I recently had the pleasure of attending the US premiere of “BRILLIANT! The Blinding Enlightenment
of Nikola Tesla.” The production has haunted me these last few weeks. Born in 1856 and emigrated to
the US in 1884, Nikola Tesla was one of the most significant inventors of our time with dozens of
inventions including x-ray technology, AC power, RF oscillators and robotics, just to name a few. For the
non-Tesla aware reader, here’s the short version of his story: a brilliant young penniless immigrant
inventor came to America; worked for the monopolistic incumbent vendor with too much at stake to
jeopardize their cash cow (GE/Thomas Edison/DC Power); got screwed over by his employer; quit;
formed new company to compete against former employer; developed superior product with no legacy
technology (Westinghouse/AC Power); made fortune; serially invested in new research; lost fortune; went
mad; died in relative obscurity; intellectual property confiscated by FBI upon death.
If Nikola were alive today, what would he have thought of my past three Musings on Market Validation?
Probably not much, I suspect. Smarter men than I have written countless business tomes on the topic of
disruptive innovation, such as Clayton Christensen’s "Innovator's Dilemma" and Andy Grove’s "Only the
Paranoid Survive". The basic premise is that enormous wealth generation opportunities get created when
large successful incumbent vendors fail to capitalize on a new technology or business model, resulting in
catastrophic consequences to their market share and possibly their viability. Large companies like AT&T
ignore to their period or can't get the organization to move fast enough to take advantage of a disruption
like VoIP.
The Age of Incrementalism
Frankly, we have not seen much disruptive technology in the past five years. Customers just don’t seem
to have much of an appetite for it as they recover from the hangover of technology over-indulgence in
the era prior to this. Also, the funding climate and resulting capital structures for start-ups have not
encouraged a “Think Different” mentality. With the IPO door locked shut, a good outcome was a base
hit M&A transaction filling some missing feature that an established vendor lacked. As a result, the vast
majority of ideas buzzing around Silicon Valley and other hot spots of Information Technology have been
incremental and are easily validated or invalidated via the customer acid tests described in previous
Musings.
Disruptive Signals
But, to a small degree at least, we seem to be coming out of the purely incremental innovation mode.
That means that in some cases we need to apply techniques for validating potentially disruptive ideas that
are quite different from the techniques for validating incremental ideas. Therefore, the first question you
must ask yourself is “Am I disruptive or incremental?” in order to determine which playbook to operate
from.
It is “cool” to be disruptive, and therefore, there is a strong pre-disposition to filter facts and observations
to convince yourself of that fact. But if you have an incremental concept and you manage it as a
disruptive one, you will almost certainly make a series of strategic and tactical errors that will be fatal.
Putting it in Geoff Moore terms, if you are entering a Tornado and are spending your time looking for
Beachheads over Chasms, you are dead meat.
My definition of truly disruptive technology is when usage behavior is permanently altered forever.... for
example, after a customer experiences a new solution and exclaims, “I will never do XYZ again.”
Disruptions can permanently alter vendor landscapes and shake the customer’s status quo.
There are some indicators and questions to ask yourself that help determine whether your idea is
disruptive or not.
The goal of this Musing is not to conjecture on current technologies that fit the disruptive label, although
I suspect that some forms of nanotechnology, grid computing, fuel cells, and wireless mesh networks may
fit the label. I recently caught up with Paul Koontz, GP at Foundation Capital. Paul updated me on a
company called DUST Networks*, one of his portfolio companies. DUST’s SmartMesh Networks uses
very low power wireless sensors coupled with their wireless mesh networking platform for sensing and
control applications. For example, imagine during an Iraqi fire-fight, an army helicopter sprinkles tiny
nodes over a battlefield in a remote area to help track troop movements, update weather conditions and
build portable communications infrastructure; imagine nodes measuring the sugar content of pinot noir
grapes before a cold front hits; or imagine building automation, industrial monitoring and even remote
security using the same platform. That all seems pretty damn disruptive to me.
WARNING: Don’t force fit the disruptive label. Yes, it’s “cool” to be disruptive. But not all disruptive ideas are
valuable and certainly many incremental ideas are. The key isn’t to try and be in one category or another but to determine
which you are in and then use the proper techniques for validating and developing the concept.
Disruption Validation
There is no science to validating disruptive technology. Frankly, sometimes it is a leap of faith and no
methodology pontificated by a consultant like me is a sure thing. The problem is that often it is very
difficult to validate in advance a truly disruptive technology because the customer has to experience the
technology impact first hand and then have their behavior changed. The rules are all different since there
are no known large incumbent vendors or other start-up competitors to emulate or critique. Much of
validation is spent on education, anticipating behavioral or usage mode changes, probing and floating trial
concepts to see what comes back. Zero time is spent on the length of the feature list and the list price. It
is important to recognize that in certain cases a technology may be disruptive, but the customer may not
be ready for it because they are unable or unwilling to be on the bleeding edge of the transition.
This often leads to “circular logic” where an entrepreneur who wants to be disruptive uses poor customer
feedback as the evidence of the disruptive nature of his idea! The problem is that often this is also a
symptom of a bad incremental idea. Again, this is why it is important to be objective about the
disruptive/incremental label.
TIPS ON VALIDATING DISRUPTIVE TECHNOLOGIES
There Needs to be Early Signs of a Market Somewhere.......
Let’s not forget in the validation process, you are using other people’s money which by definition is finite.
The VC model just simply doesn’t work unless there is some available market within a 24 to 36 month
window.
Paul mentioned that the DUST board spends a lot of time developing a disciplined approach to validating
potential market opportunities, so they don’t get too far down the path ahead of the market and revenue.
The initial market TAM (Total Available Market) does not have to be huge, but it does need to be an
indicator. Technology often spills over from some other unrelated market and creates new and existing
opportunities in unexpected places. Who would have thought that a DARPA grant to explore alternative
communication systems in the event of a nuclear attack would have ultimately resulted in Amazon.com?
In DUST’s case, the founding team had been around the military and DOD applications from an
academia perspective and recognized the commercial applicability of the technology before others had a
chance to exploit.
The challenge for DUST is to filter the most relevant applications that will yield early revenue traction to
grow or bridge to other markets that will drive sustainable revenue. In the beginning, validation will be
both push driven (i.e. here is what we think is a good application let’s go find someone to validate) and
pull driven (i.e. sifting through the unsolicited inquiries from the outside).
Target the “Visionaries”
An important validation tip: have the wisdom to know whose opinions matter. In the case of a disruptive
idea, the last people you want to talk to are operations people or others for whom the cost-of-change is a
primary non-motivator. You need to talk to the visionaries.
Who are they? Where can I find them? A visionary is someone inside of a company who often has a
high IQ, is strongly opinionated, possesses an innate ability to piece seemingly unrelated business and
technical building blocks into a passionate vision, and, oh yeah, are often exasperated that others can’t see
how obvious their vision is. Visionaries are critically needed inside of big companies, but they can be
troublemakers. They constantly question the status quo, much to the chagrin of senior management who
are often focused on the next 90 days in the quarter. Perhaps the poster child for a visionary is Jim
Clark, founder of SGI, Netscape, Healtheon/WebMD, Neoteris, Shutterfly,etc. Jim saw the technical
computing market as a niche and recent advancements in integrating graphics algorithms into commodity
silicon were going to rob SGI of their stranglehold on the high end 3D graphics market. He single
handedly dragged SGI kicking and screaming into the consumer and interactive TV markets with deals
with Nintendo and Time Warner. Unfortunately, SGI could never see beyond their core markets which
were evaporating. One memorable moment at SGI for me was getting Jim’s idea on a project I had
been working on for six months around developing a single board computer for kiosks and arcade
machines. Jim, silent during most of my presentation, uttered seven classic words I will never forget,
“This is a pimple on my ass.” Given his next few jobs, I guess he was right.
Don’t Ever Use PowerPoint
Virtually 100% of the time, Visionaries will be completely bored and will be writing on the white board
anyway. I am not quite sure why this happens. It could be that Visionaries grasp the idea more quickly
than most mortals; maybe it is a control thing; or maybe they subliminally think if you had time to make
nice charts that you can’t creatively think on your feet, hence making your idea, by definition, non-
disruptive. At the end of most of these meetings, my head usually hurts because the meetings have a
complete non-linear progression, and topics are fairly random. It is only until we meet again or we have
time to reflect on what was said that the light bulb goes on.
The key validation trick with Visionaries is to internalize their world view and assimilate other data points.
If they are consistent, figure out a way to become aligned with them for your mutual benefit. This is a
classic example of run as fast as you can to get out in front of the parade before it passes you by.
Lunatic Fringe or Early Adopters?
In my career, I have found Visionaries in government, military and university research labs working on
applications ranging from GRID computing, scientific visualization and HPC. Often Visionaries migrate
here because there is often access to funds, general avoidance of people in suits and fewer short term
time constraints to produce results. The validation trick here is not finding these people. They are fairly
accessible and often speak at conferences. The key is making sure they are a proxy for a real market in
the future. An example of this tension is work being done on the massively geographically distributed
cluster project called the TeraGrid project. This project is a joint effort between Caltech, Argonne
National Labs, San Diego Supercomputing Center and the NCSA. Hopefully, this work will advance the
commercial industries’ understanding of how to scale low cost clusters and geographically distribute
storage for applications like disaster recovery and pharmaceutical drug discovery.
Occasionally you do find large commercial companies with individuals whose job it is to think “out of the
box” and have a longer term strategic view. Whether they are “Imagineers” or VPs of Next Generation
Infrastructures, Directors of Vision, etc. treat them like gold.
One of Acuitive’s favorites is Robert Keahey who is responsible for EDS’ Technology Strategy and
Architecture. Robert is a regular visitor to the Silicon Valley in order to keep his finger on the pulse of
start-up activity. One of Robert’s responsibilities is to make sure EDS does not miss a disruptive
technology cycle and lose ground to IBM Global Services or some other large service provider to the
Fortune 1000. Robert has helped champion Data Center Markup Language (DCML), which is a vendor
independent XML based spec to increase data center automation, system wide management and utility
computing. Robert’s evangelism of DCML is a part of EDS’ Agile Enterprise Framework and could
have huge margin implications while offering unprecedented flexibility as a competitive weapon and avoid
vendor-lock in. Another Validation tip: try and create disruptive technologies that make grand initiatives
like utility computing real vs. “Market-tectures.” I like to think a part of my job is to help keep Bob’s
pipeline busy so ACT Venture Partners' portfolio companies can fill some of the holes in the EDS vision.
If you can’t find visionaries that share your vision, your idea may be in trouble or it may just be a bad
idea or too far ahead of it’s time. But even if you do find visionaries who share your view of the future,
you are not out of the woods. It will be up to you to think through the market opportunity associated
with a shared vision, because usually the Visionaries you find who share your vision don’t care.
Sometimes these people often only build exactly one of whatever they are working on.
Form a Federation of Disrupters
Many Visionaries are keenly aware of the work of their peers...sort of like how superheroes like
Spiderman keep tabs on Superman and The Hulk’s latest capers. A neat tactic is to get these Visionaries
in a room together on a regular basis. This could be a formal Technical Advisory Board, an invitation
only “Birds-of-a-Feather” at a conference (i.e. in the graphics industry every year at SIGGRAPH pow-
wow) or even a focus group if you can find a geographically central location. Why this is important is that
with a room full of respected peers there is a much greater chance of consolidation of ideas and
collaborative constructive feedback which could be lost in 1-1 meetings.
Visualize Life after the Disruption and Work Backward
Many passionate start-up founders often take on the roll of hucksters, peddling their vision to anyone
who will listen... normally at conferences or on trade show floors. Back to Tesla. Every now and again to
demonstrate the safety of his DC power, Edison was known to use Tesla’s AC power to electrocute a
stray cat, dog or even Topsy the Coney Island Carnival Elephant. Even if the customer doesn’t
immediately understand the impact of the disruptive technology, it is critical to shape a vision of life after
the disruption and make it as tangible as possible.
CAUTION: Killing something or using it on yourself is NOT recommended in the demo.
Visualizing the future may take the form of mock-ups or software demos that start to get the customers
thinking about why they won’t be able to live without your disruptive technology. Hopefully, over time
they will realize that their incumbent vendor could not possibly satisfy this vision. Edison was incapable
of embracing Tesla’s AC Power because he had too much riding on harvesting his own patents for DC
power.**
In 1988, John Sculley, former CEO of Apple Computer came to speak to my class at the Stanford
Business School armed with a block of wood in the shape of what would become Apple’s PDA (the
Newton). The former soda pop marketer showed us a video called “Knowledge Navigator: A Day in the
Life,” evangelizing about how our lives would be transformed by our handheld personal digital assistant
utilizing hand writing and speech recognition to manage our daily information, our schedule, our
communications and our workflow. It should be noted that this was before the ubiquitous penetration of
the World Wide Web, Palm Pilot, VoIP conferencing, Wi-Fi and even Windows GUI etc. As a student, it
had a huge impact on me. I wanted to be a part of a company that was trying to make this tangible vision
happen, so I went to work at Apple in the late 80s. Visualizing life after the disruption will help you better
understand who your target customer segments are.
A Giant Leap of Faith
The validation process for disruptive technology may or may not yield immediate concrete results.
Hopefully, the validation process may de-risk or help to sharpen the original vision and may attract
evangelists along the way.
Unleashing potential wealth creation opportunities is all about taking calculated risks and having the
courage to step off the treadmill to pursue a dream or a vision. From Edison to Sergey Brin, most will
fail and few will succeed. I am proud to be an American and live in a country where a penniless
immigrant like Nikola Tesla has the opportunity to change mankind for the better for future generations.
It has been one of the greatest honors of my life to play a small part in helping these dreamers validate
their visions. Dream On!
_______________________________________________
*ACT Venture Partners has no affiliation with DUST Networks.
**An interesting footnote from Edison’s showmanship was the invention of the electric chair.
of Nikola Tesla.” The production has haunted me these last few weeks. Born in 1856 and emigrated to
the US in 1884, Nikola Tesla was one of the most significant inventors of our time with dozens of
inventions including x-ray technology, AC power, RF oscillators and robotics, just to name a few. For the
non-Tesla aware reader, here’s the short version of his story: a brilliant young penniless immigrant
inventor came to America; worked for the monopolistic incumbent vendor with too much at stake to
jeopardize their cash cow (GE/Thomas Edison/DC Power); got screwed over by his employer; quit;
formed new company to compete against former employer; developed superior product with no legacy
technology (Westinghouse/AC Power); made fortune; serially invested in new research; lost fortune; went
mad; died in relative obscurity; intellectual property confiscated by FBI upon death.
If Nikola were alive today, what would he have thought of my past three Musings on Market Validation?
Probably not much, I suspect. Smarter men than I have written countless business tomes on the topic of
disruptive innovation, such as Clayton Christensen’s "Innovator's Dilemma" and Andy Grove’s "Only the
Paranoid Survive". The basic premise is that enormous wealth generation opportunities get created when
large successful incumbent vendors fail to capitalize on a new technology or business model, resulting in
catastrophic consequences to their market share and possibly their viability. Large companies like AT&T
ignore to their period or can't get the organization to move fast enough to take advantage of a disruption
like VoIP.
The Age of Incrementalism
Frankly, we have not seen much disruptive technology in the past five years. Customers just don’t seem
to have much of an appetite for it as they recover from the hangover of technology over-indulgence in
the era prior to this. Also, the funding climate and resulting capital structures for start-ups have not
encouraged a “Think Different” mentality. With the IPO door locked shut, a good outcome was a base
hit M&A transaction filling some missing feature that an established vendor lacked. As a result, the vast
majority of ideas buzzing around Silicon Valley and other hot spots of Information Technology have been
incremental and are easily validated or invalidated via the customer acid tests described in previous
Musings.
Disruptive Signals
But, to a small degree at least, we seem to be coming out of the purely incremental innovation mode.
That means that in some cases we need to apply techniques for validating potentially disruptive ideas that
are quite different from the techniques for validating incremental ideas. Therefore, the first question you
must ask yourself is “Am I disruptive or incremental?” in order to determine which playbook to operate
from.
It is “cool” to be disruptive, and therefore, there is a strong pre-disposition to filter facts and observations
to convince yourself of that fact. But if you have an incremental concept and you manage it as a
disruptive one, you will almost certainly make a series of strategic and tactical errors that will be fatal.
Putting it in Geoff Moore terms, if you are entering a Tornado and are spending your time looking for
Beachheads over Chasms, you are dead meat.
My definition of truly disruptive technology is when usage behavior is permanently altered forever.... for
example, after a customer experiences a new solution and exclaims, “I will never do XYZ again.”
Disruptions can permanently alter vendor landscapes and shake the customer’s status quo.
There are some indicators and questions to ask yourself that help determine whether your idea is
disruptive or not.
- Is there a fundamental economic incentive present to adopt the disruption? (We mean 10x-100x
better than today.) - Do you believe that today’s market leaders have too much at stake and are inherently
incapable or unwilling to “eat their children” to participate in the disruption? - Are customers ready, willing and capable of changing their entrenched usage scenarios?
- Is there a shift in empowerment that gives new users unprecedented access to the disruption?
- If you are successful, will your mother or grandmother eventually hear about it and perhaps be
impacted by it?
The goal of this Musing is not to conjecture on current technologies that fit the disruptive label, although
I suspect that some forms of nanotechnology, grid computing, fuel cells, and wireless mesh networks may
fit the label. I recently caught up with Paul Koontz, GP at Foundation Capital. Paul updated me on a
company called DUST Networks*, one of his portfolio companies. DUST’s SmartMesh Networks uses
very low power wireless sensors coupled with their wireless mesh networking platform for sensing and
control applications. For example, imagine during an Iraqi fire-fight, an army helicopter sprinkles tiny
nodes over a battlefield in a remote area to help track troop movements, update weather conditions and
build portable communications infrastructure; imagine nodes measuring the sugar content of pinot noir
grapes before a cold front hits; or imagine building automation, industrial monitoring and even remote
security using the same platform. That all seems pretty damn disruptive to me.
WARNING: Don’t force fit the disruptive label. Yes, it’s “cool” to be disruptive. But not all disruptive ideas are
valuable and certainly many incremental ideas are. The key isn’t to try and be in one category or another but to determine
which you are in and then use the proper techniques for validating and developing the concept.
Disruption Validation
There is no science to validating disruptive technology. Frankly, sometimes it is a leap of faith and no
methodology pontificated by a consultant like me is a sure thing. The problem is that often it is very
difficult to validate in advance a truly disruptive technology because the customer has to experience the
technology impact first hand and then have their behavior changed. The rules are all different since there
are no known large incumbent vendors or other start-up competitors to emulate or critique. Much of
validation is spent on education, anticipating behavioral or usage mode changes, probing and floating trial
concepts to see what comes back. Zero time is spent on the length of the feature list and the list price. It
is important to recognize that in certain cases a technology may be disruptive, but the customer may not
be ready for it because they are unable or unwilling to be on the bleeding edge of the transition.
This often leads to “circular logic” where an entrepreneur who wants to be disruptive uses poor customer
feedback as the evidence of the disruptive nature of his idea! The problem is that often this is also a
symptom of a bad incremental idea. Again, this is why it is important to be objective about the
disruptive/incremental label.
TIPS ON VALIDATING DISRUPTIVE TECHNOLOGIES
There Needs to be Early Signs of a Market Somewhere.......
Let’s not forget in the validation process, you are using other people’s money which by definition is finite.
The VC model just simply doesn’t work unless there is some available market within a 24 to 36 month
window.
Paul mentioned that the DUST board spends a lot of time developing a disciplined approach to validating
potential market opportunities, so they don’t get too far down the path ahead of the market and revenue.
The initial market TAM (Total Available Market) does not have to be huge, but it does need to be an
indicator. Technology often spills over from some other unrelated market and creates new and existing
opportunities in unexpected places. Who would have thought that a DARPA grant to explore alternative
communication systems in the event of a nuclear attack would have ultimately resulted in Amazon.com?
In DUST’s case, the founding team had been around the military and DOD applications from an
academia perspective and recognized the commercial applicability of the technology before others had a
chance to exploit.
The challenge for DUST is to filter the most relevant applications that will yield early revenue traction to
grow or bridge to other markets that will drive sustainable revenue. In the beginning, validation will be
both push driven (i.e. here is what we think is a good application let’s go find someone to validate) and
pull driven (i.e. sifting through the unsolicited inquiries from the outside).
Target the “Visionaries”
An important validation tip: have the wisdom to know whose opinions matter. In the case of a disruptive
idea, the last people you want to talk to are operations people or others for whom the cost-of-change is a
primary non-motivator. You need to talk to the visionaries.
Who are they? Where can I find them? A visionary is someone inside of a company who often has a
high IQ, is strongly opinionated, possesses an innate ability to piece seemingly unrelated business and
technical building blocks into a passionate vision, and, oh yeah, are often exasperated that others can’t see
how obvious their vision is. Visionaries are critically needed inside of big companies, but they can be
troublemakers. They constantly question the status quo, much to the chagrin of senior management who
are often focused on the next 90 days in the quarter. Perhaps the poster child for a visionary is Jim
Clark, founder of SGI, Netscape, Healtheon/WebMD, Neoteris, Shutterfly,etc. Jim saw the technical
computing market as a niche and recent advancements in integrating graphics algorithms into commodity
silicon were going to rob SGI of their stranglehold on the high end 3D graphics market. He single
handedly dragged SGI kicking and screaming into the consumer and interactive TV markets with deals
with Nintendo and Time Warner. Unfortunately, SGI could never see beyond their core markets which
were evaporating. One memorable moment at SGI for me was getting Jim’s idea on a project I had
been working on for six months around developing a single board computer for kiosks and arcade
machines. Jim, silent during most of my presentation, uttered seven classic words I will never forget,
“This is a pimple on my ass.” Given his next few jobs, I guess he was right.
Don’t Ever Use PowerPoint
Virtually 100% of the time, Visionaries will be completely bored and will be writing on the white board
anyway. I am not quite sure why this happens. It could be that Visionaries grasp the idea more quickly
than most mortals; maybe it is a control thing; or maybe they subliminally think if you had time to make
nice charts that you can’t creatively think on your feet, hence making your idea, by definition, non-
disruptive. At the end of most of these meetings, my head usually hurts because the meetings have a
complete non-linear progression, and topics are fairly random. It is only until we meet again or we have
time to reflect on what was said that the light bulb goes on.
The key validation trick with Visionaries is to internalize their world view and assimilate other data points.
If they are consistent, figure out a way to become aligned with them for your mutual benefit. This is a
classic example of run as fast as you can to get out in front of the parade before it passes you by.
Lunatic Fringe or Early Adopters?
In my career, I have found Visionaries in government, military and university research labs working on
applications ranging from GRID computing, scientific visualization and HPC. Often Visionaries migrate
here because there is often access to funds, general avoidance of people in suits and fewer short term
time constraints to produce results. The validation trick here is not finding these people. They are fairly
accessible and often speak at conferences. The key is making sure they are a proxy for a real market in
the future. An example of this tension is work being done on the massively geographically distributed
cluster project called the TeraGrid project. This project is a joint effort between Caltech, Argonne
National Labs, San Diego Supercomputing Center and the NCSA. Hopefully, this work will advance the
commercial industries’ understanding of how to scale low cost clusters and geographically distribute
storage for applications like disaster recovery and pharmaceutical drug discovery.
Occasionally you do find large commercial companies with individuals whose job it is to think “out of the
box” and have a longer term strategic view. Whether they are “Imagineers” or VPs of Next Generation
Infrastructures, Directors of Vision, etc. treat them like gold.
One of Acuitive’s favorites is Robert Keahey who is responsible for EDS’ Technology Strategy and
Architecture. Robert is a regular visitor to the Silicon Valley in order to keep his finger on the pulse of
start-up activity. One of Robert’s responsibilities is to make sure EDS does not miss a disruptive
technology cycle and lose ground to IBM Global Services or some other large service provider to the
Fortune 1000. Robert has helped champion Data Center Markup Language (DCML), which is a vendor
independent XML based spec to increase data center automation, system wide management and utility
computing. Robert’s evangelism of DCML is a part of EDS’ Agile Enterprise Framework and could
have huge margin implications while offering unprecedented flexibility as a competitive weapon and avoid
vendor-lock in. Another Validation tip: try and create disruptive technologies that make grand initiatives
like utility computing real vs. “Market-tectures.” I like to think a part of my job is to help keep Bob’s
pipeline busy so ACT Venture Partners' portfolio companies can fill some of the holes in the EDS vision.
If you can’t find visionaries that share your vision, your idea may be in trouble or it may just be a bad
idea or too far ahead of it’s time. But even if you do find visionaries who share your view of the future,
you are not out of the woods. It will be up to you to think through the market opportunity associated
with a shared vision, because usually the Visionaries you find who share your vision don’t care.
Sometimes these people often only build exactly one of whatever they are working on.
Form a Federation of Disrupters
Many Visionaries are keenly aware of the work of their peers...sort of like how superheroes like
Spiderman keep tabs on Superman and The Hulk’s latest capers. A neat tactic is to get these Visionaries
in a room together on a regular basis. This could be a formal Technical Advisory Board, an invitation
only “Birds-of-a-Feather” at a conference (i.e. in the graphics industry every year at SIGGRAPH pow-
wow) or even a focus group if you can find a geographically central location. Why this is important is that
with a room full of respected peers there is a much greater chance of consolidation of ideas and
collaborative constructive feedback which could be lost in 1-1 meetings.
Visualize Life after the Disruption and Work Backward
Many passionate start-up founders often take on the roll of hucksters, peddling their vision to anyone
who will listen... normally at conferences or on trade show floors. Back to Tesla. Every now and again to
demonstrate the safety of his DC power, Edison was known to use Tesla’s AC power to electrocute a
stray cat, dog or even Topsy the Coney Island Carnival Elephant. Even if the customer doesn’t
immediately understand the impact of the disruptive technology, it is critical to shape a vision of life after
the disruption and make it as tangible as possible.
CAUTION: Killing something or using it on yourself is NOT recommended in the demo.
Visualizing the future may take the form of mock-ups or software demos that start to get the customers
thinking about why they won’t be able to live without your disruptive technology. Hopefully, over time
they will realize that their incumbent vendor could not possibly satisfy this vision. Edison was incapable
of embracing Tesla’s AC Power because he had too much riding on harvesting his own patents for DC
power.**
In 1988, John Sculley, former CEO of Apple Computer came to speak to my class at the Stanford
Business School armed with a block of wood in the shape of what would become Apple’s PDA (the
Newton). The former soda pop marketer showed us a video called “Knowledge Navigator: A Day in the
Life,” evangelizing about how our lives would be transformed by our handheld personal digital assistant
utilizing hand writing and speech recognition to manage our daily information, our schedule, our
communications and our workflow. It should be noted that this was before the ubiquitous penetration of
the World Wide Web, Palm Pilot, VoIP conferencing, Wi-Fi and even Windows GUI etc. As a student, it
had a huge impact on me. I wanted to be a part of a company that was trying to make this tangible vision
happen, so I went to work at Apple in the late 80s. Visualizing life after the disruption will help you better
understand who your target customer segments are.
A Giant Leap of Faith
The validation process for disruptive technology may or may not yield immediate concrete results.
Hopefully, the validation process may de-risk or help to sharpen the original vision and may attract
evangelists along the way.
Unleashing potential wealth creation opportunities is all about taking calculated risks and having the
courage to step off the treadmill to pursue a dream or a vision. From Edison to Sergey Brin, most will
fail and few will succeed. I am proud to be an American and live in a country where a penniless
immigrant like Nikola Tesla has the opportunity to change mankind for the better for future generations.
It has been one of the greatest honors of my life to play a small part in helping these dreamers validate
their visions. Dream On!
_______________________________________________
*ACT Venture Partners has no affiliation with DUST Networks.
**An interesting footnote from Edison’s showmanship was the invention of the electric chair.
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
ACT Venture Partners Inc.
ACT Venture Partners Inc.
After the last three Musings on market validation, my friend Bob Cousins, a serial
entrepreneur in his own right, chuckles and says, “Congratulations Tom, if some of
the great entrepreneurs of our time read your Musings there would be no PC, no
laser printer, no Ethernet or other countless discrete breakthrough innovations.”
The final topic of the validation Musings series is about Validation for Disruptive
Technology. How do you validate a market or product concept when your target
customer does not understand the practical applications of your technology or
perhaps they may fear its implications?
“Ain’t Never Caught One of Them Before”