When Steve Blank wrote the book “The Four Steps to the Epiphany”, he brought a sea change in the way technology entrepreneurs do business. Rather than plow ahead with a technology-led process, most entrepreneurs have embraced “customer development”. Getting out of the building and doing primary market research has saved a great many startups from solving the wrong problems, and repeating the mistakes of projects like Google Glass.
You don’t know what you don’t know
When you are just getting started, the first thing to do is to admit that you don’t know what you don’t know. You have hypotheses about your target market and end users, but you don’t know if your intuition is right.
What you need to do at this stage is “problem research”. This is the phase in primary market research where you try to understand the problem. The technique that is central to the Lean Startup movement, MVP (minimum viable product) testing, is all about “solution research”, which I will cover in a separate post.
We hope you enjoy the latest installment of the MIT Sloan Experts Podcast series!
The third in our series of MIT Sloan Experts podcasts features Chris Knittel, professor of applied economics at MIT Sloan, talking about his latest research on racial bias in the ride-sharing industry.
Knittel’s research focuses on how Uber and Lyft are failing black passengers and what to do about it. Listen to this brief podcast and find out how Knittel came to his conclusions, what his findings say about drivers who cancel on customers with names that generally indicate they are a person of color, and what takeaways Uber and Lyft can garner from these findings to improve.
It’s true for everyone: despite our best intentions, we often fail to accomplish what we set out to do. When it comes to retirement investing, millions of Americans do not meet their own declared saving goals for retirement.
As a result, almost one-third of the U.S. population has no retirement savings at all,while many others will fall well short of what they will need for their Golden Years.
A solution can be found in the field of behavioral economics, which suggests ways tohelp Americans start saving. It seems that saving is a lot like dieting — small changes can help you reach your goal.
These studies show that when an automatic savings plan is introduced with an opt-out, 60% to 70% of employees remain in the plan. This may seem like a technical nuance, but there is a big difference between opting in by completing an application versus choosing not to opt out.
A plan designed to take advantage of this behavior is called an automatic IRA. In the same way that many people fail to start saving, those placed in an automatic IRA simply fail to stop saving by withdrawing from the plan. Automatic IRAs help people build their savings using the power of inertia.
During a half-hour interval on May 6, 2010, stock prices for some of the largest companies in the world dropped precipitously, some to just pennies a share. Then, just as suddenly and inexplicably, shares recovered to their pre-crash prices.
This unprecedented event, burned into the memories of investors and regulators alike, is now known as the Flash Crash. Since that day, financial markets have seen flash crashes in US Treasury securities, foreign currencies, and exchange-traded funds (ETFs). Other puzzling, system-wide glitches are becoming more frequent as well.
Without a doubt, our financial systems are complex and often unpredictable, and when they swing out of control they remind us how much we still have to learn about how they work and how inadequate our traditional methods of controlling them are.
It is widely understood that China needs to move from an investment-intensive growth model to one based on science, technology and innovation. But before I take up this subject, let me take a detour to tell a tale of two countries.
Both countries are small. One has a population of 5.5 million people; the other has a population of 8 million. In both countries, the dominant ethnic group is about 75 per cent of the population and minority groups make up the rest.
Both countries are rich. One country has a per capita gross domestic product of US$52,000 and the other country has a per capita GDP of US$35,000.
Both countries have faced existential security threats from the outside and armies in both countries have mandatory conscriptions. One country was actually kicked out and evicted by its now much larger neighbour, because the union would have threatened the political dominance of the main ethnic group. The second country is located in a region surrounded by hostile nations.