The first mile is a book by Scott D. Anthony who is a managing partner at Innosight, a global strategic innovation consulting and investment firm.
The First Mile was an interesting read and we would recommend it to all the budding entrepreneurs and startups out there who are planning to launch their products.
The First Mile serves as a reality check, asking the difficult questions that need to be answered and followed during the first mile of a product launch for a startup.
Entrepreneurship overall and product launches, in particular, are riddled with unknown unknowns a term used by Donald Rumsfeld and later adopted by the industry to specify the lack of knowledge of things we don’t know about. There are a lot of variables that come into play when you venture out on your own on an entrepreneurial journey, variables you couldn’t possibly think about. Strategic management of these variables and uncertainty is the key to overcoming these difficulties.
The author lays out a framework “DEFT” (Document, Evaluate, Focus & Test) to evaluate an ideas strength. The book contains hard-won lessons learned on the field enabling entrepreneurs to walk through the unknown territory known as Startup.
There are two parts to the book the first part is titled “The First Mile Toolkit” which contains chapters for each of the aforementioned items in DEFT. The second part comparatively is less in content and is titled “Overcoming The First Mile Challenges”.
Document is the first phase of the process, here you write down exactly what you plan to do. Any innovation according to the author must share these 3 characteristics
- It must address a legitimate market
- It should address the need reliably
- The solution should create value and should be measurable by the people for whom the solution is designed for.
Then you are given a list of 27 questions that try to ask hard questions about Target customers, key stakeholders, the idea itself, economics, commercialization path, operations, team, and financing. We highly recommend you go through all the questions and think long and hard about all of them. All the questions are thought provoking and try to address the usually hidden problems the entrepreneurs might miss out on.
A concept of an idea resume is presented in the book which we find very powerful in analyzing any idea. The concept is very simple you just build a one-page resume of an idea and then this idea can be tossed around and discussed with your peers. The template for the idea resume can be downloaded from the official book page here.
Apart from that, there are four watch outs that the author recommends to be careful about. These are
- Confusing a concept with business
- Focusing on the beginning and end only.
- Looking from the perspective of a single set of stakeholders.
- Getting head but not the heart.
Evaluate is the most strategic & important phase where the magic of evaluating your idea happens. There are three categories of evaluations presented in the book
- Pattern-based qualitative analysis to highlight strategic uncertainties where the market needs a compelling solution to the problem, an attractive economic model with a clear foothold market and even the team. Another takeaway from the text is “Many VCs will tell you that will prefer a B idea with an A team over an A idea with a B team”, which shows how much the team matters.
- Financial analysis is to zero in on the business model and operational uncertainties. You ask questions like how precisely will the money be made, what will unit transaction costs be? overheads etc. There are four ways in which a financial analysis can be conducted: By calculating 4Ps(target Population, Purchase frequency, planned Pricing & required penetration), by creating a 2 variable spot sensitivity table which basically zeros in on 2 critical variables in the economic model, by building a reverse income statement & by constructing a simulation.
- Role-playing to identify weak links.
Focus is where you focus on strategic uncertainties that have the most potential to derail the startup venture altogether or will serve as the backbone of the proposed business. There are different types of uncertainties you need to list them evaluate them and prioritize them according to the impact they would have on the business. It is better that instead of a list a visual depiction is created so its easier to understand and share it with the team. Mind mapping tools or your own custom diagrams can be used to present them and their relationships with the other uncertainties. A simple 2 by 2 chart should be used to address important uncertainties involving basically these 2 questions
- How confident are you in a given area?
- How much impact would it have if you are wrong?
We as humans underestimate risks and overestimate our ability to control events and completely ignore the Black Swan events. Speaking of Black Swans there is an interesting book by Nassim Nicolas Taleb a Lebanese American scholar, statistician, ex-trader and risk analyst who discusses the probabilistic anomalies known as black swans by using concepts such as Mediocristan and Extremistan the book is a fun read and can be bought from here.
The further you go from your core business the less you know and more uncertain you are. But sometimes false confidence can be a blessing in disguise. If most people knew what they are getting into by venturing into the entrepreneurial journey most of them would not step into it. You need to pay particular attention to the uncertainties that are deal killers and are path dependencies.
Test, Learn & Adjust is the stage where you need to test the idea learn from your failures and successes and then pivot or adjust your path from the data you have. In order to test learn and adjust well, you need to follow these 6 footsteps.
- You need to your team small and focused.
- You need to design your tests carefully.
- You should learn in the market.
- You should maximize flexibility.
- You should savor surprised &
- You should take actions based on the learning.
There is an experiment cookbook chapter which lists and discusses the experiments that you can conduct.
The part 2 of the book discusses the first mile challenges and ways to overcome them.
The four challenges listed in the book are
- Making a wrong turn.
- Running out of fuel(cash).
- Using the wrong driver (business leader). [the case of John Sculley comes to mind, the Pepsi Co. CEO hired by Steve Jobs to run Apple Inc. which turned out to be a disaster and ultimately led to the ouster of Steve Jobs from Apple]
- Spinout (scaling prematurely)
And addresses ways in which these challenges can be handled.
And then there is a chapter of Systems to Support Strategic Experimentation that discusses the systems that should be put in place that reward experimentation, learning and should not despise failure.
The last chapter is on Leadership and how the leaders of the modern world need to think & work.
Overall the book is around 200 hundred pages but it makes you think just about the right things in the right places. It provides a plethora of real-world examples and suggests the best takeaways. We highly recommend this book to entrepreneurs, appreneurs and startups.
The book can be bought from here.