Selling Innovation – The Spark II

This is part of an ongoing series based on the highly rated book Selling Innovation, a guide to structuring a complete start-up revenue capture process.  The book is based on a day-long workshop held at the MIT Enterprise Forum in partnership with Microsoft.  Sections of each chapter will be shared here on The Startup Growth Blog.  Download the complete eBook, blog readers get a special 25% discount with code JA49Y.  

Disruptive vs Incremental Innovation

Truly disruptive innovations do not occur often.  For among other reasons, there are only so many adopters in any given market willing to continually try radically new products and services.  Disruptive Innovations can only target the much smaller early adopter segment of the population, and it requires its users to accommodate the new information or way of doing things into their daily lives.  But while re-shaping the dynamics of a marketplace may seem attractive, many a fortune has been built on incremental innovation.

Incremental innovation is an add-on, value-adder, or after-market creation that has clear application as part of an existing innovation or platform.  It is often easier to sell because adopters need only assimilate a marginally new framework of thinking or doing to find value from the innovation.

There is another key aspect to ‘disruptive innovation’ that all innovators need to keep in mind when the spark of innovation is forming in your mind.  While an innovation may be disruptive to a particular market or industry, the term disruptive is not a value proposition to most people’s ears.  Never before has a user thought their life is too easy and what they really need is to have their safe, familiar patterns of behavior disrupted.

Remember your elementary school days when one kid in the class got sent to the principal’s office because s/he was being ‘disruptive’?  Disruptive is not always good.  In the example from Harvard Business School professor Clayton Christensen’s the Innovator’s Dilemma, the mini-mills in the steel industry generated great wealth and opportunity for those people who had a vested interest in them.  But there were thousands who worked and gained from traditional mills who were thrown out of job, lost value in their stock portfolio, or otherwise did not benefit from the disruption in the marketplace.  This is not to say that it should not have happened or that innovation is a bad thing.  Rather, especially when selling an innovation into a mature market place, what you are selling may threaten someone else’s job, a way of doing business, or even an entire company.  Resistance to buying may have little or nothing to do with your innovation.

Disruptive innovations are also often first to market, but first-mover status seldom translates into sustained sales advantage.  Few first movers have been able to capture and sustain market share, even ones that were able to scale.  Google was not the first search engine.  Facebook was not the first social networking site.  The iPod was not the first hand-held audio player.  Each evolved from prior iterations of a comparable, but perhaps less sophisticated or less well sold, innovation.

Innovation goes in waves.  As markets mature and successful sellers establish dominant position there are myriad opportunities for disruption – a better way of doing business, a faster tool, a bigger device.  These moments used to occur only every decade or two.  Over the past few decades the cycle has shortened to five or seven years.  And technology now allows innovators to bring solutions to market faster, cheaper, and to a larger audience than ever before.  But if the goal is to become a successful innovator and not a clever inventor, it may be best to wait until the market has told the innovation community exactly which disruptions its willing to live with, much less buy.

As the waves of disruption evolve, innovators can monitor prior efforts to see how certain products with definable features were adopted by customers, and make refinements to better address a now clearer market need.  Eventually, an innovation is layered on top of an existing way of doing business, and integration points emerge among once disparate innovations, which enable new ways of doing things that were once not possible.  Social networks, for example, were once an innovation separate from smart phones, and innovations in each market attracted interest from early adopters and venture capital.  Now, more pictures are taken using the iPhone and posted to Facebook than using any other photographic device.

Scale is also reached at this point of convergence creating larger commercial opportunities.  Incremental innovation becomes easier to identify, quantify, and sell because data exists and can be analyzed to determine the most cost effective path to market, ideal delivery mechanisms, customer service requirements, feature sets, and even price.  Remember, innovation is not invention, and as the old saying goes, ‘pioneers die with arrows in their backs, farmers die rich’.   Being a ‘fast follower’ rather than a disruptor may not be seen as exciting, but it’s a much more reliable path to success paved by giants of commerce.

Is it innovative to be a fast-follower?  Ask Bill Gates, Steve Jobs, or Mark Zuckerberg.  Can incremental innovation lead to success?  Consider Dell or Tesla Motors, were they the first with their innovation?

  • Before you launch or pitch your innovation ask who might be upset or disrupted by your innovation?
  • Download the complete Selling Innovation eBook, blog readers get a special 25% discount with code JA49Y.  
  • Or buy the Print Edition on Amazon

Selling Innovation – The Spark

Every innovation is born from a spark of creativity.  The spark can be for an entirely new product concept, refinement of an existing product, or radical re-design of a something that is already in the market.  The spark can come from years of experience in a particular industry, a dramatic personal experience, or just creative brilliance.  The one place a spark of innovation cannot come from is a vacuum. 

This is part of an ongoing series based on the highly rated book Selling Innovation, a guide to structuring a complete start-up revenue capture process.  The book is based on a day-long workshop held at the MIT Enterprise Forum in partnership with Microsoft.  Sections of each chapter will be shared here on The Startup Growth Blog.  Download the complete eBook, blog readers get a special 25% discount with code JA49Y.  

The Spark

Every innovation is born from a spark of creativity.  The spark can be for an entirely new product concept, refinement of an existing product, or radical re-design of a something that is already in the market.  The spark can come from years of experience in a particular industry, a dramatic personal experience, or just creative brilliance.  The one place a spark of innovation cannot come from is a vacuum.

  • “Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan Press On! has solved and always will solve the problems of the human race.”  ― US President Calvin Coolidge

Innovation is a process, a collection of concepts fused together over time, refined and refined again until the optimal set of features delivers just the right value to a customer at a price they are willing and able to pay and which makes profit for the seller.

Serial innovators know that the first spark of innovation, while compelling at the moment, seldom reflects the final product that successfully penetrates the market.  Bringing an innovation to market takes time, focus, resources, and persistence.

There are many great inventors in the world today, but only a few great innovators.

Insight and Innovation

There is a difference between an innovation and an invention, however.  An invention is a new technological breakthrough.  An innovation is a better way of doing something, a way to break or disrupt a current paradigm.  It can be a technological break-through, a process improvement, or a new object.  But no matter how clever, if it sits on the shelf or gets studied by a very small group of people it may be more of an invention than an innovation.

If you are going to become a successful innovator you must first start by identifying a high-value problem, and then build a solution that solves it.

There is no shortage of would-be entrepreneurs who believe they have created a new and unique invention.  No one needs a better mousetrap, but everyone needs a better way to solve the problem.  If you built the most effective mousetrap in the world but  found that sales of cats had virtually eradicated the household mouse problem, what is the value of your innovation?

When you‘re ready to start designing an innovation, you want to think about the larger market, so you can assess its impact in the next larger context than the one you are currently playing in.  This is the framework you will need to explain your innovation to others and eventually to sell the innovation in the market.  It enables a person reviewing your innovation to evaluate it with some familiar points of reference.  It helps your prospective buyer grasp how your innovation will solve their problem.

Understanding the context of your innovation is also important to the future selling process because it is the first indicator of optimal target market, level of receptivity, and frame of reference among potential users.  If you create a totally new, different, unique innovation that has never come before there is no frame of reference users can draw upon to make a buy decision.  While the iPhone was a disruptive innovation in the mobile phone and software industry it didn’t compare to the disruption caused by the introduction of the telephone into the consumer market in the early 1900’s.  Likewise, a Prius is an innovative new type of hybrid vehicle, but it’s still a car that takes you from point A to point B.

As you move from creation to sales, the context in which you created your innovation will be critical to convincing investors, customers, and even prospective employees of the value of the innovation and buy into your vision.

How you sell your product or service will be impacted by the foundation of your innovation.  Some products are borne from years of experience in a specific industry that yields a keen insight into a need in the market for a new or better way of doing things.  Other products come from blue-sky thinking; from an inspiration into what people might want, use, or enjoy that is radically different from anything they have experienced before.

How do you know when your initial spark is more of an invention or an innovation?  When innovations are born from a specific market need, descriptions tend to be value statements that reference the problem being solved.  Efforts to sell an invention often focus on descriptions of features and function of the product.

  • What are the changes in market dynamics that your innovation addresses?

Selling Innovation

This is the first in an ongoing series based on the highly rated book Selling Innovation, a guide to structuring a complete start-up revenue capture process.  The book is based on a day-long workshop held at the MIT Enterprise Forum in partnership with Microsoft.  Sections of each chapter will be shared here on The Startup Growth Blog.  Download the complete eBook, blog readers get a special 25% discount with code JA49Y.  

Introduction

By John Harthorne, founder & CEO of MassChallenge

The world needs innovators and entrepreneurs who can sell.

Entrepreneurs are our value creators and problem solvers. Their nimble, high-growth companies create most of the world’s highly innovative technologies and groundbreaking solutions. More often than not, it is a startup that first determines how to extract energy from high altitudes, or from the ocean’s waves, or even human waste. More often than not, it is a startup that first figures out how to teach kids math using basketball or how to build the most intuitive mobile games. They build off-road wheelchairs, grow farms in freight containers, track migraines with cell phones and draw clean water out of slightly humid air. Take any problem in the world, and you can be certain that numerous entrepreneurs are working tirelessly on solving it, and that a few of them will end up revolutionizing a long-established industry.

Startups are also creating jobs. Early-stage ventures are responsible for virtually all net job growth in the United States, as confirmed by The Kauffman Foundation: “Net job growth occurs in the U.S. economy only through startup firms.”  Since 1977, established firms have lost 1 million net jobs per year, while startups in their first year added an average of 3 million jobs in aggregate. This trend has spawned scores of innovation centers and business plan competitions as governments, educators and the private sector world-wide work towards supporting this critical part of local economic development.  We need job growth, we need it now, and startups are the solution.

But launching a startup is difficult. Many innovations never get to make that impact and generate those jobs because too many innovators struggle to find the right resources before running out of time.  To succeed, entrepreneurs need access to advisors, talent, suppliers, lawyers, office space, equipment, funding, and other resources. Most importantly of all, though, startups need customers.

Customers are almost always the single best source of funding and growth. Customers are demanding. They force you to build what they want, rather than investing in the development of a large, complex “science project.” They keep your company alive and focused and, if they like your product, they buy more. Customer money is the cheapest, most productive form of capital on the planet.

Innovation can provide solutions to many of the world’s most challenging problems. Selling that innovation is what reifies the founding vision, establishes the desired impact and initiates serious growth.

The world needs entrepreneurs and innovators, and they must be great at selling their innovation.