Innovation: Part 1 Market Needs

InnovationInnovation. Simply put “innovation is a new idea, or more-effective device or process.Innovation can be viewed as the application of better solutions that meet new requirements, unarticulated needs, or existing market needs.This is accomplished through more-effective products, processes, services, technologies, or business models”

Where would we be without Wikipedia!

But lets look at the component parts of the definition to better appreciate what goes into an innovation.

Firstly to innovate (or at the very least to judge whether an innovation is viable), you need to have an appreciation of existing and potential market needs. I use the word “appreciation” deliberately because there is no such thing as perfect knowledge when it comes to evaluating a market.The main subject of this blog will be looking at market needs. Part 2 will consider the variety of ways that you can get innovation:

  1. Product
  2. Process
  3. Service
  4. Technology
  5. Business Model

Innovation and Market Needs

There are two aspects which I want to discuss here in relation to market needs. Firstly existing market needs (unarticulated or not) and secondly new or potential market needs and requirements. In some ways they are elements that bind them together.

Innovation

Market Schematic

 

The basic schematic above shows what I mean. Boxes “A” and “B” each have an existing product (or service). Box “A” represents the current product and the existing use, while Box “B” represents the existing product put to a new use. Looking at an example may help clarify my thinking (let’s hope so!!). Lets take that old favorite BAKING SODA. As its name suggests it was primarily used in baking initially. But with the advent of Refrigerators in the 1950’s the odor absorption properties of baking soda began to be actively marketed. So here we have a new / potential use for an existing product (we’re now firmly in box “B”). As a by-the-by you can also find new users for existing products, which is another dimension.The rise of Personal Computers fits somewhere into this category of innovation.

Box “C” is where a lot of New Product Development takes place. You invent a new and better mousetrap to meet an existing need. Or to bring us more up to date think about how Gillette constantly try to improve the shaving experience or Ford improve the vehicles. Or Uber bring a new business model to meet and existing need.

Compared with Boxes “A, B,C”, Box “D” is far more risky. Here we have a new product (or service) that meets a potential rather than existing need. Let’s look at this box in a little more detail with some past examples. Many people seem to believe that Apple is a great example of a new product creating a new category. But for me the true genius of Apple is that they created amazing and differentiated products in huge pre-existing categories like computers, laptops, MP3 players, phones, etc. They reduce their risk and simply define their category as new. In reality they are in my Box “C”.

So what would be a genuine example of a Box “D” innovation? Well if Apple didn’t create the mobile music market perhaps it was Walkman? I think not. I think that the real “modern” originators were the inventors of the no obsolete transistor which led to the ubiquitous transistor radio of the 1940’s. To my mind everything since then has been a “new product” for an existing use.

So where is all this taking us?

It brings me back to one of my maxims about innovation. It’s far easier to operate in the known rather than the unknown. You can innovate with new business models for existing products. You can innovate by finding new uses for existing technology. You can innovate by bringing new technologies to existing problems. There is no need to shoot for the moon, the so-called holy grail of innovation, the creation of a new category.

 

 

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