Why Startups Fail & Where Innovators Thrive with Brian Ardinger and Robyn Bolton

Inside Outside Innovation

On this week's episode of Inside Outside Innovation, Robyn and Brian talk about why startups fail, the best workplaces for innovators, and the digital detox on college campuses. Let's get started.

Inside Outside Innovation is the podcast to help innovation leaders navigate what's next. Each week, we'll give you a front row seat into what it takes to grow and thrive in a world of hyper uncertainty and accelerating change. Join me, Brian Ardinger, and Mile Zero's Robyn Bolton as we discuss the latest tools, tactics, and trends for creating innovations with Impact. Let's get started.

Podcast Interview Transcript with Brian Ardinger and Robyn Bolton

[00:00:40] Brian Ardinger: Welcome to another episode of Inside Outside Innovation. I'm your host, Brian Ardinger, and with me, I have our co-host, Robyn Bolton.

[00:00:46] Robyn Bolton: Thank you. Glad to be here as always.

[00:00:48] Brian Ardinger: We are excited to continue on giving our audience the best insights into what we're seeing.

[00:00:54] Robyn Bolton: Let's get to it.

[00:00:55] Brian Ardinger: The first article is an article I read in Wildfire Labs called Why Startups Fail Patterns From $2 billion In Startup Failures.

In the article, it talks about some of the research that shows that failure patterns are more consistent than success patterns or success formulas, which makes sense. There's a lot more ways to fail and probably a lot more consistent ways to fail than there are ways to win. The article talks about like, how can startups be more focused on understanding where failure points are? And then what can you do about it?

They had some research in there. CB Insights took a look at startup failures and revealed that 42% failed due to no market need. 29% ran out of cash and 23% had team issues. So I think everybody can relate to those particular common problems and, and not only in the startup realm, but also in the corporate innovation realms. With that, what was your first take on the article?

[00:01:48] Robyn Bolton: My first take was 42% failing because there's no market was like come on. Like step one is finding a problem that's worth solving. It should absolutely not be that high, but also knowing that people tend to fall in love with ideas and not problems, kind of not surprised.

[00:02:09] Brian Ardinger: It'd be interesting to see what that number is at the very beginning because actually might be higher than 42% because I think a lot of times we don't hear about the initial idea. Initial idea is probably closer to 90% and that's not right. Yes. When you first get off the ground and it's, you know, 42% by the first or second pivot.

Yes. I think that is a common issue. There's so many reasons why I've seen it manifest itself from the standpoint of like, again, you get somebody who's interested in a particular topic or they see something that bothers them and they start going off in a particular solution and don't necessarily realize that may be a problem, but it may be problem number 355 on the list of problems to solve. And therefore, you don't get market traction or enough immediate application to it to trying to solve that particular problems.

Doing things like customer discovery and making that a primary part of the first idea innovation efforts is probably a way to help mitigate that particular pitfall.

[00:03:03] Robyn Bolton: I always say it's the hill I will die on. Start with talking to your customers or your desired customers and actually listen. You know, ask them open-ended questions and listen. Because I think we also all fall back on like, do you like this idea? And no one's going to call the baby ugly. They know you spent time on it. So you have to ask open-ended questions.

And the other thing, and I've seen this come up more and more in conversations that I'm having with other folks in the innovation space, is this realization that a lot of the tools that we use, especially in corporate innovation, you know, business model canvas, lean startup, things like that are actually best used to develop an idea of once you already know that there's a problem. And in the rush that both entrepreneurs and corporate innovators have of like, oh my gosh, we need to like do something, get something out in the market.

We have all these tools that are proven that are great for getting things out into the market. We naturally gravitate to the canvases and to the frameworks that are like, this is how you go do stuff.

[00:04:06] Brian Ardinger: You can use those canvases in a way, even at the earliest stages, but you have to look at it from the standpoint of like, this is our best guess day one, and these are going to change, and as long as you're open to changing it. The reason why I do like those particular tool sets is that it is a little bit easier to change than, back in the day when you had to write a hundred page business plan and 65 Excel sheets to justify it. At least it's much easier to take a look at a business model and say, okay, I'm going to take that sticky note off because I talked to a customer and it's like idea wasn't exactly where it needs to be. So, we need to change the sticky note out and try something else or change the model in some way.

But I think a lot of people, again, they go through the. First canvas or the first iteration, and say, okay, this is the plan. We're going to execute the plan. Versus saying, this is a snapshot in time and our assumptions in time. How can we move this particular thing forward and make sure that the canvas maintains reality with what's going on in the marketplace?

[00:04:57] Robyn Bolton: Yeah, and I think the key is. Post-it notes on the canvas, don't write on the canvas.

[00:05:02] Brian Ardinger: Right.

[00:05:02] Robyn Bolton: Because then it feels permanent. Post-it notes.

[00:05:05] Brian Ardinger: The other thing, in this particular article, they talk about solution sets or things, and I encourage people to go take a look at Wildfire Labs. Talk about a clever way to think about the major ways and pitfalls that folks go through. It's fail, fit, acquisition economics, internal alignment, and liquidity planning.

And so, I thought we could talk a little bit about each of those particular ways to checklist, I guess to look at a particular idea. So obviously fit, we just talked a little bit about it, but you know, how do you evaluate the solution? Is it urgent customer need or is it a minor inconvenience in trying to understand that relativity and the fit of the problem.

But not only that, but I think fit to the people trying to solve that problem. And you've probably seen this in the corporate realm as well. You know, a lot of companies go shooting off towards the, the shiny object, whether or not it's a fit for their company or they're good at it or whatever.

[00:05:54] Robyn Bolton: So many companies when they start their innovation journey, so to speak. They're really hesitant to put any sort of constraints on the work. They're like, blue sky, do anything white space. And the reality is there's always constraints and those are actually really helpful.

Thinking about fit as ...