Case Study: How These 4 Companies Created Their Successful Business Ideas
Finding out the true source of a company’s success can be tricky, and without and understanding it is hard to think of successful business ideas of your own. These exact reasons are why I developed this case study. One of the best ways to gauge an existing company’s success in the marketplace is to take a deep-dive into the idea process and philosophies of the founder(s). Looking specifically at the company today, the founders’ first experiences, idea validation strategies used, and tips from the founders to give you a complete picture of what a successful business idea looks like these days.
In this case study, you will learn how these four companies thought of their business ideas, validated them, and continued to grow to the successful businesses they are today.
About the Company
Wiivv is a 3D printed wearables manufacturer. They have developed a way to 3D print custom insoles for people that feels significantly better than current orthotics, last longer, and are highly customized to each person. Now you don’t have to worry about paying $250 and getting a bad insole that ruins you further. With data-driven wearables coming in the future, this company is doing really innovative things!
The Idea Story
The original idea for Wiivv is a story about the two co-founders, LV and Shamil, and how they utilized their own experiences, strengths, passions, and resources to build this company.
During LV’s high-jump career throughout high school, he suffered from an unfortunate accident that left him needing orthotics. Forced to use them, LV continued to have bad experiences with the insoles. Sometimes they weren’t right and sometimes they would be great, and since it was made by hand the product was not consistent. These discrepancies with the product can cause people to actually experience more pain than they would without.
First Step into Entrepreneurship
When he was about 18 years old, he started a nutrition analytics company. After a lot of effort, the company failed. However, by this time, LV had caught the entrepreneurial bug and loved it! After his first year in college, he started his second company which was a Natural Gas Compressor import company. He would import these compressors from China, and sell them to make a profit. Each start-up and experience played an instrumental role in the continued success of each venture.
In LV’s sophomore year of college, he discovered 3D printing and began 3D printing his own car parts for fun. With the complexity that comes with 3D printing car parts, using various metals and plastics, LV was able to become very proficient with utilizing multiple materials. This helped him immensely with the idea that was about to come, as most people who think of a business idea from 3D printing become limited due to experience. Some think anything is possible with the technology, but it can bring restrictions if you do not know what you are doing.
From his own frustrations with the orthotics industry, past experiences 3D printing, LV began to look at the intersection of these two concepts and found an idea for 3D printing insoles. Quickly, he noticed the materials used in orthotics were identical to the capabilities of 3D printers. With the explosion of the e-commerce industry over the last decade, he wanted to make the product accessible to everyone. This led to the beginning idea for Wiivv!
With this idea, LV brought it to his friend, Shamil. They met through the 3D printing world when creating car parts, while Shamil helped pioneer HP’s 3D printing strategy (HP now has some of the greatest industrial 3D printing technology in the world). Through this, Shamil was able to bring a lot of his connections and resources to the table for Wiivv, and take them to the next level. They didn’t want their product to be something that varied in quality and durability, so they set a strategy to utilize industrial printers, which was perfect with Shamil’s experience and connections.
Analysis for Validation
To help validate their idea, they used a technique that they continue to use today with new products. Using 100 of their target market customers, Wiivv implements tests that push their products to the limits to see what can be improved upon. Extreme athletes are some of the people incorporated in the analysis, for example. During these tests, many data points were collected relating to bio-mechanic variables, durability, and comfort to name a few. This gave them great feedback for a successful launch, and they did the same with the continuing development of their product line. From this, they have been labeled one of few footwear products clinically validated to reduce injury, maximum pronation angles, and other factors detrimental to sound biomechanics.
Point of Pivot
They began taking the clinical route -- approaching doctors for prescriptions but they quickly decided to pivot when they saw a competitor fail taking the same route. This is when they started building their mobile application and computer vision system. As well as began working to launch their ¾ shoe sole, as there was always an end vision to be a Direct to Consumer company.
How to Help Drive This Innovation
A large contributor to LV and Shamil’s success with innovation and creativity has steamed from their commitment to working ON the business, and not IN the business when needed. For example, they take some time to look at the latest new tech. or gadgets out there, and see if they can further optimize their business with it. A key lesson to see out of this is, if you are thinking of an idea, don’t get caught-up in the smaller tasks and how you would complete them --concentrate on the larger image and how you can build that.
Last Tips from the Co-Founder
Don’t stay with your idea being an idea for too long. You will always want to test it over and over, while still staying with what you believe in and sticking to it. However, it can be an easy trap to test your idea, and get feedback that is not from your target market, and should not be followed. A lot of people do this, so it can be hard. Like insoles, a several people need them, but no one talks about it. What is critical is to let your one idea lead to another, and to discard your assumptions in the process.
Check out there kickstarter page for their new sandals!
About the Company
This software company is on the cutting edge of User Experience Design in healthcare. The products and services created at Ayogo are proven to increase patient engagement experience, while improving health outcomes.
Michael, the founder, takes a really unique approach to innovation and business ideas.
The Idea Story
Ayogo as currently constituted, was spun out of a game studio in Vancouver. The founders saw an interesting opportunity in applying design patterns from games and play to healthcare applications, and developed a psychological model based in part on evolutionary psychology. These insights slowly worked their way into business plans, and ultimately into an operating business. However, Michael did it a lot differently than most, which might be a large factor in the company’s successes today.
It wasn’t the idea, inspiration, or even the technology that defined the business. It was the team, first. Starting with a general idea of where he wanted to go, he built a team, and let the team finds its own way. Why take this approach? If you look at the stats, you see almost all companies fail. About 95% of businesses don’t last longer than five years. The surface reasons for their failures vary widely, but Fergusson’s opinion is that if you look beneath the surface you see these reasons generally boil down to a single factor: a lack of talent in key moments.
With this mindset and knowledge, he wanted to focus on building the best team, which can pivot and create new value when confronted with obstacles. Since there is a low amount of venture capital available in Vancouver to build start-ups, Michael tapped into his network, looking to build a team with the energy and maturity necessary to bootstrap the business from nothing. Bootstrapping the initial months, and running off the revenue they brought in, they began to refine the process, technology, and idea over time. “The philosophy in the early days was to make sure that someone was always paying for every line of code we wrote, and to ensure that when it was written, that we would own it”. Instead of trying to find demand for a bunch of supply they created, they progressively refined their offering, customer by customer.
“A great team will take lemons and make lemonade, but a poor team will always be relied on to spoil the milk.”
The team did not know exactly what would form the foundation for a scalable and repeatable product business, but certainly, they saw a lot of problems to be solved. Next, they found people who would pay to solve some of those problems. Then the challenge became, how do you keep control of the innovation, own the intellectual property, and continue to build on it? How can you do that and avoid finding yourself trapped in a sequence of unrelated projects? To solve this, Ayogo was first and foremost careful in structuring their contracts, so that the company retained ownership of software IP, and secondly constantly evaluated their projects, customers, and potential customers, looking for commonalities. From those insights, the team crafted its sales and marketing message as a hypothesis to be tested against the market.
How Past Experiences helped Ayogo
As an entrepreneur since 1998, Michael’s past experiences were very pertinent in building the team, developing clientele, and managing it all. By utilizing his relationships and past connections, they were able to find the right people they needed. In short, past experience was a huge contributor to the success they have today. A wide range of experiences from everyone was critical in how clients were handled, and how things were brought to the table for the company’s vision. He knew that if the company was to survive using a team-first mentality, the team needed to really come first, and leveraging everyone’s strengths and experiences would be essential to success.
For inspiration and creativity outside of the office, Michael has many outlets that allow him to be creative. For instance, he has a deep artistic background, playing music, writing poetry, and playing sports such as soccer. He has also practiced martial arts, and trained to be a composer in the past! A huge takeaway here is that Fergusson utilizes these different experiences, which helped him gain different perspectives on life and business. These different experiences lead to great ideas that he and his team can build upon for clients.
How to Keep Track of the Innovation in the Business
Regular off-site meetings are a must for everyone! Getting people out of the flow of the work is great. As well, getting people to, at least for a time, stop working IN the company and spend some time working ON the company. This allows everyone to be a part of crafting the vision, and have buy-in, which is huge for employee morale and overall innovation in the business. On top of that, Ayogo has a strategic council of senior people in the company, who get together to evaluate progress towards key goals, and a weekly management meeting for a tactical process with what is going on.
Culture eats strategy for breakfast - Peter Drucker
Last Tips from the Founder
If you have an idea that you want to build into a great business, you need a really great team. The wrong team or a poorly constructed team will take any opportunity or business idea in front of them and destroy it. While a great team will always find a way to pivot out of a bad decision. The most important question you can ask yourself is who do I trust with this mission? Not what needs to be done, or how should it be done. Also, getting people working ON the business, instead of IN the business is a real driver of creativity and innovation of the direction they take.
About the Company
KeyCafe is changing how people manage their Airbnb. With KeyCafe, local cafes in your area can sign up to hold your keys in a secure manner. This allows the Airbnb host a hassle free experience for giving and collecting the keys to an apartment or house. Guests can collect and return keys any time the cafe is open. The cool part is that you can control who has access to your key storage through a mobile app!
“They thought the problem they experienced themselves was a problem a lot of others may have.”
The Idea Story
The idea for KeyCafe began with the co-founder, Clayton. Actively trying to come up with business ideas, he began by looking at his own pain points for experiences and looking at friends pain-points. Most of the concepts he was working on related to his own personal experiences, and things he knew. As an Airbnb host in 2012 (the real early days of Airbnb) he was always having trouble getting his keys to the guests in Vancouver. No service out there would answer his needs accordingly. Clayton would pay for cleaning services, and they would forget to bring the keys, or he paid someone to deliver a key and wait for the guest if they were late, which was pricey. From the research he did regarding a service that is a key exchange, he found nothing, and knew this would be something to further look into for a business idea of his own. Clayton invited his friend Jason into the idea as he was an Airbnb host who encountered the same problems, and was a marketing wiz. They thought the problem they experienced themselves was a problem a lot of others may have.
“Most of the concepts he was working on was related to his own personal experiences and things he knew.”
One thing they knew for sure was when you first come up with an idea, it is not the end game. You need to spend the time to see if it has any business merit to it. This is where the real journey of KeyCafe began. The following three months, they began investigating to see if it was just them who had the problem, or if it was something bigger they could capitalize on while helping themselves. Hitting the streets, Clayton and Jason hired students with iPads to survey people, implemented online surveys and other techniques to collect hundreds of data points. During this time as well, they started to conceive what the business would look like and how it would work, as they received the positive data.
Tip from Jason (co-founder): The concept of ideas need to be validated. If you have an idea don’t just jump into it because you think it’s great or because it is your first idea. It needs to solve a real need. From our perspective, at first, it was a personal pain point being solved. Not something that was captured out of the blue, which can be the case. You can even look at Airbnb, they needed money so they put a mattress on the floor. Starting in an industry you understand will help a lot, because you may be more familiar with the problems out there. Sitting there just picking your brain trying to come up with ideas can be a problem, and frustrating because most of the time if you do this you are not solving a problem, which is what businesses do.
After three months of data collection, it became pretty clear that the idea definitely had legs, and people would use this service. Taking the step to incorporate in January of 2013, a half a year was spent creating the minimum viable product (MVP) to get it out there, and people utilizing the service. Starting with the basics, the hardware and software of the business were built out over time as more deals were made clear, and due to the high complexity of the system, it took time to figure out.
However, throughout the idea validation process, they thought about a lot of combinations that would work, but in the end, they stayed focused on their original idea, key exchange. The survey was a huge tool, but also made them stay hyper-focused on their idea, and avoid distraction from other problems out there. Also instead of doing everything for everyone, as business people, they knew that each piece had the potential to be its own successful business so the key exchange would not be a maid service and key exchange. With the data supporting the idea, they decided not to pivot on the original idea.
Solidifying their Idea
Nailing down the idea, they chose to use cafes because if you put it in a public location, close to the residence, the person can take their own time, and the host does not have to worry about it. Additionally, paying someone to manually hold the keys is expensive. Using cafes was the original idea and that is why they wanted to stick with it. However, at first, it was a manual system, which required staff to interact with you, take the key and tap an NFC reader to check in/out. They needed highly trained staff that was smart, but now they a have system that can be installed on the wall anywhere, like 7/11.
Last Tips from the Founders
It is hard to just come up with an idea from an industry, off the top of your head. If you were an Airbnb host for a bit, you would be able to grasp the industry, your own current problems and take it forward. Operating in the space you will be creating a business in is HUGE for the success of your idea, because you will be your own customer. Build a business you would actually use and validate it through other people as well.
About the Company
Fest Hut is North America's first music festival tent rental service. It solves the problem of having to bring, carry, and clean your own camping equipment with you to music festivals. It also helps the environment by preventing a bunch of materials being thrown away when people ditch their tents after the festival. They are changing the perspectives of traditional music festival camping, and putting the future of the environment first!
The Idea Story
The idea journey behind Fest Hut is brought together by the founder’s experiences, and connections. Beginning a few years back, the co-founder, Logan, took a trip to the music festival, Tomorrowland. A festival jam packed with awesome music and events, Logan noticed that when you go to any music festival, you have to bring your own tent. After returning from this trip with the new knowledge he had gained, Logan began his final year of university, specializing in entrepreneurship. He saw this as a perfect opportunity to explore this business idea further, in a forgiving environment. After quickly approaching his friend Robbie about the idea, as he was in the same boat -- specializing in entrepreneurship -- they ran with the idea as their project. To add to this Logan, Robbie, had heard a countless number of stories from friends about the unpleasant experience of having to hike to the camping grounds with a big tent from other festivals. Once the festival finished, it was a distraught scene of people leaving their tents behind because they are lazy or it was broken by the end. This huge waste in material also sparked thoughts in the co-founders minds because of their passion for sustainability.
During this time, idea validation was critical for the continued success. To find their target market they looked at the top demographics, socio-graphics, and psycho-graphics of people that attended music festivals in North America. Online and in-person surveys were deployed to their target market. This helped them understand not only their age but their willingness to pay by combining survey results with assumptions of people’s perceived value of the tent.
Doubts in the Process
Three months quickly went by as the two tried to piece together what their business would look like. Although they had developed the general idea of renting out tents, there was a lot of smaller details that needed to be worked out. Details such as the material of the tents, branding of the tents, suppliers, etc. However, once the Entrepreneurship module was over, it quickly put them in a position to either work non-stop work with a full-time job and Fest Hut, or abandon Fest Hut altogether. This decision did not come easy for them, but after they both evaluated their love for music and the experience they would gain from this, the answer became an easy yes.
How Experiences and Connections were used
The experiences and connections that Robbie and Logan brought to the table really took their idea forward. Robbie previously worked for the family business that dealt with cardboard manufacturing, so this gave him a lot of knowledge of the cardboard industry and what can and cannot be done. This knowledge helped them pivot as well. Originally, they were going to go with a nylon style tent, but this clashed with co-founders passion for environmental sustainability. With the pivot to cardboard material and Robbie’s knowledge of the cardboard industry, they were able to create a product that is environmentally friendly, and also awesome for sleeping in! With coatings to protect against rain, this pivot worked perfectly with their business plan, and their morals of doing something good for the earth.
The first huge lesson to take away from this is to utilize your experiences and connections. Without Robbie’s connections and experiences with the cardboard suppliers, the brilliant idea for their pivot to cardboard instead of fabric would not have materialized (no pun intended). The co-founders both utilized their experiences in the entrepreneurship module to learn valuable lessons, and test their idea of Fest Hut.
Secondly, is to build a business that you want to work in every day, and you are excited for what it is you are providing or selling. Robbie and Logan are both avid music festival goers, who love music and festival fun. This business is perfect for them! It allows them to travel to all their favourite music festivals while enjoying the summer the way they want to, making some money and entrepreneurial skills.
The Key Takeaways from this Case Study
When thinking of your business idea…
1. Incorporate and utilize your past experiences and knowledge to support your unique advantage in the marketplace.
2. If you don’t have the experiences and knowledge, make sure you can build a team that does.
3. Take into account the resources you have available to you (ie. Venture capital funding, marketing assets, spare time, office space, computers, etc) as this can allow you to take your business to the next level. A great example of this is Wiivv with Shamil’s connections in 3D printing.
4. Spend time working ON the business and not IN the business for periods of time. This can apply to your business idea too. Instead of thinking of all the little tasks you will be doing, think of the overall vision and large-scale tasks you would be doing. This will allow you to either solidify a vision for your business idea, or scrap it because you don’t like the route of that idea. Two companies out of the four say this is critical.
5. Either spend time validating your business idea rigorously, or validate by solving existing problems already out there and creating your end idea from that.
I hope the insight from these four companies’ help you get a grasp of how to think of a business idea, the right way. The important part about learning from successful companies, is you take away their wisdoms and implement those wisdoms into your business idea. Now that you have read this, take action on one of these five key points written above. If you do, please comment with what you come up with, or how it has helped your business idea brainstorming.
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