





First, the challenge we have always seen for companies pursuing Horizon 1-2-3 has included allocation of resources that can be visualized spatially. Horizon 1 dominates the “space” of resources in terms of floor plan, people and investment dollars, and contribution to current revenue. Oh, and leadership “mind space.”
But a huge assumption of the Horizon 1-2-3 model is that all of this jostling for resources takes place INSIDE the physical space (and absolute control) of an established company that has earned the right to grow and is willing to reinvest in itself. And that, too, is a dimension that has radically changed spatially because the infrastructure of industry has changed.
Jeremy Rifkin, renowned economic and social theorist, tells us that at every stage of economic evolution three dimensions of industry structure have undergone radical innovation: communication, energy and the logistics of movement. This is precisely what is happening in our Digital World. The building blocks of this new digitally-shaped industry infrastructure are software, bits of data, virtually networked internet communications, technology systems, APIs, etc. And in this infrastructure, startups have a vast network or “ecosystem” of independent resources (i.e., not formally INSIDE the organization) available to partner with utilizing a variable cost structure and delivered virtually. Plug and play what you need, when you need it. Horizon 3 R & D has moved out of the basement and into the garages of a vast range of unknown outliers – and critical infrastructure partners. Somebody opened the doors of the industrial plant, and now the space for Horizon 3 has changed dramatically.
In his article, Blank goes on to talk about the development, and importance, of “minimum viable products” (MVPs) –“barely finished, iterative, and incremental prototypes.” Fundamental to enabling speed and ability and made possible in part because of the nature of space, i.e., “open sourced” infrastructure. “Minimal Viable Traction” that Blank talks about should now be understood as the evolving methodology of Horizon 3 development now taking place in that open space. Heady, maybe, but really critical for leaders to understand and embrace.
You may be thinking this is just the speed Blank talks about, but it’s more. This is about fast, yes, but the change to the Horizon 1-2-3 model is also influenced by the fact that speed through a “Minimal Viable Traction” approach is not controlled internally at the top or from the inside out. Instead it is driven by working “outside in” – or “backwards” if you will – from the traditional Horizon 1-2 3 model. It is a grass roots, bottoms-up movement where proven success is what moves the winners from Horizon 3 along. What the winners “win” is sufficient funding and resources to move just far enough to the next stage of expansion. While this appears to be quite different from the past, it is nevertheless a carefully structured process of minimizing risk and investment of resources along a series of very rapid stages of proven “traction” or success. For venture founders themselves, of course, this is an all-or-nothing risk commitment taking up 100% mind space and resource allocation. And many a venture is quickly screened out. For investors, risk is spread across a pool of opportunities, and carefully monitored if traction fails to materialize. But the payoff is huge if successful.
In conclusion, it is clear that there is one significant difference today from the traditional H 1-2-3 model: the mindset of key decision makers – the entrepreneurs and investors participating in this network of development. Much as Blank says, their “mental space” is likely unencumbered by the legacy thinking of an H1 business model.
Quite the opposite, entrepreneurial digital leaders are more the creative visionaries on the edge of discovery, likely driven by deep passion, and trying to figure out how to bring others along with them.
Much has been written now that identifies the challenge for established H1 business leaders in traditional companies in transforming their mindset from “industrial” to “digital” along this time – and space – dimension. Less has been written about these new leaders moving along Minimal Viable Traction in this new Digital World, basically from “H3 to H1” outside a traditional company structure. These are the new challenges for creative visionaries as they transverse the stages of Minimal Viable Traction moving “backwards” – from concept to product to scale–and along the way successfully building an entire company, maybe to new kind of digital “H1”, for the very first time. The challenges grow and differ at each stage of size and organizational complexity, whether built through internal or external space. And it all happens fast.