Starting the new Exponential Organisation!

Starting the new Exponential Organisation!

Starting a new Exponential Organisation for Explosive Growth!

The following synopsis of starting a new Exponential Organisation that can "virally" grow is based upon the work by Salim Ismail.  I have shared the initial paragraph of each of the steps -- to whet your appetitie to find out more!  It is a great book!

If you wish to further discuss how this framework might apply to your start-up or business, please feel free to contact me to set up a free initial consultation at kenbusinessdoctor.youcanbook.me  

Step 1: Select an MTP (Massive Transformative Purpose)

Step 1: Select an MTP (Massive Transformative Purpose). This is the most elemental and foundational aspect of a startup. Feeding on Simon Sinek’s “Why?” question, it is critical that you are excited and utterly passionate about the problem space you plan to attack.  

So, begin by asking the question: What is the biggest problem I’d like to see solved? Identify that problem space and then come up with an MTP for it.  

Step 2: Join or Create Relevant MTP Communities

The collaborative power of communities is critical to any ExO. Whatever  your passion (let’s say you dream of curing cancer), there are communities out there filled with other passionate, purpose-driven people devoted to the same crusade. 

Step 3: Compose a Team

While the founding team in any startup is important, given the rapid scaling of an ExO company with a very small footprint in terms of resources, the careful composition of its founding team is especially critical.

Step 4: Breakthrough Idea

We don’t have to tell you that this next step is a big one. It is essential to leverage technology or information in some way to transform the status quo. And when we say transform, we really do mean it. ExOs are not about incremental improvement in a marketplace. They are about radical change. According to Marc Andreessen, “Most entrepreneurs prefer failing conventionally rather than succeeding unconventionally.”  

Remember, the three key success factors for an ExO idea are:

  1. First, a minimum 10x improvement over the status quo. 
  2. Second, leveraging information to radically cut the cost of marginal supply (i.e., the cost to expand the supply side of the business should be minimal).
  3. Third, the idea should pass the “toothbrush test” originated by Larry Page: Does the idea solve a real customer problem or use case on a frequent basis? Is it something so useful that a user would go back to it several times a day?

Step 5: Build a Business Model Canvas

Once a core idea or breakthrough has been identified, the next step is to elaborate how to get it to market. Our suggested tool for this is the Business Model Canvas (BMC), which was created by Alexander Osterwalder and has been popularized by the Lean Startup model. You begin the process by diagramming the various components of the model (value propositions, customer segments, etc.). A warning: At this stage, it is important that the BMC be simple and not overthought. Experimentation will navigate you to the best path and provide the next level of fidelity.

Step 6: Find a Business Model

It is also important to understand that if you’re going to achieve a 10x improvement, there’s a strong likelihood that your company will require a completely new business model. As Clayton Christensen illustrated in The Innovators Dilemma, which was published in 1997, disruption is mostly achieved by a startup offering a less expensive product using emerging technologies and meeting a future or unmet customer need or niche. Christensen emphasized that it is not so much about disruptive products, but more about new business models threatening incumbents.

Step 7: Build the MVP

A key output of the Business Model Canvas is what’s called the Minimum Viable Product, or MVP. The MVP is a kind of applied experiment to determine the simplest product that will allow the team to go to market and see how users respond (as well as help find investors for the next round of development). Feedback loops can then rapidly iterate the product to optimize it and drive the feature roadmap of its development. Learning, testing assumptions, pivoting and iterating are key in this step.

Step 8: Validate Marketing and sales

Once the product is being used in its chosen market(s), a customer acquisition funnel will need to be established to help drive new visitors to the product. Its role is to qualify potential customers and convert them into users and paying customers. A good starting point for this is Dave McClure’s AARRR, an onomatopoeically titled “Pirate” model for startup metrics. The model tracks the following layers and key metrics: Acquisition: How do users locate you? (Growth metric) Activation: Do users have a great first experience? (Value metric) Retention: Do users come back? (Value metric) Revenue: How do you make money? (Value metric) Referral: Do users tell others? (Growth metric).

Step 9: implement SCALE and IDEAS

As already noted, becoming an ExO does not mean implementing all 11 SCALE and IDEAS attributes. A great MTP and three or four other attributes are usually sufficient for success. The key, of course, is determining which attributes are the right ones to execute. The following is a guide to implementing ExO attributes into a startup:  

  • MTP: Formulate an MTP in a particular problem space, one that all founders feel passionate about.
  •  Staff on Demand: Use contractors, SoD platforms wherever possible; keep FTEs to a minimum.
  •  Community & Crowd: Validate idea in MTP communities.
    • Get product feedback.
    • Find co-founders, contractors and experts.
    • Use crowdfunding and crowdsourcing to validate market demand and as a marketing technique.
  •  Algorithms: Identify data streams that can be automated and help with product development. Implement cloud-based and open source machine and deep learning to increase insights.
  •  Leveraged Assets: Do NOT acquire assets.
    • Use cloud computing, TechShop for product development.
    • Use incubators like Y Combinator and Techstars for office, funding, mentoring and peer input.
    • Starbucks as office.
  •  Engagement: Design product with engagement in mind.
    • Gather all user interactions.
    • Gamify where possible.
    • Create a digital reputational system of users and suppliers to build trust and community.
    • Use incentive prizes to engage crowd and create buzz.
  •  Interfaces: Design custom processes for managing SCALE; do not automate until you’re ready to scale.
  •  Dashboards: Set up OKR and value, serendipity, and growth metrics dashboards; do not implement value metrics until product finalized 
  • Experimentation: Establish culture of experimentation and constant iteration. Be willing to fail and pivot as needed.
  •  Autonomy: Implement lite version of Holacracy. Start with the General Company Circle as a first step; then move onto governance meetings.
    • Implement the GitHub technical and organizational model with radical openness, transparency and permission.
  •  Social Technologies: Implement file sharing, cloud-based document management.
    • Collaboration and activity streams both internally and within your community.
    • Make a plan to test and implement telepresence, virtual worlds and emotional sensing.

Step 10: Establish the culture

Perhaps the most critical step in building an ExO involves establishing its culture. Think again about PayPal’s culture of close friendship rather than formal work relationships. In a fast-scaling organization, culture—along with the MTP and Social Technologies—is the glue that keeps a team together through the quantum leaps of an ExO’s growth. Needless to say, given that even defining the term culture has proven enduringly difficult, this is a particularly challenging step.

Step 11: ask Key questions periodically

There are eight key questions to think about—not once, but repeatedly—as you build out your startup. Successfully answering each one gives you a passing grade in terms of this chapter: Who is your customer? Which customer problem are you solving? What is your solution and does it improve the status quo by at least 10x? How will you market the product or service? How are you selling the product or service? How do you turn customers into advocates using viral effects and Net Promoter Scores to drive down the marginal cost of demand? How will you scale your customer segment? How will you drive the marginal cost of supply towards zero?

Step 12: building and maintaining a platform

Leading platform expert Sangeet Paul Choudary identified the four steps needed to build a successful platform (as opposed to a successful product): Identify a pain point or use case for a consumer. Identify a core value unit or social object in any interaction between a producer and consumer. This could be anything. Pictures, jokes, advice, reviews, information about sharing rooms, tools and car-rides are examples of things that have led to successful platforms. Remember that many people will be both producers and consumers, and use this to your advantage. Design a way to facilitate that interaction. Then see if you can build it as a small prototype that you can curate yourself. If it works at that level, it will be worth taking to the next level and scaling. Determine how to build a network around your interaction. Find a way to turn your platform user into an ambassador. Before you know it, you’ll be on a roll.

So here was a teaser for finding out more information about Exponential Organizations -- a powerful model for planning, transforming and implementing an organisation that can go viral and sustainably -- and help you achieve your big hairy audacious ideas and purposes!

If you wish to further discuss how this framework might apply to your start-up or business, please feel free to contact me to set up a free initial consultation at kenbusinessdoctor.youcanbook.me 

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