Most innovation is done with the best of intentions and possibly even answers some unmet need appropriately. However, in an age where marketing messages are flying fast and furious, even good innovations drown in the noise. So how does one keep from death by drowning?
Years ago I argued with a bunch of avante garde friends who had a unfortunately philosophic bent of mind about the need for innovation of experience. Many of them were happy with the status quo on experience and did not require that special extra zing of “new”. Now, “new experience” is the essence of viral, a clear indicator of market expectation, and the only way to survive death by drowning. If you were blown away by the first Matrix movie and you thought the second and third ones were merely more of the same, you know exactly what I mean.
If you have not heard the word “Innovation” or “Disruption” today … and every day … then you are living somewhere underwater! Most everyone in business today is saying, looking for, or working on “Disruptive Innovation”. One can probably attend a meeting or webinar about it on a daily basis. And yet, as a concept it is defined in examples or in an overly pedantic manner. So where is one supposed to put one’s efforts and money?
If you invest in or build businesses, there are a huge number of factors to consider before you decide to go in. It is likely that your metrics for that decision are about business type, value proposition, market opportunity, viability, team, and / or your heuristic read of the combination of all of these. However, somewhere in the decision process there is a moment when you might stop to consider what about this proposal is likely to set the market on fire. And the gauge for that question is indeed “disruptive innovation” or what in the proposal is a paradigm shift.
Many perspectives about innovation have been published. Possibly, the most popular and well known is Clayton Christensen’s talk and illustration:
Here is an article from the Harvard Business Review that attempts to define different types of innovation based on the need to solve a problem and the available skill sets. The rabbit hole gets deeper! Try deciding which of 14 types of innovation or combinations thereof or the 6 other bases to categorize and approach innovation are worthy of your investment.
Lets first consider a few known disruptors:
1. Remember BlackBerry? Remember the Palm Pilot? Remember what happened to them when iPhone brought a touch interface experience with pinch/expand? Blackberry has been declared dead many times and the iPhone completely reset consumer expectations of a mobile phone.
2. The restaurant business is notoriously difficult to survive in. There is constant churn … even in your own back yard. Have you ever heard of the restaurant El Bulli … and the spherical olive?
Due to this paradigm shift in experience, at its absolute height El Bulli had 8M reservation requests for a yearly seating capacity of 8000 seats. The experience innovation of molecular gastronomy differentiated El Bulli to the point of cult status.
3. The transition from silent movies to the “Talkies” is another example. The change from silent to with-sound was neither easy nor swift. Read here of all the issues encountered. However the overall experience delivered was undeniable and the industry never looked back!
4. Kodak was king of film and even invented digital photography … but failed to enter the market. This is a slightly different example. This is less direct experience and more utility and cost. However, digital added so many advantages to the photographer’s experience it actually enabled the democratization of photography. Apart from the initial camera cost here is a comparison of how digital photography comprehensively beats film and disrupts it.
Here is a simpler and more practicable way to look at the types of innovation:
1. Experience Innovation – A new and unexpectedly rich or enabling experience can go viral without too much marketing and create demand just because of the appeal. Further, such an experience sets user expectation and the competition has to scramble to match … or die.
2. Process Improvement – Typically, these are meant to enhance existing procedures and help with scale. Unfortunately they must be de-risked for scale as well as to inspire large deals and customers.
3. Revenue Model – Business advantages, increased revenue or cost appeal can be garnered with these innovations. However, it requires changes to stakeholders and management of the stakeholders while the revenue model achieves scale.
4. Brand New Idea – Completely new products or services are great. They are also the highest risk and potentially greatest value. However, without appropriate combinations of the first 3 types of innovation thes will be unlikely to gain traction.
Whether building a business or investing in one, a combination of the above types of innovation is hopefully afoot. Even so, gaining traction on shoestring startup budgets is probably one of the biggest challenges. A hefty amount of Experience Innovation is good magic for both the customer and the entrepreneur! “Disruptive Innovation” is easiest achieved by innovating the experience and by setting and delivering to much higher expectations!
However, it is important that these innovations to the human experience are also utilitarian and not merely occasional indulgence. If the pinch and expand of the touch interface had not lent itself to everything from web pages to maps to pictures it would not have been such a paradigm shift. Also, such innovations must be easy to access and partake for the end user. No product or service that requires people to jump through hoops will ever gain immense popularity. If the sound was not synchronized with the visuals and the viewer was forced to navigate the asynchronous audio and video, the Talkies would have never caught on. Lastly experience innovations must allow for operational scaling! What if El Bulli had found a way to service 1 of the 8M reservation requests instead of just 8000 per year?
Henceforth, entrepreneurial proposals should self-identify the type of innovation they fit and what if any experience innovations they have wrought! They should also diligence themselves on breadth of utility, ease of adoption and scalability.