Where True Innovation Happens

If you’ve been in start-up land long enough, one word you’d hear thrown around a lot is Innovation. Innovation is the lifeblood of the tech industry. It’s the reason we have sleek new smartphones every year,? social media platforms that? connect us across the globe, life-saving technologies? that? improve our overall well-being and a certain sense of hope that someday, we may get a million people to Mars.?

Heck! Innovation is why we have our jobs - or, the reason some of us don't. ????

In recent years, we’ve witnessed A.I become the poster boy of innovation across several industries and how a 3 year old company could give global giants a run for their money and reasons to be concerned.

According to a 2019 McKinsey Global Survey on innovation, 84% of CEOs believe innovation is critical to growth yet, 80% were concerned that their business model is at risk with only 6% of CEOs satisfied with their innovation performance. There’s a clear gap between perception and reality when it comes to innovation.

So, what truly is innovation and where does it come from? Is it technology which sounds too good to be true, or the result of a methodical process developed by corporate giants?

This article will explore the three key factors that contribute to true innovation and how founders can cultivate an environment where these factors can thrive.

According to Mike Pinder,? true innovation happens at the intersection of three key factors: desirability, viability, and feasibility. To help simplify this further, consider these questions in your business design thinking;

• Is this innovation human-centric enough?
• When it comes down to PnL, what is its economic significance in green bills?
• How realistic is this innovation today? Why now?

True innovation happens where there is an overlap between ideas that are desirable (to customers), viable (from a business perspective), and feasible (technologically possible) and when this framework is implemented in a certain sequence. This is the innovation sweet spot - the only place where founders and businesses can successfully commercialise their new ideas.

I have witnessed a growing number of startups set themselves up for failure right out of the park. Typically, they start with a business model and fancy tech, then scramble to find customer needs at the end. This results in products nobody wants, overly optimistic business plans, and impressive tech with no real application.?

This is where it starts to go wrong. Innovation only ever occurs when this framework is implemented in a certain sequence;

The Three Circles of Innovation

1. Desirability (Human):

Desirability is venture building 101. It is what has made global giants like Amazon stand out amongst its peers. It is the human-centered aspect of innovation which is the core of which innovation happens. It is going beyond merely satisfying customers and instead obsessively focusing on exceeding their expectations.

Innovation starts here.

Desirability taps into the core human element of innovation. At its essence, desirability in business design and thinking revolves around the simple yet profound question: Does it resonate with people? it's about understanding what motivates people, what pain points they experience, and what hidden desires they possess.? By addressing these fundamental needs and aspirations,? innovations can become truly transformative.

The human-centric approach to design and business thinking places the user at the forefront.? Business design and thinking thrive on empathy. Human-centricity is the guiding light in verifying desirability. As a founder myself, there are two key frameworks which I believe to be very powerful tools for uncovering desirability for an idea;

My personal favourite is the The 5 Why framework (and i use this in everyday problem solving). This approach offers invaluable insights by delving five layers deep into the "why" behind user behavior just like with root cause analysis to understand user needs.?

For example, a customer complains about long checkout lines. Why? They dislike waiting. Why? They value their time. Why? They have busy lives. By peeling back the layers, you unearth a deeper need for convenience and efficiency.

Secondly is the Jobs-to-be-Done framework which focuses on the tasks users are trying to accomplish. This framework highlights the gap between what users intend to do and the frustrating reality they often face and and by understanding the "jobs" users need done, this allows you, as the founder, to stay agile and design solutions that effectively address those discrepancies.

Desirability is not a static target; It's a constantly evolving target that demands ongoing reassessment.

LIFE IS TOO SHORT TO BUILD SOMETHING NOBODY WANTS - ASH MAURYA

2. Viability (Business):

So, you found a gap in the market. Your desirability test checked off correctly however, it doesn’t stop there. It's about viability: the cold, hard reality of whether your brilliant idea can actually make money. Here's the bottom line – can your innovation stand on its own two feet and generate a sustainable profit?? This is where the rubber meets the road, where we translate innovation into green bills.

Think of viability as the bridge toll –? the cost of crossing over from an idea to a thriving business.? Just because a bridge can be built doesn't mean enough people will use it to justify the construction (viability). Will people pay to cross it?

Viability is the economic engine that fuels innovation in the long run.

Now, don’t get me wrong, innovation shouldn't be stifled by a relentless pursuit of profit. But a healthy dose of reality is essential. There's a difference between a groundbreaking idea and a financial black hole. Viability ensures that innovations not only solve problems but also create sustainable value – value that translates into revenue streams, cost savings, or a combination of both.

A truly viable innovation considers the long-term economic picture.? Here are some additional factors to consider:

• Market Potential: How big is the market for your innovation? Are there enough potential customers to generate a sustainable revenue stream?
• Cost Structure: Can you produce and deliver your innovation at a cost that allows for a healthy profit margin?
• Competitive Landscape: What existing solutions are there, and how will yours compete? Can you create a unique value proposition that justifies your pricing strategy?
• Sustainability: Does your innovation have a positive long-term impact? Consider environmental and social factors alongside financial ones.

Ultimately, the goal of innovation isn't just about financial gain.? It's about creating positive change and solving real problems. But let's be honest, financial sustainability allows us to keep innovating, to keep making a difference.? A viable innovation is one that not only makes a splash, but leaves a lasting ripple effect – a win for society and a win for the bottom line.?

3. Feasibility (Technology):

Desirability sets the course for innovation, but it's feasibility that builds the bridge to get us there. Here's the challenge, and the opportunity: identifying the "why now" moment.? When does an idea tip from far-fetched fantasy to feasible game-changer???

Think of feasibility as the bricks and mortar – the nuts and bolts that turn an idea into a tangible reality. Can this ingenious solution we've envisioned actually be built?? Does the technology exist to bring it to life, and do we have the resources to make it happen?

Feasibility is all about timing.? The most brilliant ideas might be ahead of their time, limited by technological constraints.? Think of Elon Musk's Hyperloop – a futuristic transportation system that promises lightning-fast travel.? The desirability is undeniable, but the feasibility hinges on overcoming engineering challenges related to maintaining a near-vacuum environment and ensuring passenger safety at such high speeds. While significant progress is being made,? widespread adoption might require further technological advancements.

Feasibility is all about playing the hand you're dealt.? By honestly evaluating these factors, we can identify the feasibility gap – the distance between the current state and the resources needed to make the innovation a reality.? The good news?? This gap is constantly shrinking.? The faster technology advances, the more those "impossible" ideas become feasible today.

By understanding the current technological landscape,? the resources at our disposal, and the limitations that exist,? we can identify innovations that are ripe for the picking – ideas that can be built upon and brought to life with what we have today.

The Three Circles of Innovation is a framework used to assess and develop successful innovations. An idea that falls outside these circles only leaves founders creating more risk and uncertainty - adding this to the already existing risk of leaving a 9-5 for building from scratch.

For new businesses and concept design, irrespective of whether this happens as a startup or part of a corporate organization, grounding the needs and problems and solving for the right things from the start can help us find that sweet spot of innovation.

Remember, there’s no “wuru wuru to the answer” here.

Successful innovation? requires a? careful? balancing act of identifying? desirable problems,? developing? viable? solutions, and? ensuring those solutions are? grounded? in? technological? possibility.

Till next time, keep building. ??