Innovator's Method: Post #7--Conclusion

Conclusion. Evidence—it works. Intuit increased its revenues tenfold using experimentation and rapid prototyping. Regeneron (biotech) reduces go-to- market for pharma from $4.3 B to $.07 B—18% of the usual cost. Increase the number of experiments if you want to get more ideas to market faster. Business schools don’t have courses on product development, but business should be about “creating a customer” (Drucker). Bottom line: If you have high certainty, write a business plan, but if you’re in uncertain times or industry, become an innovator and experiment like hell!

Innovator's Method: Post #6--Innovative Companies

Innovative Companies: Research on Forbes list of most innovative companies—authors established several categories:
--Established corps that maintain innovation—Amazon, Salesforce, Google, Valve Software, Starbucks, W.L. Gore, IDEO. 
--Established corps that reignite innovation—Intuit, Unilever, P&G, AT&T.
--And, start-up innovators—Rent the Runway, Qualitics, Motive Communications.

Innovator's Model: Post #5--Four Steps

Innovator’s Method. Engineering uses “design thinking.” Entrepreneurship

uses “lean start up.” Computer Science uses “agile software.” Authors synthesized these models and came up with “innovator’s method”: Insight-Problem-Solution-Business Model.
a.    Step 1: Insight. ”Savor Surprises.” Associative thinking combines things that don’t usually go together to create something new. Creativity is connecting things. Triggering new ideas (from Innovator’s DNA): Observe, Network, Experiment, and Ask Questions to get to Associative Thinking.
b.    Step 2: Problem. Find out if you’re solving a problem that customers need/care about. Look at symptoms and get to the root cause of those symptoms. Discover the job to be done. Why would a customer hire your product?  Look at functional, social, and emotional issues. Example: Digital watches did not totally displace mechanical watches. Why? Social reasons—high-end watches lend prestige and appeal to emotions.
c.    Step 3: Solution. Develop a prototype of minimum awesome product. Series of prototypes—viable to awesome product. 1. Go broad with possible solutions; 2. Theoretical prototype—conceptual model of your solution, use “wow” test with customers; 3. Virtual prototype—Mock-up and wow test; 4. Minimum viable awesome prototype. Theoretical and virtual are fast—you can create a lot of them in a short period of time.
d.    Step 4: Business Model.  Discover a low-cost, go-to-market strategy. Use Business Model Canvas by Osterwalder to consider major business assumptions. Example: Indian company (Godrej) found that 80% of Indian houses don’t have a refrigerator. Godrej did not leap to a conclusion, but answered the “job to be done?” Small refrigerator would not work. No consistent power in rural India. Rapid prototyping produced more of a cooler, less of a refrigerator and a battery to deal with intermittent power.

Innovator's Model: Post #4--Different Models

Different Models. Certain and uncertain markets require different models to succeed. Mature companies want to make a better, cheaper, more efficient product. High uncertainty problems require a faster, more adaptive model born from experiments rather than a business plan.

Innovator's Method: Post #3--Case Study

Case Study. Rent the Runway—Jennifer Hyman, Harvard MBA student. What to wear

to a formal event? Women do not want to be seen in same dress, but can’t afford to buy designer dresses. Would the Netflix model work for renting formal, designer dresses? In the past, when markets were more certain, people wrote business plans. Now—with uncertainty—answering key questions with experiments gets us to market sooner and cheaper. Three questions and experiments used: Experiment #1—Will women rent and return the dresses? #2—Will they rent a dress they can’t try on—as seen only on the Web? #3—Will the Netflix model work? Outcome: She determined that the Netflix model would work.

Innovator's Method: Post #2--Uncertainty

Uncertainty. Since 1983, patents have increased from 100,000 to 600,000. Standard & Poor’s corp life expectancy in 1937 was 75 years, in 2011 only 18 years! Scott Cook, Intuit CEO: “As a successful, scaled company, you cannot run the ship the way you used to. You’ll get run over by a swarm of startups.”

Innovator's Method: Post #1--Overview

 Overview.  This book describes how, in uncertain times, innovators can experiment, test, and validate insights without spending a ton of money on something customers might never buy! The Innovator’s Method has 4 steps: Insight—savor surprises; Problem—discover the job to be done; Solution—make rapid prototype to get to a minimum awesome product; Business Model—validate go-to-market strategy.
The Innovator's Method: Bringing the Lean Start-up into Your Organization by Nathan Furr and Jeff Dyer (Harvard Business Press, 2014), reviewed by Steve Gladis.