Navigating the buzzwords companies throw out like “digital strategies,” “digital solutions,” and “innovation” makes it difficult to understand what they actually do. What’s actually being delivered?
Each one promises a pathway to success. Yet, in all of these possibilities, it’s easy to lose sight of what matters most — building the right thing.
Let’s dive into the four different companies you’ll see in the marketplace, what they can provide for your business, and why hiring a venture studio is the key to helping you build this right thing.
1. Software Companies: Building the Thing Right
Software companies are excellent at what they do. Their developers are coding gurus and their architects can map out complex system designs. They’re engineered to build a product to your exact specifications, with an emphasis on getting every last detail right (especially “under the hood”).
However, when your company is composed largely of engineers, their common go-to recommendation is to build something they have done before on a platform they are most skilled at, while using their coding chops.
They excel at developing solutions given a defined problem. But even if they say that they build apps for growth, it comes with a challenge of delivering on the promise of growth. Some may even have a level of UX competence (making it easy to use). Yet, they ultimately rely on their customers to provide the idea of the “right thing” to build.
However, as the role of builder-practitioner, there are some great companies in this space that build functioning apps given your specifications (and we partner with many of these companies).
But overall, defining the problem itself and understanding if it’s the right problem to solve in the market can often fall outside of their sweet spot.
2. UX Firms: Making a Great Experience
UX firms are brilliant at crafting the perfect user experience. They use design thinking and human-centered design principles (like we use) to build products that people love.
While most great UX firms are practitioners of CX/UX research techniques — you might still be left wondering, “What if it’s the wrong product?” or “What if it’s the right product but it’s the wrong target market?” or “What if there is a flaw at the business model level?”
Creating an incredible experience around the wrong product for the market is essentially still building the wrong thing for the market. Even a flawless user experience can’t mask a misaligned business model or product-market mismatch. If the underlying offering doesn’t serve the market’s needs, unfortunately, no amount of UX design can turn that tide.
And without verifying that the product itself addresses a real market need, time and resources are wasted on optimizing the experience.
3. Digital Strategy/Solution/Innovation and Market Research Companies: The Initial Strategy
Innovation and digital strategy companies offer the best of both worlds — crafting a digital strategy using market research, design thinking, and human-centered design techniques. As strategists and advisors, they can deliver research in the form of delivered documents and presentations.
Don’t get me wrong, these are important pieces of the puzzle. But the biggest question is, will any of this strategy work?
Often, these companies stop short of the most important step and leave the hardest part to you: actually validating the carefully crafted strategy.
When the initial crafted strategy meets customers in a head-on collision, it doesn’t survive — even after all of the interviews, surveys, and focus groups are complete (which are still important steps!). Customers always behave differently than they say they will. And this requires significant experience in market validation, growth hacking, and business model tweaking and pivoting.
Ultimately, many digital strategy, digital solution, and digital innovation companies fall short navigating the market once it meets the initial strategy.
4. Digital Marketing Companies
Digital marketing companies are masters in their craft, skillfully deploying tools from SEO to PPC and social media marketing to drive traffic to your product. They optimize for impressive metrics such as click-through rates and conversion rates, promising improved visibility and reach.
Partnering with one is ideal in helping scale a company after achieving product-market fit. However, when it comes to discovering who the customer is and what aspirin-problem you’re solving for them – the good ones will admittedly say that you’re too early for their digital marketing services.
There is a big difference in getting your first 10-20 customers (early go-to-market) than in scaling to get your next 1,000 (late go-to-market). Initially, it’s all about learning what your customer’s problem is and pivoting your product until you achieve a market-fit. While later, it’s about continuing to get your market-fit product in front of more of the right people.
The bottom-line: If the product or service your leading traffic to doesn’t address a real market need, no amount of expert marketing can convert that into long-term customer engagement or satisfaction.
Enter the Venture Studio: Building the Right Thing
In a world teeming with digital strategies, solutions, and apps, the art of building “the right thing” is often overlooked. That’s where a venture studio comes in.
Venture studios are designed to guide you through this complex process of building the right thing and are with you throughout the entire journey — taking you from the strategy room into the first and subsequent collisions with customers – transforming your innovative ideas into market-fit products.
As a venture studio ourselves, City Innovations’ team capability distribution is solely focused on answering the question, “Are we building the right thing?”
But building the right thing doesn’t just involve the product; it also includes crafting the right business model. This fundamental foundation is the cornerstone of any successful venture.
That’s why we’ve create entire models to ensure our delivery, our compensation, and our people are fully aligned with our customers. And once we validate your idea in the market, we’ll guide you to the right builder-practitioners at the right time using the Hollywood staffing model.
All of these models allow us to keep our central focus on truly driving business growth for ventures and new digital ideas.
With a team consisting of business strategists, growth hackers, customer discovery and development specialists, and market validation and research professionals, we don’t sell you hours of a developer’s time or push you to use technologies that our team happens to specialize in. We focus on market validation techniques to help you identify and build the right thing.
Key Litmus Test When Hiring a Company to Help with New Product Strategy
One simple way to determine if a team can truly deliver on the promise of “building the right thing” for a new market-validated idea is to look at a snapshot of the team composition.
Do they have a bench full of developers? Then they’ll want to sell you development hours.
Do they have a bunch of UX designers? Expect them to push for a UX project. If their team is mostly IoT experts, expect them to suggest IoT-based solutions.
Consultancies get paid by the hour – and where the majority of their staff titles lie, the story is told on where and how they make their money. They can’t afford to have their staff sit idle on the bench. They need to make business decisions based on staff allocations.
While they may have a few specialists that can do things like market research, ultimately, if an organization has the majority of their staff in a concentrated area of expertise, they are going to try to maneuver the engagement towards that direction.
Even when evaluating venture studios, it’s important to verify the team’s distribution. Many are actually custom software development companies for startups (with the majority of their staff being developers).
The True Key to Building the Right Thing
The true key to innovation isn’t found in fancy features, aesthetic designs, or lofty PowerPoint decks.
It lies in understanding your market, crafting a business model that aligns with your market’s needs, making data-driven decisions using quantitative market validation techniques, and having the courage to challenge your business model’s assumptions.
It’s about building the right thing for the right market with the right business model. Starting anywhere else when bringing a new idea to market is a recipe for an expensive mistake — we know this because we’ve been there ourselves and seen multiple projects go to the graveyard after spending millions of dollars building the wrong thing.
With their unparalleled expertise in early-stage growth hacking and go-to-market strategies, venture studios are true, fully aligned partners in creating value and fueling growth. With a venture studio as your partner, you’re equipped with the team, the techniques, and the tenacity to build the right thing, with the right business model, right from the start.
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