Learning From Startups - JEM 9 Marketing Consultancy

Learning Innovation From Successful Startups

Because innovation is not just for startups.

Are you are looking to move the balance of revenue away from existing towards new innovative solutions?  Or perhaps operationally you’re in great shape but are looking to the future.  But building something new is fundamentally different from operational excellence.

So with so much focus on technology, startups and software, here are learnings for business leaders from innovation at successful startups. 

There are wonderful books on personal accounts of entrepreneurship, and plenty to be learnt there. Here we will go beyond personal accounts to research data.

It’s not size that is an impediment to entrepreneurship and innovation; it is the existing operation itself, and especially the existing successful operation.

Peter Drucker

So how can we learn from startups to get beyond the barriers of an existing successful operation?

Factors Influencing New Business Success

Based on data from 200 startups, these 6 minutes of glorious insights are as relevant for new businesses as they are new business. Here the 5 key criteria for new business are: the idea, team and execution, funding, business model, and market timing.

Expending resources on a new venture, new company or innovative product offering is fundamentally different from on-going continuous improvement. In ‘why startups succeed’, Bill Gross, identifies the key criteria for new business success.

While you will must consider all 5 seriously, the number one criteria for startup success was timing i.e. the state of the market.  Ensure you understand the market place; what’s changing, understand customer needs, their ecosystem, technology and and competitive dynamics.

Make your decisions grounded in understanding beyond your capabilities, technology or organizational capacity.

  1. Timing
  2. Team and execution
  3. Idea

Early Metrics For New Business Success

New business can’t survive the scrutiny of comparison with mature products, operations and teams.  As you look to the future, be aware you’ll need different metrics (and expectations) for new ventures and innnovation.

All metrics should fulfill the three criteria of actionable, accessible and auditable but established business performance measures are about probability and ranges of success, typically revenue and profitability.  Innovation on the other hand is about change and the ‘possible’.

In other words, it’s not about revenue. But without metrics there’s no glory so how do you keep new product development and new innovations accountable?

Gathering Customers

It’s about gathering, and keeping customers. Tomasz Tunguz of Redpoint Venture Capital provides statistical proof  that focusing on customers is a winning formula.

Churn rate, or attrition rate, measures net gains or losses in customer numbers. It is a well know challenge for software subscription services and telco organizations. To benchmark or create target churn metrics, here’s a reference list of churn figures for startups.


Another perspective is that new business is about learning. The Lean Startup (a great read), an approach to new product development, focuses on an interative process of build, measure, learn. In other words the cover metrics focus on validated learning.

Aarrr Metrics

Pirate or Aarrr metrics is a third approach that even your CFO will approve of. Keeping new business accountable is part of Dave McClure’s role at 500 Startups, although the actual number of companies is north of 1600.

  • A: Acquisition – where / what channels do users come from?
  • A: Activation – what % have a “happy” initial experience?
  • R: Retention – do they come back & re-visit over time?
  • R: Referral – do they like it enough to tell their friends?
  • R: Revenue – can you monetize any of this behavior?

Plenty more on lean startup metrics here:

About Jane Morgan

With 20+ years high-tech marketing & product development experience from Boston to Billund, Berlin to Bangalore, Jane has managed teams and tech products with millions of installs, and millions of revenue (annually). She's researched and developed market strategy for global markets, and established the blueprint for product management in many new teams. As an intrapreneur turned entrepreneur, she changed vowels in 2014 and founded JEM 9 Marketing Consultancy. Today she works with CEOs & business leaders to assist them in understanding and reaching customers. Speaker on market research, technology marketing and product management.