Launching a new product is hard — whether you're trying to launch a new startup, or you're working on a new product in the context of a larger company.
It’s tempting to think that new products are the result of straight-line innovation — that is, someone gets an idea, builds it, and then finds success (or failure). In practice, the vast majority of successful products are the result of a longer process of trial and error under conditions of some uncertainty.
This is fancy way of saying that the people involved were often groping their way in the dark. Or, to use our core analogy: perhaps they were finding their way in a maze.
It is equally tempting to say that the creation of a successful new product is a matter of luck: some people iterate and find failure; others iterate and find success. Indeed, many stories of product success involve a large number of variables going just right — often found by the product being in the right place at the right time.
The question, of course, is how to think about this seemingly random process.
One of the more useful ideas to have come out of Silicon Valley is that good founders don’t have an idea — instead, they have a ‘bird’s-eye view of the Idea Maze.’
What is the Idea Maze? In a sentence: the Idea Maze is the process of exploration required to nail down all the components of a successful product. The concept takes into account the uncertain, iterative nature of new product development, and the fact that a number of things have to go just right for the new product to succeed. It also suggests that good founders know which parts of the maze to focus on, and which parts have already been explored by others and should perhaps be avoided.
The idea comes from Silicon Valley investor and entrepreneur Balaji Srinivasan, who writes:
Most of the time, end-users only see the solid path through the maze taken by one company. They don’t see the paths not taken by that company, and certainly don’t think much about all the dead companies that fell into various pits before reaching the customer. (emphasis added)
The maze is a reasonably good analogy. Sometimes there are pits you just can’t cross. Sometimes you can get past a particular minotaur/enter a new market, but only after you’ve gained treasure in another area of the maze (Google going after email after it made money in search). Sometimes the maze itself shifts over time, and new doors open as technologies arrive (Pandora on the iPhone). Sometimes there are pits that are uncrossable for you, but are crossable by another (Webvan failed, but Amazon, Walmart, and Safeway have the distribution muscle to succeed). And sometimes there are pitfalls that are only apparent when one company has reached scale, problems which require entering the maze at the very beginning with a new weapon (e.g. Google’s Pagerank was inspired in part by Alta Vista’s problems at scale, problems that were not apparent in 1991).
A good founder is thus capable of anticipating which turns lead to treasure and which lead to certain death. A bad founder is just running to the entrance of (say) the “movies/music/filesharing/P2P” maze or the “photosharing” maze without any sense for the history of the industry, the players in the maze, the casualties of the past, and the technologies that are likely to move walls and change assumptions. (emphasis added)
Investor and entrepreneur Chris Dixon took Srinivasan’s original idea and extended it:
Good startup ideas are well developed, multi-year plans that contemplate many possible paths according to how the world changes. (...) Imagine, for example, that you were thinking of starting Netflix back when it was founded in 1997. How would content providers, distribution channels, and competitors respond? How soon would technology develop to open a hidden door and let you distribute online instead of by mail? Or consider Dropbox in 2007. Dozens of cloud storage companies had been started before. What mistakes had they made? How would incumbents like Amazon and Google respond? How would new platforms like mobile affect you?
The general concept should, of course, be familiar to anyone who has attempted to build a new product before. Scratch the surface of any story about new product development and you'll find a circuitous journey to find a product that works, with a distribution channel that is well-adapted for it, sold to an audience ready to receive it. Sometimes the team is smart enough to iterate towards a product that works. Other times, new products are saved by the world changing around them, enabling (unlikely) success. This uncertain journey of discovery is what 'navigating the idea maze' means.
The following series of cases should demonstrate what that looks like in practice.