Opine Consulting » New product development

After Eureka: 7 questions to test innovation for big and unreasonable profit potential

Simon Kirby — Thu, 08 Apr 2010 06:08:37 +0000

Logical frameworks are wonderful for shaping new ideas and explaining innovation to corporate sponsors, venture capitalists, bank managers and spouses. But they have their limits.

“Irrational passion is the key change agent of our economy.” – Seth Godin

Right brain frameworks like this one aren’t the key to creating transformative innovation, but they help to polish and explain the idea.

Seven key innovation questions

There are the seven questions to ask about any new innovation:

Is the market attractive?
What customer needs does the innovation meet?
What’s the proposition?
How can we lock out competitors?
Is it do-able?
Can it be profitable?
Is it strategic?

Is the market attractive?

“I have determined that there is no market for talking pictures” – Thomas Edison, 1926.

The market is a set of external, immutable forces acting on your idea. You need to think about:

What’s the size and value of the market?
What share is realistically available?
Is the market changing, growing, shrinking or consolidating?
Are there any unprecedented changes or discontinuities like new legislation, new entrants, disruptive technology or other tipping points that could transform the market in your favour?

What customer needs does the innovation meet?

“If I had asked people what they wanted, they would have said faster horses”, – Henry Ford.

But ultimately, what Henry Ford’s customers needed was to get places faster. The Model-T met a strong, unvoiced customer need. Ask yourself:

Are my customer needs clearly defined, strong and unmet?
Are there unvoiced customer needs?
What’s it worth to the customer to meet those needs?

What’s the proposition?

A proposition describes the sum total of benefits that a customer gets from a product or service. For me, one of the ultimate proposition statements of all time was Apple’s “one thousand songs in your pocket” tagline for the first iPod. To develop a great proposition, ask:

Is the proposition clearly defined?
Does it meet strong customer needs?
Is it different from what competitors offer?
Is it interesting?

Can I lock out competitors?

It’s not enough to be a first mover if you have powerful competitors that can overtake you. To lock-out competitors, ask:

Is the innovation patentable? Or is there any other intellectual property that can’t be substituted?
Can I use or build a powerful brand?
Are there any scale economies and can I get big fast enough to benefit from them?
Do I have an insight, knowledge or skill that’s rare and significant to the innovation?
Can I build exclusive partnerships?

Is it do-able?

Imagination often exceeds capability. See my post on premature genius. To avoid premature genius, think about:

Who needs to be asked what to understand if it can be done?
Are there precedents that suggest it’s feasible?
Can it be done at reasonable cost?

Can it be profitable?

As Gary Hamel observed, “growth is the scoreboard, not the game”. Profitability is the outcome of innovation. But, when it comes to drawing up forecasts and valuations ask:

What businesses are comparable? How much do they make and what are they worth?
How risky are the cost and revenue streams?
How many revenue streams does the innovation generate? Generally, the more revenue streams, the less risky is the idea.

Is it strategic?

If you’re working in a big company, you’ll need to answer this too. Strategy is either brutally simple (if it makes money, it’s a fit) or inscrutably complex. Many strategy academics, take a resource based view, which means answering:

What core competency would the venture deploy?
How does it fit or leverage brand or distribution strengths?
Does it use proprietary processes, skills and know-how?

Be a storyteller, not an analyst

“Innovation is not the product of logical thought, although the result is tied to logical structure” -Einstein

Use this framework to shape and develop your thinking but not to constrain it. When you communicate the idea, use the facts and analysis. But don’t be limited by them.

Be a storyteller, not an analyst.

How to have disruptive ideas

Simon Kirby — Sun, 21 Mar 2010 00:53:53 +0000

A folding plug won the Brit Insurance Design Awards in the UK this week.

As gadgets get smaller, Britain has the largest plug in the world. A problem, brought to life in this video:

The traditional British plug was invented in 1946. Why did it take 64 years to invent a better one? More importantly, why didn’t any of the rest of us have that idea?

Listen to what nobody says

I think the reason is that it’s so hard to find unvoiced customer needs. No British customer has ever said to a product designer “I’d like a more portable electric plug.” Not even to the inventor. Instead the designer, Min Kyu-Choi, had an experience; he scratched his new laptop on its plug.

Their are so many ways to trigger the inductive leaps that create innovative new products. But for me, the best one is to have direct experiences. The easy part of that is that we all of us have experiences continuously. When my alarm goes off, that’s a customer experience. When I get on the train, it’s a customer experience. Buying my morning coffee – an experience. They all come bundled up with satisfaction and frustration.

The hard part is noticing the response rather than accepting the “how things are-ness” of it. One of the best ways is to keep a record of what happens – mark up every experience on a timeline and plot your emotional response.

Not taking problems for granted is the first step towards great product design.

Design for experience, not features

Simon Kirby — Tue, 26 Jan 2010 22:51:25 +0000

The problem with product development

The iPhone is one of the least usable phones for sending text and email but gets the highest consumer satisfaction of any smartphone. Why? It’s product design that’s based around experience not features.

Small usability, big love

An average iPhone user makes almost three times more errors per text message than someone using a hard-key QWERTY phone (see
usercentric.com). But googling the terms “iPhone love” gets about 336 million results and the iPhone has higher customer satisfaction than any other smartphone (see JDPower consumer research, here
).

Experience not features

It’s not just less usable. If anything, the iPhone has less features than many competitors. Mobile email, voicemail and mobile web browsing are hardly new, you can’t forward a text or voicemail and the camera is positively primitive.

But it does have Apple’s trademark obsession about experience. This isn’t just in the fluidity of the interface or the resolved simplicity of the case. If you buy one in an Apple store it will be “served” to you with a flourish like Michelin-starred food.

Product developers spend lots of time benchmarking product features and prioritising them using techniques like conjoint analysis. What we need to do more of is design, customer ethnography and journey mapping to build experiences out of our products.

How to time product launches perfectly

Simon Kirby — Mon, 25 Jan 2010 17:59:25 +0000

Here’s a contrasting tale of two Apple products that struck me recently. Wired Magazine carried a story about Apple’s 1983 design for an ‘iTablet’ here. Twenty-seven years later and the iPad is finally launched. In 1989, Apple did start developing the Apple Newton, an early personal digital assistant. Despite brilliant, breakthrough functionality, the Newton was canned in 1998, following a prolonged commercial flop.

Premature genius and the art of timing

The change curve in product development

Premature genius is one of the most overlooked challenges of product development. To visualise the problem, think of a change curve. Launch too early and no amount of marketing and development spend will get you to take off. Launch too late and you may not catch up with competitors.

There’s an important nuance in the story about the Apple Newton. It may have seemed like a failure. But, an ex-Apple staffer tells me that there’s a direct line of sight between the technical and human lessons which Apple learned on the Newton and the huge success of iPod and iPhone. No Newton, no iPod, no iPhone.

Three key disciplines for perfect launch timing

New product development needs to be framed in the present and future. There are three key disciplines for achieving that:

Trend analysis. Create private foresight out of public knowledge by identifying precisely what trends affect your product idea and understanding exactly where you are on the change curve.
Invest in corporate memory of rejected ideas and failed products. Put in place structured PRINCE2 style lessons learned documentation. Put old concepts on ice and review them regularly.
Identify the modular“components” of innovation be it an insight into customer needs, a process or technology. An entire concept may not have worked, but many of its building blocks could be entirely sound.