Innovation at Dimagi, Part 8: Learnings from 5 years of New Business
By Shabnam Aggarwal
I am both sad and excited to announce that I will be departing Dimagi on April 1st; sad because it’s been a beautiful and impactful journey, and excited because I’ll be joining as the CTO at Rising Academies, a low-cost school chain and education company. Over the past 5 years, I have worked to build an entirely new team at Dimagi called New Business, which we’ve written about in our blog series “Innovation @ Dimagi”. When Jon and I first embarked on this endeavor, we had a thesis that Dimagi would benefit from a siloed team that could take new product or service ideas, run with them for a short period, then call go or no-go based on early outcomes. If we decided to go on an idea, the end goal would be to establish reasonable recurring revenue, then integrate it back into the core business and a new product or service offering to all our clients.
We learned a lot during my time running New Business. Our core thesis did end up working out, we were able to successfully manage multiple innovative product development processes using the innovation lifecycle we designed. Focus has reached a mature stage with a full SaaS business model, and Cloudworks has reached an iteration phase after successful pilots and several in production, and we had many “successful failures.”
Looking back, the big question we ask ourselves is, would we have done it all the same if we knew then what we know now? At the time in 2017, Dimagi was not in a financial position to make risky investments in innovation, so prioritizing New Business innovation work at all was a big gamble. By restricting the team size, the access to the core team (we had none), and annual capital spent, we were attempting to derisk the investment into innovation ideas, knowing many would fail, but was that a double edged sword?
Being Lean Helped
In my perspective, having limited resources was actually incredibly important to the success of the New Business team’s innovations. It forced us to stay scrappy, try crazy ideas that may have been too risky for the core team to try, and learn fast from our mistakes. I look back on all the projects we did across the innovation lifecycle and am very impressed with what we were able to accomplish.
Being Lean might have also hurt
Dimagi has grown substantially since we first started New Business. That means our core businesses are now even stronger than they were when we first started New Business. The necessary “escape velocity” to both find product-market fit and get the product into a core business line therefore got harder over time. The early stage of developing new products, prototyping, and finding and testing initial product-market fit stayed constant. However, the iteration and demonstrating a viable path to scale relative to core business requires more investment as the business becomes more successful. Ironically, this is a really good thing since that’s a direct result of the core business performing well relative to impact, team and profit goals; but it means it requires more investment before a product can successfully compete against core business goals.
Applying these learnings
Dimagi recently completed its first acquisition, an amazing company working in digital health: SureAdhere. Jon mentioned that our work together on New Business was incredibly helpful to think about how to make the acquisition successful, and how to still enable product innovation while scaling. We learned how to make disciplined investment and where that can be incredibly productive, and how to be realistic about the investment required to enable high growth in products that have achieved product-market fit.
After five years of learning and reflection, here’s the advice I’d give to other organizations considering how to drive innovation from within:
- Create space for a dedicated entrepreneur on the inside of your organization
- Increase the value of failure at your organization
- Identify your innovation mission, go/no-go metrics and timelines early on
- Allocate a dedicated amount of risk-capital that you’re completely willing to lose for the sake of learning
- Give your team enough runway to truly liftoff
- Document (ideally publicly) the entire process – successes, failures, insights, and next steps
- Reevaluate your portfolio of innovation consistently
While this is the last in this blog series, I know Dimagi is in great shape to continue innovation and New Business, though it will and should look different than when I started the New Business team. I’m excited to take on my next challenge and get back to the education sector which has always been a deep passion of mine. I look forward to supporting Dimagi (and our partner organizations) from the sidelines while they take on innovation, and both fail and succeed in our ongoing endeavor to bring valuable solutions to those who need it most.
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