One of the most significant challenges faced by businessmen and entrepreneurs is to decipher which innovation or business ideas are worth developing and which ones they must discard. As it is generally recognized, the problem is not to have new ideas but to discover in which it is worth investing time and money. The recommended mechanism is to test the relevance and value of the concept with the user through a series of progressive, simple, fast, and cheap experiments. The instrument of experimentation par excellence is the prototype in its different manifestations, which allow discovering the relevant design for the market. This chapter explores prototyping.
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Make sure you are building the right “it”, before you built it right (Savoia, 2011)
Figure 1. Source: Portillo, E. (2016), The Stragile Conscious Corporate Innovation Model. TopStep 16. From Pretendotypes, To Pretotypes, And Prototypes
The innovative capacity of established and gestating companies depends, to a large extent, on the experimentation of new ideas and concepts related to the product, process, or business system. Due to its nature, the development of new concepts is subject to high doses of uncertainty, with failure rates ranging from 35 to 95 percent, depending on the category and source consulted. In the case of gestating companies, in Mexico 75% of these companies do not survive past the second year of operations (Gasca, 2014), depending on the validation of a single concept. Interestingly, the different studies on “causes” report reasons related to lack of income, poor planning, or implementation problems, but rarely mention the absence of the product-market adjustment.
Without the intervention of man, scientific studies have estimated the probability of reaching the adult life of a sea turtle—from the incubation of the egg—one in a thousand. This represents a “failure” rate of 99%. Why should it be different for a concept in its attempt to develop a market? The failure rate should not alarm us, a sine qua non of evolutionary systems. What is alarming is the lack of sufficient experimentation to discover and promote sufficient innovations, injecting vitality into the economic and social system in the process.
How can an established or emerging company develop new concepts without dying in the process? In the context of the agile strategy, the answer lies in the ability of the organization or the entrepreneurial team to quickly experience the assumptions of the strategy, seeking the best adjustment to an environment in changing and accelerating conditions. For this, it is necessary to discuss the strategic relevance of prototyping in the survival efforts of the companies, considering a competitive context with selection mechanisms that favor the emergence of relevant designs.