Fostering Innovation and Entrepreneurial Spirit with Progress Labs

After a successful stealth pilot, culminating with the launch of Progress NativeChat, we are happy to announce Progress Labs, a technology incubator for bringing ideas to life—be it a new product, business model or process. So I’m thrilled to share more details with you, starting with how we go about selecting teams and measuring success.

Every year a new cohort of extraordinary teams join the Labs while others graduate the program. Teams generally spend one to a maximum of two years testing their ideas by implementing a sequence of experiments carefully designed to prove their economic and customer value. Any Progress employee, regardless of their role and location, can apply with an idea to the Labs. We encourage all aspiring entrepreneurs to apply. However, at this point we require that all team members are Progress employees.

Application Process

We open the Labs application process in November, interview the shortlisted teams in December and select the new cohort in January with teams starting work on their ideas in February. So, the rigorous application process with the job transition takes about three and half months.

For the 2018 Labs cohort, we reviewed 29 team applications and shortlisted nine of them for an interview. The shortlisted teams pitched their ideas, following the lean canvas model, and demoed their solution prototypes. Each team was evaluated on the following criteria:

• Novelty of idea
• Team’s ability to execute on the idea
• Market traction potential in the next five years
• Strategic fit with the Progress vision

If we are impressed with a given team but not the idea, we work with that team to find a different idea to explore in the Labs. Startups would typically pivot on their original idea several times before they find product-market fit, so having the right people on a team in the Labs is more valuable to us than the original idea itself. Visit the Labs page next month to learn more about what the 2018 cohort is up to.

Team Structure

We consider an ideal team to consist of three members that can be loosely described as:

• The Hustler—a natural sales person who understands the customer and can translate their needs and desires into plausible hypotheses and user stories.
• The Hipster—the team’s creative genius who can design modern, fluid and immersive experiences on all kinds of devices and media.
• The Hacker—a coding virtuoso who can whip out a working system in a matter of days equipped with nothing but a laptop, a pair of headphones and a pot of coffee.

We limit team size to three because if more people are required to test an idea, then the idea is too big for testing in the Labs and must be simplified. We also shield and enable the teams to be laser focused on testing their ideas by moving them under the CTO organization and creating a risk-free exploration environment with tremendous opportunity for customer impact and professional growth. Team members keep their compensation and each team is given the same budget to spend at their discretion.

Progress Labs attracts the best talent within the company, so an interesting challenge we run into is with people’s transition to the Labs. Managers are aware that people on their teams are applying to the Labs, but most managers are secretly hoping that we will not have to separate them from some of their best talent. Thankfully, after some negotiation and transition planning, everyone gets on board, because they understand that fostering innovation and testing ideas in the Labs has the potential to benefit the company and everyone involved much more in the long term than what is being done today.

Success Metrics

A frequent question people ask about the Labs is how we measure success, which is not an easy thing to define and do. Teams can be working on different emerging technologies with various maturity levels, for both the technology itself and the corresponding market. We’ve defined different milestones that each team needs to hit along the way, such as achieving problem-solution fit and ultimately product-market fit within 12 to 24 months.

From a metrics perspective, all teams rely on the AARRR model, also known as startup metrics for pirates, that is widely adopted by startups and covers the entire customer journey. The model measures five things:

• Acquisition—how do users find you?
• Activation—do users have a great first experience?
• Retention—do users come back?
• Revenue—how do you make money?
• Referral—do users tell others about the value you delivered to them?

Initially, teams focus on optimizing for just two of these metrics—activation and retention—to ensure that the minimum valuable product delivers on its promise and customers continue using it. The other metrics come into play as the teams gradually scale their product and go-to-market activities.

We are curious to learn what your experience has been with technology incubators and startup accelerators. How does your company enable entrepreneurial employees to test their ideas and bring new products and services to market? Let us know in the comments below.