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11 Important Truths About How Innovation Really Works

 

Here is a set of truths about building breakthrough products that I wish I knew when I made my first product.

1. Innovation is almost impossible.

Don’t mistake innovation for the obvious improvement of products. Version 1.1 is not innovation.

Don’t worry; you’ll know innovation when you see it. It’s a rare goosebumps moment that only comes when we employ radical new solutions to significant problems.

2. People, Products, Profit and Promotion are the four domains of Innovation

Innovation often comes in the form of new products and services. Less common, but equally powerful areas of radical new approaches can be people, profit and promotion.

Company culture, business models and storytelling are legitimate playgrounds for creative breakthroughs.

3. There are three types of innovation; Customer Experience, Products and Systems.

Retail experience or customer care are two typical areas of customer experience innovation. The second area of innovation that requires far more effort is products and services that help customers get jobs done.

The most complex, but highest in potential, area of innovation is a system-wide approach. Network effects like Waze and marketplaces like Airbnb are the heavyweight champions of innovation.

4. As designers we must create a product that is equally desirable, viable and profitable.

The practice of customer empathy is the start line in the race to build a breakthrough product. Equally important is ensuring the right materials and technology can work together to make the product a reality in the hands of customers. Lastly, we must ensure that we can price the product sufficiently.

The catch 22 for designers is that a product needs to be more than desirable. It should be a delicate balance of viability, profitability and desirability.

5. A product that is highly desirable starts and ends with the validating the pains and gains of your customer.

By testing and learning with customers at the beginning of the entrepreneurial journey, you move from guessing product features to knowing.

At the heart of this practice is understanding the problems customers face getting jobs done. Our mission is to create tested pain relievers and gain creators that serve the customer.

6. Rapid Prototyping is the secret sauce to product design.

By creating low fidelity prototypes of our new products, we can quickly test and learn what works. By conducting lots of small tests over a condensed period, we begin to see patterns in user journeys.

We can prototype the needs, the journey and features customers might use. The hard work of validating features leads to healthy products and a strong customer connection to illuminate our path.

7. There are three stages of fit in innovation.

Companies often launch products with big marketing dollars hoping for fame and fortune. All too often this fails because the company skipped the three stages of fit.

Problem Solution Fit is the first stage where we valued a product in low fidelity prototypes. The step is character sized by curiosity and is complete when we’ve tested and learned with many customers. When we have a strong sense of what product features address the customers problems we can move to the next stage.

Product Market Fit is all about viability. This stage is all about building an MVP for customers to test. The product is raw, but tackles the essential task at hand and delights early adopters.

A growth mindset defines Distribution Conversion Fit. At this moment we take the product to market and tell the story across paid, earned and own media. Our critical measures at this stage are traction and profitability.

8. The bias toward the status quo is the most significant barrier for new products

Customers love what they have. When proposed a new product, people often perceive more pains than gains. They instantly weigh up the switching costs. Just start thinking about switching your smartphone operating system.

Entrepreneurs often compound the gulf of uncertainties by being so obsessed with the new product they fail to appreciate the loss aversion behaviours of customers.

9. Avoid creating a product that nobody wants

Deep in the mist of innovation is the search for the right balance of ingredients for a radical new solution. Ensure that your product requires as little behaviour change as possible. It should require as little time, effort and money as possible. Additionally, avoid creating too many brain cycles and don’t deviate from social norms and daily habits.

On a brighter note, ensure that you create disproportionately high amounts of simplicity, freedom and mobility. Moreover, if you can, look at serving the most significant human needs of impact and fulfilment.

10. Three essential things to fuel a team: communication, collaboration and vision

Effective communication, collaboration around a shared vision is the fuel for a team. Without these three things, the mission will fail at the first hurdles.

Daily scrums, working sessions and a constant focus on the mission significantly increase the odds of creating a meaningful new product.

11. When all else fails, go back to your customer.

The innovation journey is complex and full of perils. It’s easy to be distracted and to find yourself at a dead end. No business model, lack of staff, lack of tools are common obstacles.

However, all of these come back to a common theme: are we solving a customer problem? Are we relieving their pains and building gain creators?

If you return to this question and spend time with your customer, you will find the answer to all your innovation problems.