With the Investment Readiness Level, you now have a way to quantify the progress of a product, project, or company help you make investment decisions, whether you’re a team leader, manager, or investor.
Where is the project, product, or company in its lifecycle? Like all of the tools in this book, the IRL is designed to allow for a rich, strategic conversation, in this case, using a common set of metrics – related to the business model of the project, product, or company in question – as the basis for the conversation.
The IRL is also a prescriptive tool. Regardless of where your project, product, or company is in the design process, the next milestone is immediately clear.
Many project leads, product managers, and entrepreneurs only care about launching the next product or giving a great presentation or demo. When employing the design process however, they should be focused on maximizing learning.
How many interviews, iterations, pivots, restarts, experiments, and minimal viable products did they go through? What did they learn from that? And how did that influence their decisions? What is the evidence backing up their next step?
Whether they’re giving project updates or presentations to investors, when using the IRL the focus should be on how they gathered evidence and how it impacted their understanding of the underlying business models.
The Investment Readiness Level provides a “how are we doing” set of metrics. It also creates a common language and metrics that investors, corporate innovation groups, and entrepreneurs can share. It’s flexible enough to be modified for industry-specific business models. It’s part of a much larger suite of tools for those who manage corporate innovation, accelerators, and incubators.
Complete your first pass business model canvas and clarify your assumptions.
Find out what you can about the market size and the competition
Get out of the building and understand your customer. Validate that your solution solves their problem.
Prototype a low-fidelity minimum viable product.
Validate the product/market fit. Are there enough people that want your solution for their problem?
Validate the revenue model. Do your customers want to pay?
Prototype a high-fidelity minimum viable product that you can test on a larger scale.
Validate the left side of your business model. Can you deliver at scale?
Scale your business and the changes you’ve made focusing on the metrics that matter.
Get together with your team in a comfortable spot.
Using the criteria specified for each level, figure out where you currently stand. Do you have all of the prerequisites? Do they still make sense? Be critical!
With the team, look at the stage you are currently in, and try to find out what you need to do to make the criteria for the next level. What is the fastest way forward? Are you working on the right things?