In the movie Star Trek II (and in the more recent reboot), then-Starfleet Academy cadet James T. Kirk relates the story of the training exercise to try to save the Kobayashi Maru as a key learning experience for his transformation into a leader. The goal of the exercise is to see how people react in a no-win situation.
Startups are created with the purpose of becoming big, failing, or being bought. They seem feel like the proverbial no-win situation because everything has a competitor. If someone isn’t spending money with you, they are spending money on something else that they’ve probably been doing for a long time. And there’s so much noise everywhere. How can anyone possibly create something new?
Creating something new can take many forms. Like Kirk, the startup founders who solve this Kobayashi Maru problem change the rules of the simulation.
As Steve Blank writes in his article Why the Lean Start-up Changes Everything,
“Start-ups are not smaller versions of large companies. They do not unfold in accordance with master plans. The ones that ultimately succeed go quickly from failure to failure, all the while adapting, iterating on, and improving their initial ideas as they learn from customers.”
Because startups are a tick (referred to as funding, runway) away from being a no-win situation, your goal should be to solve the problem of matching a business model to supply and demand and executing that well, while building at least a minimum viable product (MVP.)
That all sounds good until you realize the thing you built is a bit different than the job customers want to hire you to do or the job that you need to do to make the economics of the situation work. So startups really are like the Kobayashi Maru until you change the conditions of the simulation.
The Goal: Change the Game
The game of a startup is a product or service that you want someone to use (and hopefully, to buy). It is also a balance of inputs – what’s required to produce the service – and the outputs – what is ultimately used by the customer.
Replicating an existing model does not change the game. If you were building a startup to deliver pizzas, you wouldn’t start by copying the existing model, except to have a place to start. You would change the game, if you were able to change some of the basic rules of the business.
In the imaginary pizza business, increasing the yield – getting more pizza from the same inputs – would be a game changer. Changing who pays for the pizza – moving it from the consumer to the provider or to a third party patron – would be a different model. And changing the definition of pizza might be a third different model that changes the traditional picture of what it means to deliver pizzas.
You might also focus on the efficiency or convenience of improving the current process 10x by making it easier to order pizzas, to improve the loyalty aspect of pizza marketing, or to appeal to a niche pizza market that happens to be underserved (gluten free and vegan pizza lovers, perhaps.)
The Timing Has to Be Right
Even if your idea changes the rules of the simulation, you also have to be present at the right time to make the match between market demand and supply work. (Just ask WebVan how the whole grocery delivery business worked out. And notice that it’s working out just fine for Amazon Fresh.) An idea might be good, but just too early for the market.
If your idea causes a behavior change, that also creates a challenge for adoption. You need motivation, ability, and a trigger to cause change.
Changing the game then requires understanding customer motivation – what is it that makes the customer tick – and presenting a benefit that matches that motivation. Changing the game also means expecting the customer to do something they are capable of doing. And finally, changing the rules of the Kobayashi Maru simulation requires a catalyst to make that customer realize that it’s time for change.