In his 2011 book, Great by Choice, Jim Collins introduced the concept of “Fire Bullets, Then Cannonballs”. Create a low-cost, low-risk product or service launch (a bullet) and measure its success. If the bullet came close to the target (good consumer appeal, more profitable, potential to capture more share), recalibrate (refine the offering, improve the delivery, hone the messaging) and fire again. In the course of this iterative process, when the bullet hits the bullseye (confirmed by data), invest in the proven offering and craft a fully developed product or service paired with a strong launch (a cannonball).
It’s easy for a person or an organization to become enamored with an unproven “cannonball” that’s going to propel the organization to the front of their industry (or create a new industry) and cause their revenue and profits to soar. We love the idea and our ego convinces us that we’ve found a unicorn. To be sure, those cannonballs are out there, but, compared to the number of companies and product launches, those products or services are, as they say, scarcer than hen’s teeth. Plenty of companies have lost money (and investor’s money) by shooting unproven cannonballs from the beginning without any evidence they would find the bullseye. For most of us mortals, the path to sustained competitive advantage is bullets first, then cannonballs.
In this week’s One Year, Thirty Minute Challenge, I want you to spend your exercise identifying opportunities in your organization where you can craft some bullets. Take these six “bullet starters”, get your team together and take a virtual walk through your organization. See how many bullet opportunities you can identify.
Create a Pilot Product from Scratch – Over the last few years, software companies have taught us the value of creating a Minimum Viable Product (MVP). For example, early versions of Gmail, Evernote and Google Docs had only a fraction of the features they have now. That’s because the purpose of the early versions was to gauge interest and commercial viability. When it became clear that the products had potential, only then was more development effort expended to make a full-featured product (and the development goes on today). Can you create a minimum viable product to explore a new market or a new segment within an existing market?
Change the Customer Experience – Could you increase conversion rates for new customers, increase retention rates for existing customers or streamline internal operations by changing the customer experience? Maybe you could deliver food to tables instead of calling a number or change the automated call routing on your phone system, making it easier for a customer to talk to a live person. Make small, measurable changes and survey customers to get their feedback, plus track the financial impact. If customers respond favorably continue to tweak the customer experience until customers experience function, form and feeling when interacting with your organization.
Create a Stripped-Down Version of an Existing Product – One of the things we hopefully learned from the coronavirus was the ability to pivot. If our successful, three-day, onsite training program wasn’t an option, what do we do to make money? Strip out one of the topics from one of the days and create a webinar. It sells for a fraction of the price and customers can consume it from their home. Look for the opportunity to deconstruct an existing product or service and sell a stripped-down or fractional version. You might find that smaller micro-offerings are more profitable and have the added advantage of opening the door for larger sales later.
Create Another Product from an Existing Product – Many years ago, back when I had a corporate job, one of the smartest things I ever saw my former employer do was take something worthless and make it into something valuable. In their heyday, newspapers accumulated thousands of pictures each year. Only a small fraction of those ever made it into the newspaper. So, what do you do with all those unused pictures? My former employer made them into coffee table books. They identified several themes – architecture, sports, signs – just to name a few, and, combing through decades of pictures, put together fascinating collections of photos in very cool coffee table books. So, what assets do you have that you could recompile into a new product or service?
Develop a Strategic Partnership – If you run a service company – let’s say an exterminator, could you begin to offer wildlife removal services to your customers by partnering with an existing wildlife removal service? This type of relationship allows you to “stick your toe in the water” with very little downside risk. If the test goes well, you might consider a merger or acquisition, or you might add that expertise to your staff and expand your service offerings?
Tap the Collective Genius of your Team – For years, 3M operated with the “30% Rule” – 30% of revenue had to come from products created in the last 4 years. To fuel that initiative, 3M authorized 15% time – 15% of your work week can be devoted to projects that are interesting to you, not mandated by your boss. Post-It Notes and light-recycling lens (a $100 million product) came from 15% time. Google, for a while, crafted their own version (in their case 20% time). Gmail, AdSense, Google Maps and Google Talk were born from 20% time. I’m not saying you need to give employees a day a week to do what is interesting to them, but I am saying there are ideas ruminating in the minds of your employees. You need to create a mechanism to get them out. Fund some pilot projects that come from employees. You might find a future cannonball.
Here’s a quick bullet primer as you begin your exercise –
- Use speed as a differentiator – Make a product variation where the price is cheaper but delivery is slower or make a product variation where the price is higher and delivery is faster.
- Use geography – Limit the reach of your bullet. If you’re going to start delivery, do it in a small radius. If you’re going to introduce a new product, only offer it in one of your locations.
- Remove risk – Use a freemium/premium model – a stripped down version for free, a version with more features for a fee.
- Build testing into the bullet launch – Take advantage of A/B testing. You can keep an existing product or customer experience for a control group, then offer your “bullet” offering in another group. Or you can make a couple of similar bullet products (or messaging options) and launch them together. Track them side-by-side. If your bullet offering is sold online, there are dozens of tools that will facilitate this.
Select two or three bullet opportunities from your list, recruit a project sponsor from your team for each of the bullet opportunities, create the bullets and launch them. Measure demand and solicit feedback. Be brave enough to kill the bullets that are too far from the bullseye, then be relentless iteratively honing and relaunching those that show promise – eventually crafting cannonballs.