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Below is our recent interview with John McDonald, the founder & principal at FIRSTEP:
Q: Could you provide our readers with a brief introduction to FIRSTEP?
A: FIRSTEP is a boutique innovation firm offering enterprise a unique way to inject fresh thinking on the forces of disruption that threaten their business. Our job is to help innovation leaders reduce disruption risk, identify new opportunities for growth, and build internal alignment around where to place bets for future growth (and why).
Our approach is simple but unique – we identify areas of profound disruption (examples might include digital marketplaces, blockchain etc.) and we immerse ourselves with promising startups focussed on creating innovative new solutions in those areas. One startup at a time, we host day-long collaborative experiences, where leaders from the startup and enterprise come together to hone their thinking on how the key forces of disruption are most likely to unfold over the next 2 to 3 years (and why).
Enterprise leaders benefit from deep immersion into a genuinely fresh perspective on the forces of disruption in an environment where it is safe to stress-test entrenched assumptions. The thinking that emerges helps reduce disruption risk and spark new opportunities for growth, while the process itself helps innovation leaders build internal alignment, reducing friction and increasing organizational agility.
The startups also benefit, not just from stress-testing their foundational assumptions and honing their thesis, but from deep exposure to the enterprise perspective.
Q: Where Edge-Insights come from? Why does it matter?
A: Edge-Insights come from startups and intrapreneurs…the people working on the edges of the main stream, tirelessly pursuing their passion to create the next big thing:
•Startups and edge-innovators are a profound source of disruptive innovation, so we immerse ourselves in their thinking rather than re-hash the popular view from the ‘usual experts’.
•We focus on disruptive forces because we believe that they define what is possible (from both a technical and timing point of view).
•We focus on WHY they are doing it, rather than dissect what they are doing, because we believe that’s the most effective way to gain fresh insights into how these innovators see the forces of disruption unfolding (and why).
•We use a unique process, proven to be a remarkably effective at identifying the speed and trajectory of those forces with the greatest potential to disrupt the status quo.
•We distill key insights into actionable recommendations based on first principle’s thinking.
Edge-Insights Matter, because most disruptive innovations come from entrepreneurs who are out on the edge, ‘betting it all’ based on how they see the forces of disruption unfolding. In most cases, these edge-innovators have a genuinely unique perspective on which forces matter and how they are most likely to unfold. It is this unique perspective that enables them to envision a different future and place different bets… edge-thinking is literally the window into disruptive innovation.
The challenge, for enterprise innovation leaders, is that edge-thinking is rarely intuitive to incumbents, and enterprise leaders rarely get the chance to immerse themselves in this unique perspective in a meaningful way. FIRSTEP has the proven ability to help enterprise leaders tap-in to these powerful edge-insights and translate key learnings into immediately actionable recommendations that help reduce risk and spark growth.
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Q: How can you help organizations reduce the risk of disruption and spark new opportunities for growth?
A: We live in an era when exponential forces are disrupting virtually every industry…the ability to avoid disruption has become a critical leadership skill. Our unique approach is remarkably effective at helping innovation leaders:
•reduce organizational blind spots through exposure to fresh thinking about which forces the greatest potential to impact their business
•stress-test entrenched assumptions and build internal alignment on how critical forces are most likely to unfold
•identify immediate actions that will reduce disruption risk and/or spark new opportunities for growth and investment.
•distill key insights into first-principles that help with future decision making
We have a range of ways to work with enterprise venture and innovation teams, from a ½-day briefing to full immersion in our DeepDive sessions. In all cases, its our job to help hone their thesis and build internal alignment on where to place winning bets for future growth (and why). We offer:
DeepDive Briefings – a formal briefing that distills the edge-insights from each DeepDive.
Presented in person or remotely (with or without a strategy workshop).
Thesis Formation – using the FORCECASTINGTM process, we help innovation leaders build internal alignment on how the key disruptive forces are most likely to unfold (for a specific initiative or market space). Formalizing the internal ‘thesis’ helps to accelerate execution by removing friction and increase agility by creating an efficient mechanism to rapidly identify and adjust when disruptive forces change speed and/or trajectory.
Full Immersion – in some cases we work directly with enterprise leaders to select a topic and run an entire DeepDive together. In these situations, company leaders participate in the DeepDive sessions as well as internal thesis and strategy formation activities.
A good example is TELUS Health. They have partnered with FIRSTEP on numerous DeepDives, including Pharmacogenomics, Precision Health, Consumerization of Health, Health Marketplaces, Blockchain in Health, the Shift to Community-Centric Care and The Homecare Tech-Stack. Their participation has not only influenced their strategy, it has led to several direct investments in participating startups.
Q: How are you different from traditional venture investing activities?
A: Disruptive innovation promises both potential and the peril, which is why so many organizations invest time and money in startup accelerators, direct venture investing etc..
Our approach is complementary to those activities and we work closely with venture investors as DeepDive partners and as briefing recipients.
The challenge for venture investors is time…they commonly need to meet with 100 to 200 companies before making an investment. It is a huge time commitment, so meetings are short and follow a very specific pattern. This approach works well for sorting through the startups that are NOT a fit, but it is not ideal for testing assumptions and inspiring fresh thinking. When fresh insights do emerge, they rarely make it into the enterprise.
It’s this ‘fresh-thinking’ challenge that FIRSTEP helps solve, and we do it through a proven approach to deep immersion with disruptive startups. Through our unique approach we’ve become very effective at finding patterns and uncovering insights that simply would not emerge from the typical ‘pitch’ process. By distilling these down to first principles, we’re able to help venture teams stress-test hidden assumptions and hone their investment thesis. In those cases where a strong fit emerges, the investment ratio between venture teams and participating startups is significantly higher than the traditional path.
In our view, it is almost impossible to see the next big thing by looking at new ideas through the same old lens…it requires a fresh perspective…it requires an ‘edge’ perspective. We provide a remarkably effective way to keep thinking fresh, and in a hyper-change world that may be the most valuable thing of all.
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Q: What are your plans for the future?
A: For the first few years, we’ve spent most of our time immersed in DeepDive sessions with promising health startups. That was critical because it built a foundation of fresh thinking that now informs all of our work, but these days we’re spending an increasing portion of our time sharing the learnings with innovation leaders, helping them use edge-insights to stress-test entrenched assumptions and course-correct strategy.
As we move forward, we will continue to expand our focus outside of healthcare, particularly in areas where there is significant overlap. A good example is the Internet of Things…it is difficult to imagine a world where IoT’s connected sensors do not also play a role in healthcare, so there are clear benefits to sharing foundational thinking across the two sectors.
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