December 5, 2024
Harvard Business Review recently published an article co-authored by Doug Hannah, Assistant Professor of Management and Organizations, challenging the conventional wisdom of using prototypes early in the innovation process, particularly within complex ecosystems.
Hannah’s co-conducted study of five digital health ventures over six years revealed key lessons for success in such environments. First, it is crucial to avoid prototypes early in complex ecosystems to develop tailored, fully-fledged products after broad learning. The winning firms within the study pivoted from unviable customers, repurposed their investments, and adapted to ecosystem complexities, while others that avoided deep customer engagement struggled and wasted resources.
“Ecosystems are challenging because they introduce more actors and richer interdependencies. This makes it harder to execute, because there are more elements to get right. But this greater complexity also means that there are more ways to configure and reconfigure existing assets, like the big commitments made to early customers,” Hannah adds.
In complex digital ecosystems, success requires a deeper learning phase before prototyping, followed by significant investment in customer relationships and product development, in contrast to the conventional lean startup approach of rapid prototyping and iteration.
