Can You Find Innovation Opportunities in the Market? Yes - If You Know Where to Look
Updated: Aug 17, 2022
Some people think innovation just happens. It's a thunderbolt, a brainwave. Almost...magic. Certainly not something you can go looking for. But you can proactively pursue market-driven innovation if you have a plan.
The legends around innovation are largely apocryphal, which make them dangerous. These legends make product teams believe that innovation comes from their imaginations, instead of the market. The idea that magical thinking drives innovation leads product teams to waste a lot of money and time building "innovative" product guesses that no one buys.
Legends are Fun, But Innovating on Purpose is Better
Scratch the surface of these legends and their leaders - Apple’s Steve Jobs, Reed Hastings of Netflix - you see that there were signals from the market that led to their success. Cultural trends, emerging technology and sometimes outright demands for change that these visionaries took advantage of. These signals can be identified by any organization, in any market, if you listen in a way designed to find them. You may be doing market research, but you're probably not going to find the Next Big Thing the way you're doing it today.
In my post, What Do You Mean, "Innovate?” I said the first step to innovate on purpose was to get aligned on what "innovation" means to your organization, with an infographic outlining the four phases of the Market Opportunity Spectrum.
You can intentionally discover innovation opportunities in your markets, but you need a plan. We’ve talked about the first step of that plan; now we’ll move on to the second.
Market-Driven Innovation Succeeds If You Look in the Right Places
Once you’ve agreed on the scope of innovation you aspire to, you can identify where in the market to go looking for it. But finding innovation opportunities isn't as easy as asking the market what they want you to build next. The more disruptive the innovation you're trying to achieve, the broader and deeper the scope of your market research will be. This research may be far beyond the markets you serve and the product you offer today. To help you align your market research activities with your innovation goals, use the Market Understanding Spectrum.
The Market Understanding Spectrum
The infographic below is the Market Understanding Spectrum. It's a companion to the Market Opportunity Spectrum, providing ideas to proceed with market-driven innovation once you and your leadership agree on the degree of innovation you're looking for.
For example, if your strategy is to be the premier provider of your existing product to its existing market (Responsive Innovation), your scope will be relatively tight, perhaps confined to observing current product users and buyers for changing workflows and shifting priorities.
On the other hand, if you're looking to sideline competition or solve problems nobody’s solved before (Disruptive Innovation), your scope of research could include cultural shifts in society that impact preferences and priorities, or supply-chain challenges that are creating new opportunities or risks. Perhaps even emerging ways to choose, buy and receive a product – any product. Bringing a broad variety of knowledge sources together, as well as observing trends over time and paying attention to predictions in and outside of the industry, is key to Disruptive Innovation. As you can see - what you need to learn from your markets is very different, depending on what you're trying to do for them.
"Innovation by brainwave" is fun to talk about, but it’s risky and expensive - not to mention largely mythical. To innovate on purpose, you have to look for inspiration on purpose. That means creating a plan to find it.
About the Author
Diane Pierson is the Founder and Principal Market Strategist of Innovate on Purpose, a consultancy enabling successful product innovation for tech companies through strategic focus and powerful go-to-market strategies. Diane is also a visiting instructor at Pragmatic Institute. Contact Diane at firstname.lastname@example.org.