Hunting the Big Innovations – perhaps you’re asking all the right questions, but not in the right order!
I recently wrote about the challenges of breaking into established purchasing behaviour. Of course, this all about the fundamental task of innovators – to develop products and services with a valued point of difference, a USP that delivers a solution to an unmet need that is appreciated by the end user.
Given this, I wonder whether we need to take a different approach to assessing where we innovate. As an in-company researcher I used to analyse trends, assess market size, look at competitor strengths and weaknesses, plot target consumer segments… and came up with target markets for innovation.
All with a potential ‘size of prize’ based on a share of the market that could be captured. Having agreed the prize, only then would resources be allocated to set about developing products and services to win that share. I wonder if I started in the wrong place. Rather than asking ‘where is the market going and growing?’ perhaps I should have been asking ‘where are the problems that need a solution’?
I work with a few small entrepreneurs – in pretty much every case they start out with an idea, something they see as a solution to a real problem. None of them analysed ‘market potential’ first. It was only once they had a great idea that they started to work through the data to see if they could build a plan that was worth investing in (to be fair, many of them were ready to skip this second step – that’s where I came in!!)
So, should we all start our quest for innovation success by hunting out problems, rather than analysing ‘big data’? Of course, once we have found our problem we need to be sure that it can be solved by our brands and capabilities (better than a competitor can) – or that we can develop the necessary capabilities to ‘win’. It’s only at this stage that we should then start to analyse the size of the potential opportunity. If it’s not a big enough opportunity, or looks too expensive to realise, we have to hunt for other problems and solutions, again and again, until we find the big problems with big opportunity.
The alternative is to run the risk of falling in love with a big fat market opportunity and develop, all too often, ‘me-too’ products and services that we end up convincing ourselves have potential. Take the example of banking. Yes, the market for bank accounts is enormous and, if just 10% of us were to switch to a new bank account the prize is large… but perhaps there are just too few of us who are that fed up with their current provider, or we find the process of switching too much of a hassle, to really be bothered to switch. There is no problem that needs to be solved that is valued by users, no gap in the market and no market in the gap.