In the next few videos, we're going to talk about innovating inside the corporation. How do you take these things that you've learned how to do in week one, week two, and that we've started talking about for new products here, and apply them in the context of a big huge company so that it's an innovation machine? Even if you're not in a corporation now, you probably have partners that are in corporations, you might be part of their innovation program, or you might work for corporations someday. I also think there's some generally useful ideas here that have come out of this work on corporate innovation. It is super duper important. Corporations now more than ever, are focused on innovation. You can see this in the form of investments, in programs, and bold new product launches. Nobody wants to be the blockbuster video of somebody else's Netflix. They want to be their own Netflix. They don't want to get disrupted by streaming video, they want to take advantage of the disruption catalysts that are happening in their industry, and they want to capitalize on them. And they should, they should try to do that. Let's talk about how they focus. Because that's the most important part of your job, the product manager is bringing the right focus to these products, to these offerings. I really like this horizon of growth framework that these folks here came up with. The ideas that corporations have these three horizons. Horizon one, is the existing business. This is a mature business that has a well-established product market fit, it's making money, and your job as a product manager in H1 is to optimize for profitability and extending the life of your product. Projects have a time horizon of around 6 to 12 months. And they should be generating lots of cash for the corporation so that they can invest in innovation. Now, the next horizon is horizon two. And the relationship between these is, so let's take our cooped up LOC example. Their existing business would be selling these industrial chicken feeding and watering equipment to big factory farms through a re-seller channel, that's their technology, that's their business model. In H2, has either a new technology, or a new business model, but not both because that's an H3. So for example, with cooped up LOC, an example of an H2 would be that they take their existing technology and they have a new business model. Say a joint venture in China to sell into that market. These projects have a time frame of around one to three years. You think about it, takes a while to get one of these tooled up. As a product manager, you're kind of an interesting job here because you kind of need to straddle, optimizing and relatively predictive methods around the mature part of the business and innovation in the part of the business that's new. So for instance, how do we take the things that we know work well in the United States with our technology and market them with a new business model in China. It's a challenging job, you have to do a little bit of both. So that's what you're up against or that's what you're up for will say if you're a product manager in an H2. And in an H3, this is a new business model and new technology. In the case of cooped up, this would be their backyard chicken coop idea because that's a new technology that's going to work in a different context, probably in a different way. And it's a new business model, a direct to consumer offering, which is not, they sell through a channel right now. The key with the H3 here is to do the kind of things that you've been learning about in week one, week two and we've created, we've used these focal points, the four steps for example, here in week three. It's really challenging for corporations, it's hard. The key is disciplined experimentation, so not just doing whatever but disciplined experimentation but being ready to discard quickly the ideas that aren't going to work. You need to operate like a venture capitalists where you have an area of interest and you make a lot of little bets rather than, what corporations tend to do is create one big huge project that they just will not let fail no matter what. And that really works because innovation, the kind of failure in an innovation, I think it could be much higher if people do some of the things we were talking about in the course, but it is inherently, there are going to have winners and losers. So the key thing here is managing a disciplined portfolio. You can see that kind of the risk and the novelty profile of these increases, and the investment horizon gets bigger as we go up here. As a product manager, you may find that one or the other of these is kind of your favorite. You may love doing new stuff inside the corporation, you may love staying with the core business and optimizing and extending it and maybe you like loaning your expertise to these more longer time horizon things. It's a real challenge for the business because this is the business that's generating money, its the kind of thing that everybody knows, and it's really hard to have the discipline to put yourself as a corporation, and go up here and take big risks. In the next few videos, we're going to talk about ways to manage an innovation pipeline, so you're bringing in new ideas, you're vetting them appropriately especially if they're H3s, and then you're taking the winners so that you don't become the Blockbuster Video, you become your own Netflix and you're cycling back H3 businesses back down through these horizons and maturing them and growing them. That's what a healthy corporation, the corporation the future will do, and you're a big part of that as a product manager because you're the one's that's going to take these products through that pipeline.
