Understanding the Three Horizons of Growth — The romanticized version of innovation reads like Athena’s birth — created from an idea in Zeus’s mind, she sprang forth from his head fully armored and ready for battle. Sadly for the entrepreneur, reality never matches mythology. …

A personal embarrassment precipitated my appreciation for the three innovation types. I was presenting to a large industrial firm, explaining the latest Innovation Management trends and extolling their use throughout the firm. Concluding my (rather presumptive) presentation, a veteran product manager rebuked me, saying, “Look, it’s obvious you don’t know…

Measuring Product/Market Fit — The critical question any pre-growth innovator faces is: when do I step on the gas? Move too soon, and you blow your funding chasing traction that never comes, speeding headlong into the deadpool. …

The Innovation Options calculator is a simple tool to run an ROI analyses on your pre-growth initiatives. This post will explain how to use and read the tool; to learn more about the concepts and mathematics behind Innovation Options can do so here. Input We start with the four inputs we’ll…

Innovation Options measure the return on investment (ROI) of pre-growth initiatives based on the option value they provide to the firm. They are an effective alternative to traditional, cash-flow based approaches such as Net Present Value which fail under conditions of high market uncertainty. In this article, I’ll detail how…

Understanding how pre-growth investors should view their portfolios. Angels that invest in pre-growth startups essentially are considering this pitch from founders: “We have this idea that we think will grow. If we prove that, we’ll need a lot of money to grow it, but we’re not sure how to do…

A step-by-step guide to understanding financial options. Options are the right, but not the obligation, to purchase something at a predetermined price. In essence, an option delays an investment decision until we have more information about the market. …

How to Calculate ROI without Forecasting Revenue It starts innocently enough. An enterprising Product Manager comes up with an idea that represents a high-growth opportunity for the firm. He runs the proposal by Finance who naturally wants to see the ROI. The PM knows how much investment he needs, so the I is covered — but the…