Why experimenting is important in innovation
Today, if businesses want to stay competitive, they need to continually evolve to meet ever-increasing customer expectations and solve new problems as they arise. To do this, innovating and exploring new growth opportunities is a must — but that also requires stepping out of your comfort zone.
Building a new business or bringing new propositions to market can be risky. There’s no guarantee that it’ll succeed and you need to make sure that it’s worth the investment. The solution? Testing, validating, and experimenting.
Why you should experiment as you innovate
From a distance, innovation may seem like a linear process where you come up with an idea on paper and then move forward with executing it. The problem with this approach is that it has a high chance of failure. If you’re not talking to customers and getting feedback on your idea, you operate on assumptions and are far more likely to invest in a solution that they won’t buy. At the end of the day, you don’t know what you don’t know, so you need to do the work of finding out.
The alternative is to run fast, iterative sprints that have quick and successive build-test-learn loops that inform where your idea goes. Here, you can identify assumptions and build hypotheses for you and your team to test against. Check whether your customers actually have the problem you think they have, and evaluate whether your idea is the best way to address that particular challenge, and validate if they are willing to pay for it.
You also need to be customer-centric. No matter how good your idea is, it won’t be successful if your customer can’t see its value or doesn’t feel like it’s the right solution. So, once you’ve conceptualized your solution, take it to your customers as quickly as possible. If you have a community of certified customers or a group that’s willing to provide feedback, invite them to co-create the solution.
As the end users, they’ll have invaluable information to share about what you’re creating. These individuals will also be valuable if you’re looking to refine your existing products — they can share insights on gaps that you can then incorporate into your innovation pipeline.
Taking your time to test and validate your product is crucial. Too often we see companies that try to scale their ideas too quickly, putting millions of dollars into an offering that’s a bad fit for the market it’s trying to serve. We’re reminded of a startup, BetterPlace, active in the electric vehicle (EV) industry that tried to launch EV battery swap stations in 2007 — when there was still limited appetite for this type of technology. They lost hundreds of millions of dollars as a result.
By checking in with your potential customers beforehand — and gathering a collection of quantitative, qualitative, and behavioral data — you can avoid this pitfall. In short, testing and validating your idea will help de-risk the project while also giving you the evidence you need to get executive buy-in. With those two pieces, alongside customer support, your idea will be much more likely to succeed.
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Originally published at https://www.businessmodelsinc.com on November 3, 2021.