Stop idea hunting for innovation
Creating breakthrough innovation is still the holy grail or even a mystery to most innovation teams. It is perceived as random, serendipity, and accidental. Hoping to get innovative solutions that transforms markets from some magical “ideas,” means waiting for a coincidence, but winning the lottery would have far more chances to succeed than “finding” the right idea. Is this the end of an innovation center? Yes, already in many corporations. But it would not have to be that way. It is only the end of idea hunting, trend scouting, startup observation or acquisition, and similar activities.
REVISE YOUR INNOVATION APPROACH
Every market, every ecosystem, and every target audience has large amounts of unsolved problems. Solving those problems is what most unicorns do today. Lack of understanding of problems and needs is also a prominent reason less than 10% of startups make it to their initial round of funding.
Imagine you have a great idea that just popped into your mind and want to create a business with it. You craft a concept, maybe a prototype, and try to get funding from an investor. Any decent investor will ask these is first two questions: a) Who is your team? B) What problem are you solving?
|1) Who will be your customers?||1) You will understand almost immediately who the potential customers are|
|2) Why should they buy your product||2) The solution to the problem is why they should buy your product.|
|3) Why will they want it?||3) They want it to improve their work, life, or entertainment.
|4) How many people will want the solution (market size)||4) You size the market by knowing who and how many have the problem.
|5) How big is their appetite at the moment?||5) You can directly ask them how big their appetite is to buy it.|
|6) Do they have to change their behavior?||6) You can explore if there is any behavior change they need to make.|
|7) How significant will the impact be on your customer?||7) You can ask your current customers about the impact.|
|8) What would be their current or potential alternative?||8) You can explore your competitive advantage.|
|9) What would be your value proposition?||9) You can define a value proposition even before prototyping.
|10) What would be your business model?||10) You can have a unique business model when you go to market.|
Low likelihood to get product market fit
Very high failure rate
Very low likelihood for innovation financing
High certainty for a needProduct market fit can be quickly tested
Much reduced failure rate
High likelihood getting finance
Innovation Center Decision
While entrepreneurs may still try their ideas whether they get funding or not, for an enterprise, it is almost irresponsible to go on an idea hunt or idea-scouting to find random ideas. The probability that the “idea” is helping transform markets, transforming organizations, and bringing a significant elevation in how people or customers do things is extremely slim. Why bet resources on the least likely path to success?
Instead, when focusing on significant existing problems, most of the top 10 questions are answered based on the fact that there is already a consequential problem identified.
INNOVATION RISK PREVENTION
Shifting from idea hunting to problem-solving is essential to innovation risk prevention.
Why spend time, money, and resources to find a market that possibly doesn’t even exist or not know if the idea solves a problem? Focus on solving already existing significant problems.
Why you and not others?
Because usually, companies from all corners of the earth are not interested in solving problems but in selling what they have. Startups, on the other side, don’t want to build another existing solution but solve problems nobody is addressing. And as such, most successful startups grow into enterprises by doing precisely that. And on their way to the top, they displace older enterprises that were created before them.
The risk to get one day being disrupted and displaced is larger than the risk of failing to invent new solutions. But the remaining risk of failing can be significantly diminished when moving from idea hunting to solving existing and known problems.
Known problems can be managed – ideas cannot.
Moreover, once you have identified a significant problem, the anticipated outcome will be initially unknown, but the goal is so clear that you can strategically manage the innovation process. Market research, problem identification, ideation, concept validation, etc. Such an innovation process dramatically reduces the risk further. Neuroscience and Neuro Innovation help us understand how ideas for solving problems are composed; it helps us market into early adopters and finally re-invent so you will never stop innovating.
CAPITAL MARKET SHIFT
The capital market is a significant driver, shifting companies to embrace innovation, product and business model advances, and competitive advantages. Highly innovative companies like Tesla have a valuation allowing them to buy the Mercedes among all automobiles: Mercedes Benz. And this is one of the key motives for the C-Level to turn their otherwise well-running business into an innovative enterprise. Executives know that one of those random ideas will never create a billion-dollar market. They also believe that an idea, no matter how cool it may sound, cannot provide a significant competitive advantage to move the needle of their market cap.
- Reducing innovation risks by moving innovation from idea hunting to strategic and targeted breakthrough innovation efforts that are solving existing significant problems makes all the difference.
- Methodical innovation not only teaches how to make the start of an innovation effort smarter but also how to manage many other aspects including team assembly, innovation strategy development, concept validation methods, innovation financing, and much more.
- Modern innovation frameworks additionally increase manageability and success predictability not only in the solution creation phase but during the equally important innovation-to-market and scaling phase.
How did we get here? Our own, previous companies and the hundreds of companies we accompanied in their startup phase, later on, were determined to solve one problem – and one problem only. In our research, we could not find a single company that hoped to realize an idea, then find a market for it, and become successful.
The most successful VCs in this world invest only in companies that solve a big problem – for a reason. Our learning: Only when understanding the entire innovation journey from early innovation opportunity discovery, all the way to global scaling, success is very probable. Experimentation is the least intelligent way to innovate.
Axel Schultze, CEO BlueCallom
AI-Driven Neuro innovation solutions