how to thrive in an era of constant change
TRANSCRIPT
HowtoThriveinanEraofConstantChange
OscarCastroPrincipal
CreareVentures,LLC
Presented:September28,2016atRetail’sDigitalSummit
MikeWardCEO
ThriLBooks
Inthissessionyouwilllearn:
§ Innovateatanysizecompany§ ApproachinnovaRonwithagoal-focusedmentality§ Getstartedwithhands-on,tacRcalRps
Introduc3on
§ OscarCastro§ @Sears&Kmartfrom2006-14§ LedOmnichannel&InternaRonalecommerce§ JoinedBigLotsin2014§ Ledthelaunchononlinebusinessin‘16§ FoundedCreareVentures,focusedonearly
stagedigitalinvestments
Whatisinnova3on?
or
Typesofinnova3on
• TweaksorenhancementstoexisRngbusinessorproduct
IncrementalInnovaRon
• Fundamental,radicalchangeDisrupRveInnovaRon
Organiza3onalHonesty
§ ClearalignmentonappeRte§ Whattype(s)willthe
organizaRonsupport§ Gaugecommitmentlevel§ Bewaretheimmunesystem
TakeaPor@olioView
§ ResourceallocaRon§ Howwilleachbesupported§ Skillsets&requirements:
matchforsuccess
EmbraceInnova3onPrinciples
FailFast
• ThinkMVP(MinimumViableProduct)1
• Befirsttolearn1
FailSmall
• Conserveyourammoforsuccess2
• Anythingbeyondrequiredlearningiswaste1
RethinkFailure
• FailureofonehypothesisoLenrevealsadifferentopportunity
RemainCommiced
• Don’tfalteraLerfirstchallenge–therewillbefailure
RemainDisciplined
• Don’tover-invest;knowwhentocutlosses
1) TheLeanStartup–EricRies2) TheInnovator’sDilemma–C.M.Christensen
RethinkGovernance
GoalPlanning
• Learningplans&milestones1,2• NOTassignedtargets(rev,profit)
OrgStructure
• SmallopportuniRes=>smallteams2• Leveragesmallness&independence2
Processes
• InsulatefromexisRngprocesses• Createsomeindependence
1) TheLeanStartup–EricRies2) TheInnovator’sDilemma–C.M.Christensen
Torecapontoday’stakeaways…
§ UnderstanddifferentinnovaRontypes§ Behonestwithyourselves§ Planyourporjolio§ EstablishaninnovaRonculture§ Preparetomanagedifferently
Resources
Introduc3on
§ MikeWard§ Joinedin2007asCIO§ Developer/Technologist§ TookoverasCEO/Presidentin2013§ Focusedongrowthandtechnologyasa
sourceofinnovaRon
ThriLBooks–Milestones• Startedin2003andoperatedfromastorageunitinKirkland
– 2founderswouldhanddeliverbookstothepostofficeintheevenings
• In2007weopenedoursecondwarehouse– Rapidgrowthforthenext6years
• Todaywearethelargestusedbooksellerintheworld– Over$95Minrevenue– Over700employeesin11states– Over15Mbooksshippedinthelast12months– OurtotalDevandMarkeRngTeamissRlllessthan20peopletoday
DisrupRvevsIncremental• Video–Indycar1950vs2013• DisrupRveinnovaRonisrare–itmaybeamyth• GivenenoughRme,allincrementalinnovaRonstartstolooklikedisrupRveinnovaRon
• Youdon’thave63years
RobotWars
DynamicPricing• Challenges/ConsideraRons
– Neededtorebuildoursystem
– Nobotwars– Notallbooksarecreated
equal– Marketmovesquickly– Needtobalancespeed
withconsistencytocustomer
– Hadtobereallyfast:fromdaystominutes
Innova3onLabs
InnovaRonlabs• Somepublicsectorlabs • Somenotableclosures
Top4InnovaRonPrinciples
• SenseofMission• TrustandAutonomy• RiskTakingandToleranceofFailure• Process/System–youneedone!
SummaryoftheinnovaRonprinciplesthatthebiglabsallshare:
Principles• SenseofMission
– Convertproblemstoideas– ThinkBig,10X(Google)– Putadentintheuniverse(SteveJobs)– Dowhatyoulove(SteveJobs)– Focusoncustomer– Remaincommiced
• TrustandAutonomy– ActSmall– Formgroups– TrustManagement,TrustEachOther
• RiskTakingandToleranceofFailure– ShipoLen– IterateoLen– Failwell,failfast,failsmall
• Process/System–youneedone!– LimitedTenure(DARPA)– Greenlight/Redlight– SmallgroupsarethemostproducRve– Masterthemessage(HeilmeierCatechism)– Feedbackloopandshortdeadlines– Remaindisciplined
AdvantagesforSMB• InnovaRonisnotisolated–onlyaselectfewauthorizedtoinnovate?• Alreadytherightsize• Directaccesstocustomers
– MostofyourtesRngwillbeintherealworld
• Culturebecomesshared– NoDilbertpoliRcs
• ROIismeasureddirectlyandquickly
ThriLBooks’Approach• Withtheseprinciplesinhandwedovein
– MulRdepartmental• ExecuRvebuy-inthroughacendance• Namedtheteam:PricingCommicee
– WelldefinedobjecRve– Definedeadlines
• AllowformulRplequickiteraRons
– CommunicaRonStrategy• DependingonyourcultureyoumayneedtodefinegroundrulesofcommunicaRon
– Commiceecanbeextended…ornot• Weplannedfor2iteraRons,withanopRonstop,reform,orconRnue
PricingCommicee• Method
– Writedownagoal• Breakgoalintosubgoals
(speed,accuracy,framework)– Meettwiceamonth– Discussresults
• ConRnueorstop– CreaRvebrainstorming– QueueupaddiRonaltests– Modifypricingframework
wheninsufficientforanenvisionedtest
“Accuratelysetthepriceofeverybookatleastonceaday”
DynamicPricing-results
• Result– Whatusedtotakedaysnow
takeslessthan15minutes– Theabilitytomake10sof
millionsofpricechangesaday
– AdapRvetoarangeofmarketcondiRons
– Self-correcRngbymodelingcustomerbehavioracrossmorethan7MRtles
Takeaways• Fourprinciples:Mission,
Autonomy,RiskTolerance,Process
• Begintoday–mostdisrupRveinnovaRonisreallyincrementalinnovaRonindisguise
“Mostpeopleoveres9matewhattheycandoinaday,andunderes9matewhattheycandoinamonth.Weoveres9matewhatwecandoinayear,andunderes9matewhatwecanaccomplishinadecade.”-MachewKelly(orBillGatesaccordingtointernetlegend)
Credits• hcps://www.youtube.com/watch?v=RRy_73ivcms• hcp://www.darpa.mil/acachments/
DARPA_InnovaRon_2016.pdf
