5 Key Factors to a Successful Pilot

Last week, I wrote about the many things—testing a new product, exploring the potential for a working relationship, understanding your market better—that make corporations want to run pilots with startups.

This week, I want to go one step further and lay out some of key factors to actually running a successful pilot with a corporation. I’ve watched a bunch of different portfolio companies run them, and the best pilots all have these factors in common.

1. Find Your Champion

Quickly identify your champion within the organization and make sure they are along for every step of this ride. You want someone who’s experienced, open-minded, and cool under pressure; you’ll need that when roadblocks come up. Believe me, they come up.

Your champ also needs to be someone with the power and influence to keep the project moving forward. Maybe they’re a skilled navigator of your corporate culture. Maybe they know the key allies in your industry who can help grease the wheels. Regardless, this person should have the power needed to move things along throughout the process.  

2. Start with the End in Mind

That doesn’t always mean cash immediately changing hands. A pilot can be free, but make sure you have a defined time frame for how long it will be free. More importantly, make sure you have discussed your exit criteria and agreed upon eventual pricing before starting the free phase of the pilot. Especially when it comes to budgeting, setting prices early on allows your corporate partner to plan accordingly.

And don’t forget to plan for success too. If you have winning results, will you phase in the pilot in stages, or will you go for 100% implementation right off the bat? Setting these parameters early prevents a snap judgement down the line.

3. Define Learning Objectives

Never set up a pilot with a binary mindset of, If this works then the corporation will buy it. If it doesn’t then they won’t. This is a recipe for disaster. Instead, set up learning objectives for the pilot, and make sure they’re flexible enough to adapt to the situation once things get going on the ground. That way, if things don’t go as planned, you can learn, iterate, and, most importantly, continue piloting.

4. Track Every Metric Possible

Speaking of learning, measure as much as you can. If you don’t, you’re willingly ignoring the potential for new, maybe crucial insights about your business. In addition, share every valuable metric to enable your champions to sell internally.

You’ll be grateful you did later on when it comes time to prove your learnings. Feelings are great, but data is more persuasive and more translatable to new contexts—and hopefully deeper partnerships down the line.

5. Over-Communicate with Everyone

Even amongst all the data, don’t forget about the humans in your pilot. Weekly check-ins with your employees and partners let you do all kinds of things: get up-to-date info on how things are going; build trust and morale; and keep you nimble in the face of new challenges and opportunities. If possible, make as many of these check-ins in person. Jump on a plane, if needed, and make it happen!

Don’t forget to communicate back to your employees, mentors, and investors. That said, don’t oversell your pilot to investors. Corporations have all sorts of motivations for piloting, and until you have a signed, paid contract, a pilot doesn’t mean a lot.

In the end, be responsive to everything the customer asks for in real time. Remember that it is equally, if not more, important to sell your team’s ability to execute than your technology.  Showing your attentiveness and expertise is oftentimes the deciding factor.

Onwards!

—Ryan

Big thanks to Chris Smith, CEO of Kipsu, for helping contribute to this post. He definitely knows a thing or two about piloting and continues to impress with the successful pilots he’s pulled off at Kipsu. He can be reached at chris@kipsu.com for further comment.

 

 

What Actually Motivates a Corporation to Pilot with a Startup?

Working with a corporation can offer all kinds of opportunities to a startup. It lets you test new functions of your app, figure out implementation techniques, and, most importantly, learn from and build a lasting relationship with a potential partner.

I’ve watched this process first-hand at the Techstars Retail, where many of our startups have run successful pilots with major retailers. We kicked off our second class on July 17, and I’m watching our latest class set themselves up for potential pilot opportunities in the near future.

Sadly, many pilots end up failing, and I think one of the main reasons is startups do not clearly understand the motivations of their pilot partners.  

So, why would a corporation run a pilot with a startup?

  1. Learning – None of us knows everything, even in our own field of expertise. Pilots let corporations explore areas of strategic interest without betting the whole house on something new or unfamiliar.
  2. Testing – A pilot lets a corporation test your startup’s idea, and whether a potential partnership is actually feasible and worthwhile for it.
  3. Assessing Workflow – Few things derail a partnership faster than two systems that just don’t work well together. You want to be peanut butter and jelly, not peanut butter and…sushi. A pilot gives you a way to better understand the contours of a potential relationship without risking too much.
  4. Employee Motivations – While the corporation’s strategic motivations get you in the door, the motivations of the employees you’ll be working with are what ultimately get you the deal.  Always ask yourself, “Does the success of this pilot somehow influence your internal champions’ bonus?” If the answer is “yes,” you will have much higher engagement.  If the answer is “no,” you may not ultimately have a path forward with this company.
  5. Find Budget – Running a free or discounted pilot allows the testing to move forward while a corporation actually finds budget for a larger roll out. Sometimes this is just a matter of budget cycles, but it could also be budget reprioritization, which takes longer.
  6. Customers – In a B2B pilot, it’s ultimately your customer’s customers who will vicariously sustain your business—i.e., if your customers die, you die. A good pilot can teach corporations more about their customers, and whether your product helps serve them better. That’s the ultimate return on their investment in you.
  7. Iteration – In addition to thinking big picture, pilots also teach you what granular tweaks separate good ideas from great ones. In a pilot, you can experiment with what changes to a product bring the best results, and what trainings for employees supercharge adoption and boost impact.

Now that you (hopefully) understand the motivations behind piloting, how do you actually pull off a successful pilot? Check back soon as we lay out the key steps to actually implementing a successful pilot.

Onwards!
– Ryan

 

Techstars Retail with Target: Driving Innovation for Retail

I’m excited to announce that we’ve opened applications for the 2017 class of Techstars Retail in partnership with Target. You can apply online by going to www.techstars.com/apply. Applications are open through April 9th and the program starts in July.

Watch this video for a great overview of the program.

Recapping Last Year

In case you missed it, our first year of the Techstars Retail accelerator was a massive success. We had 11 startups from all over the world descend upon Minneapolis for the summer.  They received mentorship throughout the program from Target’s senior leadership, successful retail-tech entrepreneurs, and investors from across the country.

Our Demo Day was a blur but it was incredibly exciting to see almost 1,000 investors, mentors, Target team members, and supporters from all over the Twin Cities startup community show up and support our companies.

And wow — did they kill it! Here are some highlights of what was accomplished by our startups during the program:

  • Nexosis – Announced the company saved more than $90,000 in one location in a pilot with Pepsi this past summer and they are integrating into the Shopify e-commerce platform. They recently announced closing a $5M Series A round
  • Branch – Shared the results of their successful pilot program with Target stores and plans to move headquarters to Minneapolis. Branch is will soon announce the closing of their seed round.

Since our program has wrapped up, our companies have already collectively raised almost $15M, with another $5M to $10M coming soon. Stay tuned, as many more partnerships and deals are in the works to be announced this year.

What to expect in 2017

For 2017, we expect to once again find the top Retail Tech startups from around the world and welcome them to Minneapolis for the summer to our beautiful working space located, literally, within Target HQ.  

Have a disruptive retail technology startup?  We’d love to chat.  We’ll be visiting New York City, Cincinnati, Toronto, Waterloo, Minneapolis, Seattle, Portland, Miami, Austin, Washington DC, Boulder/Denver, San Francisco and Los Angeles to discuss our program. Simply send an email to ryan@techstars.com to coordinate.

All in all, it was an incredibly successful first program and we are already looking forward to the next! Apply here.