What does innovation look like at the beginning? When is innovation over? And what lies beyond innovation?
To answer these questions, we need to start from the basics: What is innovation?
Innovation is bringing an invention to the market, where it can have an impact.
On the market, impact is exchanged for some other form of value, like attention or money.
Having observed innovation happening over and over again over the years, patterns have emerged, and it became clear that innovation is a process in 3 major steps that are straightforward to describe:
- Ideation and Invention
- First User Testing and Refinement
- Market Launch
Afterwards —if the timing is right— it's about creating impact through scaling based on specific growth metrics.
1. Ideation and invention
The first step of innovation is the most exciting, because of the joy, the passion, and how suddenly an invention arises to consciousness, opening up landscapes of hopeful possibilities. It’s the realization that combining elements in a certain way can provide enormous benefit to many people. It’s a better, faster, cheaper way of doing this. It’s a breakthrough idea.
Ideation is a generation method that can be active or passive. In active ideation, an idea is sought with intention. Everything is observed in view of invention and innovation. The radar is always on. Many methods exist to provide a structure to this approach, increasing the chances of success , like the Human-centered Design Methods of the LUMA Institute or the first part of the Google Design Sprints. On the other hand, passive ideation is unpredictable and more exhilarating, because the idea seemingly pops out of nowhere. Both the active and passive approach can result in the “AHA!”-moment. Ideation and invention are what most people associate with innovation, probably indeed because of the excitement and the association with geniuses of the past, like Nikola Tesla and Leonardo da Vinci.
2. First user testing and refinement
An inventor can too easily find value in the own discovery, but it’s the impact on users that will transform it into an innovation. The goal of this second phase of the process is to find first glimpses of impact. Does it really work? Would people actually buy it? Do they get it? Am I crazy? “Wow”s and “Aaah”s are typically good signs. If people don’t get it, it’s up to the inventor to go back to the drawing board, even if it’s just to reframe the explanation and demonstration.
In this sanity check, the number of users is relatively small, and there is a tight feedback loop, in order to make the most of each test. in the next phase, the invention is spread out beyond control. More cruel, more real.
3. Market launch
Now it’s time to make the invention available to a larger audience.
Done? Well, congratulations then, you’ve innovated.
The mere fact of making the invention available on the market completes the innovation process.
Wait, what? Seems too easy, right?
That is because innovation has been glorified out of proportion, separating the invention from the indicators of impact, or conflating with indications from adjacent incumbents. Any innovation thus appears successful, although that is not necessarily the case.
It’s like a baby taking first steps. It’s an amazing accomplishment, everybody is excited. It’s much different when first steps are those of your pre-teen son’s on any given Sunday morning — although it may still be an accomplishment. Hindsight is a bitch. It strips the past of the value it felt like. Only romantic and emotional memories remain.
BTW, this provides a glimpse in how our brain works: We’re unable to store precise values, unless they’re abstract, like numbers. We can remember that we ate 3 pancakes, and that they were super-soft. What we can’t remember is the actual pressure on our teeth, despite having sensors in our bodies that could, in principle, be able to provide this information.
How can we measure innovation, if it is but a fleeting moment? How can we properly assess it? As any VC will tell you, picking winners is very difficult, but somehow, some are better (e.g., Y Combinator) than others. As Paul Graham said, the next Microsoft was Google, the next Google was Facebook. How do these compare?
The key to evaluate innovation is growth. Growth because it serves the goal of having an impact. Growth because it comes with a context. Growth because it facilitates comparison, all along the lifecycle. It shows the direction.
But which metrics do you choose? Anything that shows that your impact on society, industry, or market is growing. It’s up to you to set them. Despite the difficulty of looking in the crystal ball, things become easier when you commit them to paper. You can always iterate afterwards. Just be careful to be as honest as possible; That's a big factor in iterating effectively.
For newly founded start-ups and new corporate initiatives, metrics are most effective when they're simple and allow understanding how the market reacts to the innovation. Starting by measuring revenue right at the start is often ill-advised because the loop between cause and effect can be so large that the causal relationship is unfathomable. If you don't learn, you don't improve, and you don't achieve market fit.
Timing and Scaling
Once the metrics in place, you can evaluate which of your activities have an impact. This will allow you to choose where to concentrate your enthusiastic efforts and scarce resources. The growth of your metrics will allow you to determine whether the timing is right.
Finding out whether the timing is right is crucial, because even the best teams cannot impose society, market, or industry conditions. Google Glass flopped because it was too early. Now that AR is on every phone, a number of good experiences will find their way to the market, and users will start feeling the pain of having to move their devices around the virtual objects. Augmented glasses will solve that pain.
If the timing is right, you can start thinking about scaling, which is mostly an exercise in setting priorities, investing, and reorganizing. Like innovation, also scaling has phases, which can be defined by the size of the organization that is driving the innovation. Reid Hoffman divides scales into Tribe, Village, City, and Nation. At every transition, the entire organization must be reviewed and likely restructured to be effective. It's a deliberate, painful, but necessary exercise, because the best innovators and founders might be terrible at scaling. Delaying the decisions will only increase the pain, as well as the risk.
For larger organizations, there is the additional risk of running parallel initiatives, which brings the need to evaluate whether the moment is right to integrate with existing business entities and their roadmaps. If the timing is not right, that choice is easy. But if the metrics are running, the tough choice that the leadership faces is one of internal disruption. But hey, disrupt or be disrupted.
Finally, one aspect of scaling that is particularly tricky is identity: How does a company maintain its original identity when the original innovators are gone and the product is used by more and more people? Only if there is a shared narrative, through culture and products. That is, for instance, how employees behave when the boss is not around, and how the product is perceived on the market. People are responsible for these aspects, and a structure must be in place (e.g., training, leading by example) to perpetuate a healthy culture that leads to great products.
When does scaling stop? Never.
Beyond innovation there’s infinity 🚀