Truly innovative businesses typically don’t emerge fully formed. Those that make it through from concept to successful commercial launch often travel a journey not envisaged by their promoters. Edison’s one per cent inspiration, 99 per cent perspiration holds true in many cases.
There is increasing acceptance that "Eureka" moments may not be as important as the hard slog of testing, tweaking and honing a basic concept and following a more scientific approach to what's likely to work in the market, a notion author and innovation consultant Scott Anthony likens to applying the Scientific Method to the process of innovation.
This involves, as the Oxford English Dictionary helpfully explains, “systematic observation, measurement and experiment and the formulation, testing and the modification of hypotheses”.
Anthony says innovation is much misunderstood. “Innovation is something different that creates value and it isn’t accidental. There is a discipline to it, if you measure and practice it you can meaningfully and measurably improve your chances of success.
If you focus all of your energy creating something that doesn’t exist – the perfect idea – you are completely wasting your time. Every idea is partially right and partially wrong,” he tells The Irish Times.
Anthony has devised a toolkit under the acronym DEFT standing for Documenting your idea; Evaluating it from multiple perspectives; Focusing on the most critical aspects; and Testing to increase confidence.
“The key is to be able to answer three key questions: how do I reliably identify the weak points in my strategy? What is the difference between a fact and an assumption? And what kind of experiments allow me to learn what I need?”
Potential customers
As part of his work for Innosight consulting company, Anthony oversees a portfolio of venture capital investments. With refreshing honesty, Anthony opens his latest book, The First Mile – A Launch Manual for Getting Great Ideas into the Market, with the story of what seems like a bright business idea but quickly turned out to be a flop.
Anyone who has visited India has come across the roadside barber shops, under trees and canopies. To improve this market, the Razor Rave was a single-chair barber's booth concept in India that looked great on paper. It had low overheads and the potential to be franchised all around the sub-continent.
But there was flaw. The single chair needed a great barber. Once the barber recognised this, he either demanded unsustainable wages or left and took the customers elsewhere.
The “hero barber” was the flaw and the business was folded quickly. “The first mile is a perilous place. It looked great on the spreadsheet and the research was very encouraging but the white heat of the market is a different place,” Anthony acknowledges.
Some research is good but the limitations of doing research are obvious, he says. “Customers lie. When you ask a customer they will give you an answer that doesn’t reflect what they would actually do. The key is to understand the problem that potential customers have. They are quite common and consistent and if someone is spending money or time trying to solve it, that a good space to be innovating in.
Viable product
"When you try to get people to prioritise something that historically wasn't important to them or get them to care about something that wasn't important in the past, that's when you run into trouble."
The notion of the Lean Start-up, which talks about the minimum viable product, a concept popularised by author Eric Ries in his 2011 best-selling book of the same name, is often taken to extremes and actually misinterpreted, Anthony says.
Overconfidence
"We're increasingly seeing innovators doing things without thinking – the notion of throwing spaghetti against the wall and seeing if it sticks or the idea of 'letting hundreds of flowers bloom'. That's just as dangerous as paralysis by analysis and there is a happy medium. You need to be action biased for sure, but you need to be thoughtful about it as well."
Overconfidence is another problem. “One of our biggest enemies is our own brain. Once we get an idea fixed in our mind, we suffer from confirmation bias. We discard evidence that we are going in the wrong direction. The term ‘devil’s advocate’ gets a bad name, but in the context of innovation it’s actually healthy. You need to look at all of the evidence like a good scientist would.”
People underestimate the cash they need. It will take longer to execute a plan because it won’t be perfect. You either have to have more money or decrease the cost or increase the speed of your testing, he says.
Another key to moving beyond the first mile is to find a good driver for the business to work alongside the founder, with balance again being the key. “You need someone who has a good set of general skills and passion for the role.
“You don’t know what your business model is, so if you hire someone who is a deep expert in what you think it is, you can fall prey to overconfidence trap. If you hire someone who knows nothing about the market on the other hand, you can waste a lot of time learning things that everyone else has already figured out.”
