Shaping Opportunities
Great Opportunities are Shaped by Experienced Professionals
History tells us that almost all great products and services products and services begin as something not so great. Remarkable success often involves some measure of prescience and luck. But more importantly, notable business successes are nearly always shaped by the skillful, patient and thoughtful decision-making of uniquely capable managers.
Conventional venture investment approaches emphasize the search for opportunities and rely on deep insights around long-term trends. Once identified, potential investments are evaluated thoroughly based on best available information. Those predicted to have promise are funded with a clear and specific value creation plan in mind; funds are then allocated (sometimes in massive quantities) to achieve that pre-determined plan – with limited deviation allowed from the original investment thesis.
At Innosight Ventures, we believe that success is better shaped than predicted, so we shape our own successes through in-market iteration of our business ideas. We aggressively, quickly and cheaply push initial offerings into the market. We then let customers determine success or failure. If they buy, we quickly shift our focus to achieving profitability; if they don’t buy, we figure out why and quickly and cheaply iterate the offering until we find something that delights them.
Shaping Ventures
We have a distinctive and systematic process for making good things happen with very little money.
Conventional wisdom says that it takes millions (or tens or even hundreds of millions) of dollars to produce compelling prototypes and initial revenues; but all of our ventures are structured to achieve success with modest investment: $250,000 or less to achieve initial revenues and $1 million or less to achieve profitability.
We begin by assuming we’re partially right and partially wrong in everything we do.
We take an “emergent” approach to building our ventures; that approach emphasizes retaining flexibility and gathering feedback from the marketplace as we figure out what’s right and what’s wrong about our strategy. We continually structure “quick and dirty” tests to help us obtain new, proprietary sources of information. And we don’t keep the strategy static – we continually shape and mold our businesses and strategy to meet the realities of the marketplace. But we don’t hesitate to shut down things that the market tells us very clearly simply won’t fly.