Whether you are starting out, or growing an existing business, all business owners and leaders need to invest in creating, growing and renewing the value that they provide to their customers through their products.
Now that might seem obvious for “start ups”, or businesses that have fallen on hard times, but not so for well known market leaders. But consider this: if you are reading this on a household brand smartphone you will know that we are living in an age where many great products are becoming technologically obsolete, or competitors are imitating at a cheaper price, or with additional features, within three or fewer years. So even the best businesses will probably need to renew their current product sales revenue by around 33% every year, just to maintain current order levels and (hopefully) market share.
Some business leaders then say: “my market leading business already produces “the industry standard”, and it isn’t possible for a competitor to improve on that. So we’re not worried.” We remind them of the disruption that comes through innovative substitution; for example, most users of landlines in the 1990s were reasonably happy with their features… but as soon as mobile phones became cheaper and smarter, landline telephone hardware and service contract sales started dying.
So the “renew or fade away” imperative requires your business to develop and follow a clear Product Innovation Strategy guiding your Product Innovation Plans. Having accepted that, your first practical challenges are: “where do I start, and how much time and money should I invest in these pursuits ?” As mentioned in my previous post in this series, your market research is your starting point – it will help you to narrow down your innovation options to those which resonate best with real customers. You can then apply “cost vs benefit” tests to determine which feasible product innovation options might deliver the best commercial returns within your various constraints – and then you can carry out product trials, to validate your thinking without incurring excessive time and cost risks.
Its now time to roll out your MVP – your “Minimum Viable Product”, not your most valuable player, although it might just be that in your innovation toolkit. This is a product version with just enough features to satisfy early customers and provide feedback for future product development, where you refine your MVP into something that might become a fully developed, regular offering to customers.
Here are some other important things to consider before you race off to your innovation lab: