How a media holding to launch 12 successful startups per year
Suppose that a media holding company decided to create a business incubator to create start-ups and expand its market at the expense of the existing audience on the holding's media resources. For example, by placing advertisements of their new resources on related subjects or information products on sites not bought by advertisers.
In such a situation, a holding can quite clearly represent the audience of resources, its segmentation, interests, sources of the audience and, possibly, have the results of a rather in-depth analysis of its most targeted segments. If there is none, or the depth of understanding of the audience is insufficient, then the competences are enough either to study the issue on their own, or to attract professional marketers and set the research task for them.
On the other hand, the online media holding company deliberately has a stable development department. We will not make assumptions about the quality of this department, the streamlined processes and the qualifications of the developers because the cases are different. The only thing we will assume about the development department is that it fully copes with the support of existing resources. Moreover, the phase of active growth due to the development has been completed some time ago - otherwise the development task through the media startups created for the holding is irrelevant.
In other words, we consider a stable organization that possesses deep competences in terms of marketing, some competences in supporting existing media resources on the Internet and financial resources, either own or borrowed. And she wants to resume active growth due to growth on new, possibly adjacent to the main profile, directions.
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Such a media holding would be wise to create a dedicated unit of several small, 3-4 people, risk development groups. Each such group could consist of an Internet marketer with deep Internet analyst skills, a designer-designer with good frontend developer skills and a backend developer with server and database administration skills. This business trio is minimal and, at the same time, very effective in terms of internal communication by the development team. Its distinguishing feature should be the speed of conducting experiments on the flow of visitors and testing various hypotheses.
The head of 3-4 such groups makes sense to put an experienced person who can explain to business which of the business ideas of startups should be tested first of all, which can help teams to conduct more experiments, have the courage to quickly give up bad ideas and find out the implicit potential of a bad start. project. The ability to assemble such teams, maintain their spirit and help them to endure constant failures must also be his strong competences.
Dips. There will be failures. A startup is a startup that the most likely result of its launch is failure. So in honest start-up business plans it should be written: “we have just started, so with a 95% probability you will lose the invested money” - and this will be an optimistic estimate.
On the other hand, the media holding company has extremely valuable competencies that allow radically reducing risks. First, this is an understanding of the audience, or at least the target segments. Secondly, it is not just smart money, but smart money with a deep understanding of the market. Thirdly, the technical competence of the existing holding development department is enough for maintenance and the gradual development of existing sites, which means that technical risks are not high either. These three competencies make it possible, with the proper skill of the incubator manager for start-ups, to bring the risk to 70-80 percent for the year, that is, to be successful at the level of one of 3-5 projects with growth to the level of 10 projects from 25-30 projects. Below we will see how many successful projects this year are and how to minimize losses from failures.
It makes sense to build the business process of the incubator as follows. At the entrance to organize sorted by priority register of business ideas. For each idea, you should indicate the main business case, a description of the target audience, potential profit, targets for assessing the success of a startup, a certain integral assessment of the project's attractiveness and a seasonality window for optimal launch. A regular list of ideas that were sorted according to current priorities — project charters and expected KPIs at different stages of idea testing.
The teams take ideas from the list in turn, check the market, check the assumptions about the potential product, develop the minimum product, check the performance of this product for this market, optimize it for the market and transfer the successful product to the already existing development department for a more relaxed development of the proven product proven market. After which the cycle is repeated for the next idea.
At each stage of the cycle, it is necessary to check the need to fix losses: either because the idea is initially bad, or the potential is good, but there is no market for it yet , or creating a product is problematic for some reason, or the proven size of the market is not interesting for the media holding. At the initial study of each idea, KPIs should be determined in advance, which allow at each stage to decide on the termination of works or their continuation. Such termination or continuation of work should not be automatic, but should be made at the investment committee. The investment committee will protect a good idea with bad temporal indicators and stop working on the project with a random surge of indicators on the day of the decision.
Early loss fixing allows the team to increase the number of successfully implemented projects per year. A team can work out only one successful idea per year with one of four successful ideas, a cycle from launching ideas into work to optimizing the MVP for a market of 3 months and deciding the fate of the project at the end of the cycle. Moreover, if bad ideas are rejected on average for 1 month, this will allow, firstly, to launch 2 successful ideas per team per year, and secondly, to get the competence to quickly screen out bad ideas in the first weeks of launching ideas into work .
In fact, 3 months for a minimum viable product within such a development is quite a lot. The development time will be reduced both due to the development of the decision teams and the development of skills to reduce the amount of the minimum sufficient functionality. Many developers and owners of products are surprised to understand how minimalist a product designed for testing ideas can be without inflicting reputational damage to a business.
Target indicators by the end of the first year are: the average time of rejection of an unsuitable idea at the level of 3 weeks, the average development time of the minimum viable product is about 2 months and the success rate of the idea taken from the pool to work and not rejected from the threshold of 30-40%. That is, approximately 3-3.5 successful start-up projects per year per team, taking into account 4 weeks of vacations. Considering that the traffic for experiments is considered free - it comes from non-bought advertising space - the investment efficiency is at least 3-3.5 times higher than the original scheme, even with a 25% overestimated success rate.
4 teams will maintain the speed of 12-15 successful startups per year. The basic competence of the team for this is the speed of experimental separation of successful business ideas from unsuccessful ones.
In such a situation, a holding can quite clearly represent the audience of resources, its segmentation, interests, sources of the audience and, possibly, have the results of a rather in-depth analysis of its most targeted segments. If there is none, or the depth of understanding of the audience is insufficient, then the competences are enough either to study the issue on their own, or to attract professional marketers and set the research task for them.
On the other hand, the online media holding company deliberately has a stable development department. We will not make assumptions about the quality of this department, the streamlined processes and the qualifications of the developers because the cases are different. The only thing we will assume about the development department is that it fully copes with the support of existing resources. Moreover, the phase of active growth due to the development has been completed some time ago - otherwise the development task through the media startups created for the holding is irrelevant.
In other words, we consider a stable organization that possesses deep competences in terms of marketing, some competences in supporting existing media resources on the Internet and financial resources, either own or borrowed. And she wants to resume active growth due to growth on new, possibly adjacent to the main profile, directions.
')
Such a media holding would be wise to create a dedicated unit of several small, 3-4 people, risk development groups. Each such group could consist of an Internet marketer with deep Internet analyst skills, a designer-designer with good frontend developer skills and a backend developer with server and database administration skills. This business trio is minimal and, at the same time, very effective in terms of internal communication by the development team. Its distinguishing feature should be the speed of conducting experiments on the flow of visitors and testing various hypotheses.
The head of 3-4 such groups makes sense to put an experienced person who can explain to business which of the business ideas of startups should be tested first of all, which can help teams to conduct more experiments, have the courage to quickly give up bad ideas and find out the implicit potential of a bad start. project. The ability to assemble such teams, maintain their spirit and help them to endure constant failures must also be his strong competences.
Dips. There will be failures. A startup is a startup that the most likely result of its launch is failure. So in honest start-up business plans it should be written: “we have just started, so with a 95% probability you will lose the invested money” - and this will be an optimistic estimate.
On the other hand, the media holding company has extremely valuable competencies that allow radically reducing risks. First, this is an understanding of the audience, or at least the target segments. Secondly, it is not just smart money, but smart money with a deep understanding of the market. Thirdly, the technical competence of the existing holding development department is enough for maintenance and the gradual development of existing sites, which means that technical risks are not high either. These three competencies make it possible, with the proper skill of the incubator manager for start-ups, to bring the risk to 70-80 percent for the year, that is, to be successful at the level of one of 3-5 projects with growth to the level of 10 projects from 25-30 projects. Below we will see how many successful projects this year are and how to minimize losses from failures.
It makes sense to build the business process of the incubator as follows. At the entrance to organize sorted by priority register of business ideas. For each idea, you should indicate the main business case, a description of the target audience, potential profit, targets for assessing the success of a startup, a certain integral assessment of the project's attractiveness and a seasonality window for optimal launch. A regular list of ideas that were sorted according to current priorities — project charters and expected KPIs at different stages of idea testing.
The teams take ideas from the list in turn, check the market, check the assumptions about the potential product, develop the minimum product, check the performance of this product for this market, optimize it for the market and transfer the successful product to the already existing development department for a more relaxed development of the proven product proven market. After which the cycle is repeated for the next idea.
At each stage of the cycle, it is necessary to check the need to fix losses: either because the idea is initially bad, or the potential is good, but there is no market for it yet , or creating a product is problematic for some reason, or the proven size of the market is not interesting for the media holding. At the initial study of each idea, KPIs should be determined in advance, which allow at each stage to decide on the termination of works or their continuation. Such termination or continuation of work should not be automatic, but should be made at the investment committee. The investment committee will protect a good idea with bad temporal indicators and stop working on the project with a random surge of indicators on the day of the decision.
Early loss fixing allows the team to increase the number of successfully implemented projects per year. A team can work out only one successful idea per year with one of four successful ideas, a cycle from launching ideas into work to optimizing the MVP for a market of 3 months and deciding the fate of the project at the end of the cycle. Moreover, if bad ideas are rejected on average for 1 month, this will allow, firstly, to launch 2 successful ideas per team per year, and secondly, to get the competence to quickly screen out bad ideas in the first weeks of launching ideas into work .
In fact, 3 months for a minimum viable product within such a development is quite a lot. The development time will be reduced both due to the development of the decision teams and the development of skills to reduce the amount of the minimum sufficient functionality. Many developers and owners of products are surprised to understand how minimalist a product designed for testing ideas can be without inflicting reputational damage to a business.
Target indicators by the end of the first year are: the average time of rejection of an unsuitable idea at the level of 3 weeks, the average development time of the minimum viable product is about 2 months and the success rate of the idea taken from the pool to work and not rejected from the threshold of 30-40%. That is, approximately 3-3.5 successful start-up projects per year per team, taking into account 4 weeks of vacations. Considering that the traffic for experiments is considered free - it comes from non-bought advertising space - the investment efficiency is at least 3-3.5 times higher than the original scheme, even with a 25% overestimated success rate.
4 teams will maintain the speed of 12-15 successful startups per year. The basic competence of the team for this is the speed of experimental separation of successful business ideas from unsuccessful ones.
Source: https://habr.com/ru/post/443364/
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