Putting Theory Into Practice Part 3: What we know and don’t know – framing the opportunity
In part 2 of our innovation saga Teknovantage innovation team identified what appears to be a promising opportunity but they also realize that ideas don’t emerge perfectly formed from the initial concept and further the reasons most products fail are due to marketing or market-related reasons including the development of products the customer did not want and the development of ‘me too’ products.
For Teknovantage this market opportunity is also in their “white-space:” uncharted territory well beyond the company’s core business (see Mark Johnson’s excellent book called “Seizing the White Space – Business Model Innovation for Growth and Renewal). Teknovantage’s senior management isn’t willing to just dive into their white space without “reasonable” evidence that the opportunity is real and they can compete and win in the yet to emerge market arena. But how do we find reasonable evidence?
Though Teknovantage and their “location-aware” tools are fictitious, their predicament is very typical of many of my clients and my own situations that I have personally faced in a similar role as our story character Linda Cantor introduced in part 2 of our saga.
To seize the potential white space we uncovered using the “job-to-be-done” marketing lens where we defined an initial job statement (i.e.: “Construction workers want to find missing tools quickly when working in messy and cluttered work sites” ), we will first use “design thinking” to formulate a business model based on our best assumptions. These assumptions – especially the critical assumptions – are the heart of their discovery based innovation process.
If this is truly an innovation and “new” product – we will have plenty of unknowns ahead of us that need to be discovered and addressed in a predictable and purposeful process. Iterative discover based innovation is all about learning quickly and inexpensively and making the best possible decisions using real customer feedback and learned market insights as we go. We “assume” that an attractive business can evolve because we believe “construction workers want a better solution to not losing tools in the first place and when they do lose tools – a better way to find them quickly.”
We will use design thinking criteria as an iterative design and development learning frameworkto transform the idea into a market success. Recall from an early blog (March 5, 2012), there are three criteria that a new idea must address to be a market successes. Borrowing terminology from Design Thinking – the framework consist of three overlapping success criteria: 1)Desirability: a value proposition that makes sense to potential customer. It’s critical that we think in terms of the customer – what jobs he or she is trying to get done by hiring the product. 2)Feasibility: what is functionally/technically possible within the foreseeable future. 3)Viability: what is likely to become a sustainable business model.
We have a job statement we believe solves an important job better than any solution currently available on the market. While yet to be tested and validated we have potentially met the first criteria of pursing a product/solution that is desirable by a set of potential customers. Of course we know our initial idea will evolve as we test our assumptions.
In regards to feasibility – our whole innovation journey started with a technology idea within our technical grasp that we could apply to potential “jobs” people want to get done. Most likely there will be technical development challenges that lie ahead that will need to be addressed. Thus a technology feasibility and proof of concept test plan will be created.
It’s very important to note that we want to move forward in parallel in developing and proving the technology, but we don’t want is to start an expensive development project and assume we know exactly what the customer wants (i.e. requirements and for worse yet detailed specifications) until we know that a real market opportunity exist and we have a fundamental understanding of the customer’s situation and how to make it better. In other words – we don’t want to create a “solution looking for a problem.”
As with all phases of the iterative process, the technical development and proof of concept also need to follow a learning process – prototype, test, learn and refine/rethink as we go. And design to the context of what we uncover and learn in our voice-of-customer experiments and inputs.
Finally we need to address the viability of the opportunity. Is there really a future business opportunity out there if we can launch the product? Who truly are the customers? How to we reach them and educate them and help them make a buying decision? (Educate because they have never seen the innovation before.) What’s the revenue stream or streams? In short what is the business model that will provide us the most efficient way to create and deliver value to customers and our shareholders?
In our next blog will talk about the elements a business model and identifying the key assumptions we will make to formulate a potential winning strategy – and how to manage the uncertainty and risk of things we simple don’t know yet and/or don’t understand yet.
Till the next time, keep innovating for the love of it!