Hackathons (or innovation bootcamps) are a great way to bring together teams with the common goal of quickly solving problems, building prototypes and validating market appetite. This not only helps teams test many ideas quickly to find out what works but also saves them by avoiding the trap of committing millions to building the wrong thing.
Hackathons, done right, open people’s eyes to a different way of thinking and plant the seeds for a fail fast, “move quickly and break things” mentality, made famous by Facebook, that underpins innovation and the discovery of new business models.
What hackathons help facilitate:
Sadly, far too many hackathons throw people together in the pursuit of creativity and they are successful at getting the creative juices flowing but fall short of delivering any tangible value beyond that by way of prototypes or products that may actually generate new revenues for the participating company.
Firstly, we need to answer the following questions to the affirmative in order to develop an optimal hackathon environment, under which tangible outcomes are given the best chance of success.
If you can't answer yes to the above questions, there is a significant risk that your hackathon team will lack necessary skills and any prototypes developed will simply fizzle out post the hackathon. As a result, cynicism about the company's innovation efforts will creep in and the company will ultimately end up losing intrapreneurs to other more progressive companies or new startup ventures, at a time when they need these people more than ever.
1 - No focus on market validation
Hackathons often stress building prototypes quickly around a central theme but don’t focus enough on understanding the customer job to be done, the problem being solved and value proposition, the development of business models and validation of underlying assumptions to best gauge market appetite for a product.
A friend of mine recently attended a corporate hackathon where one of the teams worked on an app to “help you find a warm place in the city”. How about getting out of the shade?
Recommendation: Use lean startup methodology to frame ideas around an actual problem and clearly defined value proposition. Use the business model canvas to determine key assumptions and build prototypes accordingly. A prototype should only be built to validate these key assumptions, otherwise it serves very little purpose.
2 - Teams lack cohesion
Oftentimes people turn up to hackathons and are thrown into groups of people that either don’t work well together, don’t bring enough unique and different cross-functional perspectives to the table and lack a broad skill set to make the most out of the hackathon.
Recommendation: Ensure that teams contain a good mix of skills such as designer, developer, marketer, business mind as well as people with industry experience. Including customers in the process can also be very value adding.
3 - Participants pitch their ideas to non-innovators
It’s no secret that large organisations usually require a business case when allocating resources to new projects. This business case includes metrics such as minimum gross margin and market size. But what happens when the market size is small or unknown, as is initially the case with most disruptive innovations?
Judges end up selecting safe bets, where the market is known. The problem with this is that we only choose innovations that are incredibly replicable, generate only some small short term value, serve only our existing customers and are ultimately incremental, not breakthrough or disruptive innovations.
Airbnb made US$200 a week in its first year - it’s now worth more than US$25B. Think about that next time assessing products based on market size.
Recommendation: Use innovation metrics when selecting winners. Selection criteria such as scalability, business model and market validation should be stressed above market size, gross margins and other predictable indicators.
4 - No resources or plan to explore successful ideas post-hackathon
In the event of having built prototypes that show some early market validation, we should have a budget allocated to further explore the ideas, preferably in an incubated environment away from bureaucracy of the mothership.
Giving people movie vouchers for participating is great and all (I hear there’s a new Rocky movie out!), but it won’t stop your organisation being disrupted by the next Airbnb or Uber.
Recommendation: Ensure there are sufficient resources to explore promising concepts post the hackathon. Consider turning partering with or investing in external startup teams with the right mix of talent and ability to move quickly in order to accelerate ideas.
The next time you or your company are considering running a hackathon, ask yourself why. If it's simply for the purposes of bringing people together, getting creative and exploring the fail fast philosophy of startups, then great, but if you are serious about transforming your company's potential to innovate then hackathons are one of many tools that can, if effectively applied, deliver tangible outcomes by way of products or services that you can take to market.
Receive thought leadership in the form of blogs, ebooks, innovation resources, videos, invitations to exclusive events as well as the latest episodes of Future², our iTunes chart-topping podcast all about corporate innovation and entrepreneurship.
Access more blogs, podcasts, videos, innovation, tools, ebooks and more just like this one here!