, company-breaking ideas. History has shown that ill-conceived “innovations” could be the downfall of an otherwise lucrative company (see Twitter’s new $8 verification).
As Lean startup and design thinking provided a blueprint for how good ideas happen, this article attempts to paint a picture of how bad ideas are conceived. Similar to how good ideas are many times formed from a jump outside the box, bad ideas arise from the trap of an innovators’ own expertise and experience, skewing their perception of the world and of the idea away from that of the customer. Certain ideation practices and biases give rise to these traps.
1. The Customer Insight Illusion
Many startup teams begin their journey with doing a deep market dive from scratch. Designing demographic surveys and crafting customer personas and conducting interviews are fun and seemingly insightful. But they also trap innovators within the pre-established boundaries of customers’ self-perception and what they think are possible. Customer discovery processes based only on surveys and focus groups analysis ground the innovators on articulated needs. Needless to say, it is the unexpressed, unrealized desire that most often gives rise to disruptive innovations.
Consider the case of a product called Coca-Cola C2. You likely have never heard of the name since, evidently, the product failed and was pulled from the market. Coca-Cola C2 was launched in 2004, targeting a clearly defined market of 20 to 40 years old health-conscious men, who liked the taste of Coke but was concerned about its high calories and carbs. C2 contained all the flavors of original Coke, but with half the calories, sugars and carbs. Market research indicated that capitalizing on the low-carb trend at the time was the right move, yet C2 was barely recognized. It turns out the issue was that no-one cared about a mid-ranged product, despite market research indicating otherwise. People wanted full flavors and no sugars. When Coca-Cola Zero came into the scene with exactly that selling point, it completely displaced the C2 in retail stores.
2. The Brainstorm Illusion
A core part of the ideating method is the booming popularity of brainstorming sessions where teams sit down together, energized and excited, with ideas flying across the room in rapid fire. In other words, ideation is identified with group work. Yet a Yale study found that individual ideation sessions generate twice as many ideas as in groups. Group brainstorming sessions are also plagued by production blocking (when people don’t get a chance to interject their idea), evaluation apprehension (a fear of being judged negatively), lack of psychological safety (entrenched power structures) and social loafing (hiding in the group and not contributing a fair share). Further than validating the wrong ideas, group ideating sessions also risk drowning out good ideas.
A case that has often been mentioned is Pixar Animations before and after Steve Jobs got involved in the day-to-day management. At the time, Pixar was struggling to come up with blockbusters, despite its staff being some of the most talented in the world. As it turns out, brainstorm meetings were plagued by constant criticisms shooting down creative ideas. Jobs implemented a policy called plussing, wherein criticisms can only be offered accompanied by a potential solution. The involvement of Steve Jobs in a struggling Pixar gave us the first Toy Story.
3. The Productivity Illusion
It is generally believed that creativity prospers under fast-paced environments, that decisions made on the fly carry the most wisdom. However, although ideas stemming from a spring of genius exist, more often than not, instinctive actions are generally the epitome of uncontained biases and overconfidence. Mantras like “move fast and break things” or “just do it” might be effective to spur actions, but it risks also pushing premature closure and oversimplified solutions of complex problems. The most successful innovations come from a conscious, purposeful search for opportunities while keeping an open mind for solutions that may further arise.
In conclusion, stay tuned to see how NOT to come up with bad ideas.