Damjan Obal, formerly an enthusiastic entrepreneur, today employed in Cisco in Norway, was a guest at the Innovation Jam Start:up Mariborand held an interesting discussion on what is crucial when developing a new product. However, he also revealed why he thinks that it's easier and more effective today to innovate inside big companies and not as much in startups.
Damjan Obal: "It's very important to measure until the end and to know where we're going. Product teams might forget this."
What is the main difference between product design in startups and bigger companies?
"There's not a big difference, it's only that in startups, the product is what you actually show on the stage, while in bigger companies it's only one part of the entire machine, there is not that much emphasis on the product. There is a bigger team behind it and the product is what you show. If we're talking about a chair with three legs, the product is one of the three legs, the second one is business, the third is IT … In startups, the product design is the secret recipe sauce that you show. A bit different, but very similar in principle."
What do companies most often forget when they're transforming their idea into the final product?
"I think that they most often forget to validate, that is check whether that's it, but I think that there is less of that now than there used to be. Once they come to success, they forget to measure, track further. And once the first iteration that's good enough brings some money, they stop or move on to the next thing, and the main problem is that they don't know what's good because they don't measure until the end. It's very important to measure until the end and know where we're going. Product teams might forget that."
Five smaller iterations can be a true innovation
The startup community can use digital prototyping to show the traditional industry how you can be more agile, up-to-date. Is that a suitable approach?
"The change lately is that real innovation happens more easily inside bigger environments, not only because of the most obvious thing, namely a bigger budget, because big companies also have many more limitations. On the other hand, they have knowledge, a support ecosystem, and if you know how to activate it, it's easier and more effective to innovate inside big companies. What we talked about at Innovation Jam is that you don't move on to the next massive innovation but rather have five smaller iterations as the goal, and that's then the real innovation. That is actually the advantage of slightly bigger companies, while startups need to chase that hockey stick line and consequently move more aggressively into a new thing, but they're forgetting about their core values."
Is the innovativeness of startups then lost, in a way?
"You need to have a frame in order to go outside it. bigger companies have this frame, they know what they're working with, and then it's easier for them to be innovative within this. Meanwhile startups often think completely differently, which is great, but they can then get lost because they don't know anymore where exactly they belong, who their real partner is now … and that's why they return to SWOT analysis over and over again, checking if they really are where they think they are. Meanwhile bigger companies, in principle, know where they are, they have a strategy."
No more mean companies that buy startups to shut them down
But with this, the startups, which aren't as revolutionary as they used to be, and traditional companies, which recognize this potential and take it under their wings in a way, are getting quite close?
"I think that this is a healthy relationship. I'm very happy when I see that this is happening. That there are no longer two separate poles. For a long time, startups competed against corporations. Corporations were mean and bought startups only to close them. I think we've overcome that, which I think is right, and there are more and more target incubators that have set the frame for startups again. And I think we will be increasingly closer instead of further apart."
So, will startups' wings be more clipped in the future?
"Maybe, I don't know. It's a good question but I don't know the answer to it. Currently I think that big companies are in a better position. Now they buy smaller startups earlier, there are even more spin-off companies, they think a bit differently. They're trying to keep this staff, they even let some of the staff leave the company and return, they even encourage it. So, a lot has changed in the mentality of big companies as well."