Experimentation an Early Competitive Advantage for Startups

I have a stack of articles that I plan to read, for a while I carry them around in my backpack. Then the article finds a resting place in my office.  Fortunately, the articles get re-discovered and read: eventually.

I found an article on Enlightened Experimentation that had been sitting unread for a while – published in HBR in 2001. But the advice is still fresh more than a decade later.

Large industrial companies such as BMW use “Enlightened Experimentation” for product innovation and experimentation is fundamental to innovation.  The essentials to Enlightened Experimentation are: 1) Organize for rapid experimentation 2) Fail early and often, but avoid mistakes 3) Anticipate and exploit early information 4) Combine new and traditional technologies. 1

Though the concept works both for large corporations and small start-ups can apply the principles of Enlightened Experimentation even more effectively.

Early Thinking:

Experiment your way to competitive advantage: Especially for smaller or start-up firms, quick experimentation can be your earliest, maybe only competitive advantage.  You would think experimentation is natural to young firms, and it is with the best, but certainly not all.  As a new firm or start-up, you cannot outspend a larger well-financed rival.  And non-domestic rivals have other advantages.

Experimenters win: In a globalized market place, your competition may have lower labor cost, less regulation and advanced technology.  Experimentation generates new property knowledge.  Experimentation must expand beyond the R&D teams.  Experiment with product and business model innovation simultaneously.  You have to discover new opportunities before your competition know they exist.

Blink Analysis:

The article entitled “Why Steve Jobs Couldn’t Find A Job”  sums it up.  “Today, value goes to those who know how to create, store, manipulate and use information.  And success in this economy has a lot more to do with innovation, and the creation of entirely new products, industries and very different kinds of jobs.” 2

  1. S. Thomke, “Enlightened Experimentation: A new Imperative for Innovation” Harvard Business Review, February 2001: 66-75.
  2. A. Hartung, “Why Steve Jobs Couldn’t Find A Job” blogs.forbes.com/adamhartung, Web. February 18, 2011.

Related Links:

Treating Innovation as an Experiment