Mitigating Product Innovation Risks with the Forge Innovation Rubric—Necessity and Significance (Part 1/5)
A diagnostic tool designed to help innovators identify and validate inherent risks in product innovations, thereby evaluating its market potential
Product innovations come with inherent risks, relating to untested hypotheses and assumptions like customer acceptance & motivation to buy the product, value being offered, and various other factors. Validating these risks, before the product is built, is crucial for startup founders to reduce the likelihood of the product failing in the market.
To mitigate these risks, at Forge Innovation & Ventures, we employ the Forge Innovation Rubric (FIR) — a diagnostic tool, developed by Vish Sahasranamam (Co-Founder & CEO, Forge), primarily for industrial hardware innovations/startups to identify, validate, and mitigate the risks and evaluate the true market potential for product innovations. FIR helps validate these risks through five broad parameters—problem necessity and significance, the novelty and originality of the solution, customer motivation to solve the problem, strong value proposition, and demonstrating proof of value.
Each of the five parameters is further divided into attributes, where innovators score their product using “evidence-based scoring,” meaning every score must be supported by concrete evidence. Through this process, innovators validate the assumptions and hypotheses underlying their product innovation, effectively transforming risks into opportunities. Any innovation can be scored between 0 and 100, with higher scores indicating greater potential for the product innovation to succeed in the market and vice versa.
This is the first in a series of five blogs that will explore the five parameters of the Forge Innovation Rubric (FIR) in detail. This blog focuses on the first parameter: Necessity and Significance.
Necessity and Significance
The first step in building an innovative product is to understand the Necessity for product innovation and the Significance of the problem. All the downstream activities — like customer development, crafting a value proposition, building the product, etc., would be meaningless unless the problem identified is not critical and significant.
“Solyndra, a solar panel manufacturer that received a $535 million US Department of Energy loan guarantee but ultimately failed, serves as a cautionary tale in startup failure. Their gamble on a specific, high-cost Copper Indium Gallium Selenide (CIGS) technology left them vulnerable when traditional silicon panel prices plummeted. The controversy surrounding the government loan highlights the risks of government intervention, while Solyndra’s demise underscores the need for clean energy startups to balance technological ambition with market realities and cost-effective solutions.”
To prevent such failures, the problem’s significance and necessity for a solution have to be scrutinised through multiple lenses, as outlined below:
1. Real-word application scenario:
Innovators often start with hypothetical problem statements that may be purely technical or highlight minor gaps in existing solutions. However, an ideal problem statement should address a real-world, unsolved problem and clearly define who is impacted — the beneficiaries. This ensures that the innovation is solving an actual need, not just what the innovator perceives as a problem, thereby increasing the likelihood of developing a solution with genuine market demand.
To illustrate this further, consider the following example:
India generates about 62 million tons of waste annually, but only 43 million tons are collected, and just 12 million tons are treated, leaving 31 million tons in landfills and posing significant environmental and public health risks. Forge-backed Energy & Sustainability Hardware startup Goenvi addresses this issue with its proprietary pyrolysis technology, which converts Municipal Solid Waste (MSW) into an alternative fuel source that can replace Light Diesel Oil (LDO) in industrial heating applications. Goenvi is essentially addressing a critical real-world problem rather than just making minor improvements to existing products.
2. Wide problem incidence:
Startups should aim to become high-growth ventures. To achieve this, they must address problems with wide incidence — those that offer large market opportunities. This enables them to scale quickly and become category leaders. Therefore, startups should focus on solving problems that affect a large number of beneficiaries across multiple industries and market segments.
An illustrative case within the domain of medical device segment is PlebC, a emerging health hardware startup supported by Forge, which addresses the critical shortage of radiologists with a Tele-Operated Robotic Ultrasound Scanner (TORUS). In India, total radiologists numbering only around 20,000, is faced with the daunting task of serving a population of 1.4 billion people. This imbalance results in a stark ratio of 1 radiologist for every 100,000 individuals, emphasizing a critical inadequacy. This innovative solution aims to optimize radiologist resources by offering remote support through robots, addressing challenges in suburban and rural regions with limited access to diagnostic services.
3. High severity/Impact of the problem:
The severity of a problem directly influences the willingness and motivation of buyers to seek and buy solutions. One key indicator of a problem’s significance is the extent to which users are already attempting to address it, and whether they are failing or are dissatisfied with existing solutions. Another indicator for this is to see whether the customer is experiencing significant financial losses due to the problem. Such users are likely to become early adopters of an innovative solution, driven by their urgent need to mitigate the negative impact on their operations.
Xyma Analytics, an industrial hardware startup backed by Forge has developed multi-point ultrasonic sensors for measuring temperature, viscosity, density, and level for high-temperature industrial applications, along with a plant asset monitoring system. A temperature measurement error of just 1°C can lead to significant losses for industrial companies. To illustrate, this minor deviation can cost chemical plants, refineries, and pharmaceutical plants $3K per hour, $200K per hour, and $200K per hour, respectively. Xyma Analytics has successfully implemented its solution across various industrial companies, delivering business value that underscores the high severity/impact of the problem.
4. User/customer validated use-case:
The attributes discussed above hold no value unless validated by a sufficient number of beneficiaries (potential customers) who are experiencing the problem. Through this validation process — assessing the problem’s significance, severity, and incidence — startups can iteratively refine their problem statement. This ongoing refinement ensures the problem is well-defined and maximizes its score in the Forge Innovation Rubric (FIR).
Startups following the traditional waterfall approach often fail because they don’t validate their ideas or innovations with customers early in the process. By developing first and validating later, they risk misaligning with user needs, which can lead to costly revisions or, ultimately, failure.
Abhaya Information Technology, a health hardware startup incubated by Forge, avoided this by validating HeartBeats — the world’s first WiFi-enabled wearable for real-time remote ECG monitoring — with over 25 doctors during development. This innovative device uses a cloud-based SaaS platform and AI for real-time detection and tracking of 19 cardiac abnormalities, including those related to strokes. With a 50% increased lifetime stroke risk over 17 years affecting 1 in 4 people globally, Abhaya’s technology addresses a critical need. By engaging doctors early, they aligned their product with market needs and successfully cleared Indian regulatory approvals.
Summary
Introducing new products involves inherent risks, making thoroughly validating assumptions essential. FIR addresses these risks through five key parameters, with the first being the necessity and significance of the problem. This is achieved by examining real-world scenarios, assessing problem incidence, recognizing its severity, and validating use cases. This process helps startups refine their problem statements, ultimately enhancing their product innovation’s likelihood of succeeding in the market.
