Why businesses need to be Beta to grow quicker and behave bolder

09 April 2018 Authored by Consultancy.uk

London-based consultancy Adaptive Lab is one of the UK’s fastest growing consultancies – the firm’s sales have doubled every year for the past four years, and the consulting firm is aiming to increase revenues by 40% this year. “We help our clients build products, services and Beta businesses – businesses that launch faster, grow quicker, and behave bolder,” says James Haycock, Founder and Managing Director of the 50-strong team. 

In your own words, what is a Beta Business?

Business leaders the world over are looking up and realising that their market context is undergoing exponential change. Keeping up and winning in these fast moving times requires businesses to reinvent themselves and to do so continuously. Doing this successfully requires both a new mindset and a new way of working. The old model of change just isn’t fit for the new world we’re operating in.

A Beta Business is one that has adopted the new model that we think is essential for survival. At the heart of this model is a very simple idea which is that experimentation is the key to unlocking growth. So, we describe a Beta Business as one that finds growth through experimentation. 

The idea of experimentation is one that has grown increasingly popular, inspired by the world’s most valuable companies – technology firms like Amazon and Facebook. They’ve designed themselves to be brilliant at experiments, whether at the whole business unit level or at a feature level. Experiments are about learning, and given how fast things are moving, a company’s ability to learn, and to learn faster than its competitors, will be what makes it fit for the future.

Many companies have made attempts to become more agile and lean but a Beta Business is about more than this. It understands that the broader internal environment needs to be supportive of these modern ways of working and reconsiders how it funds initiatives, governs them, and how it organises itself to let these new approaches flourish.

Adaptive Labs - We build beta businesses

Can you share a recent example of a Beta Business you’ve launched for a client? And one you’ve seen launched outside of your business that you admire?

Smarty is an example of a Beta Business we launched in partnership with Three, the mobile operator. They’re pursuing a specific customer segment and were keen to establish a modern culture and way of working. We’re also working on one for a financial services company that should be live in the coming months, although I can’t say more about that one right now. 

Pret is an interesting example of a company that applies this mindset. They launched the Pret Vegetarian concept as a trial near our studio in Shoreditch and now, having iterated the concept, they’re rolling it out more broadly. Within their shop they’re also applying the same approach by trying out new products and ideas regularly. 

Hive, the British Gas smart home business, might be another example. They’ve experimented with organisational structure – being both inside and outside of British Gas and are now sat within the Centrica Group. Monzo, the digital challenger bank, is another. They’ve been great at getting their product into the market faster than their competitors which has enabled them to learn quicker and build a better product as a result. 

You talk about working with companies to ‘launch faster, grow quicker, and behave bolder’ but in reality, how do you do you manage to achieve this in an often complex, process driven corporate world?

It’s tough as you might imagine. We’d actually reframe the question though: can companies afford not to adopt this mindset?! If they don’t, will they still be around in 5 or 10 years’ time? The answer might well be no. 

Some companies we work with have created new governance processes to expedite the launch of new businesses. Others have or are considering spin-outs with a leaner governance, modern culture and team design. We’re actually working with an established brand at the moment to rethink their governance so they can launch innovative products quicker. 

Businesses need to reinvent themselves continuously, with experimentation key to unlocking growth

What are the advantages and disadvantages of launching a ‘beta’ startup-like business within an existing company?

The big advantage of the Beta Business model is that you accelerate your learning. Will your assumptions be proven to be correct? was your target market right? did your proposition land? was your onboarding journey right? Other advantages are that you can reduce the risk of your business plan, supporting it with real data. It can also be a great way to explore new business models, although sometimes to do this fully requires a spin-out as it might be cannibalistic. NowTV and Sky is a good example of this. 

Disadvantages? From our perspective I can’t think of any. From a client’s perspective if they understand it, they don’t see any but they will know it might be hard to really make it happen.

Are any other businesses offering a similar service to you? If not, why not?

There are some people who are similar to us in certain respects but might be focused on the strategy or the product development but not the whole process. I think the reason why there aren’t more yet is that many companies are newer to this way of working. Software consultancies are good at agile but not so great at innovation/design. And big consultancies have only recently started to offer these types of services. They’re still working out how best to bring the necessary disciplines together.

What one piece of advice would you give a business looking to launch a digital product or service in 2018?

Bring some kind of customer launch as early as you can. It’s only at this point that you’ll actually learn whether what you’re offering is something people will switch for/adopt/pay for. It needn’t be too many people which keeps the risk profile low but even if you are doing customer validation it’s difficult to know whether people will actually take it up.

News

More news on