I've been working as a software engineer for over 10 years now. In that time my definition of what an innovative company is and how one comes about has changed time and time again. It first started with the big company idea. Big companies are already successful, thus they must be the best innovators. That quickly changed to startups with smart people. A smaller, more focused group of "smart people" have the best chance of innovating in the long term. This fell apart when I spent 5 years at a mid-sized startup with an amazing engineering team and $70 million dollars in investment that ended up being acquired for far less. I then realized all of my past and present perceptions were completely wrong. I was so obsessed with this problem that I quit my lucrative tech job and decided to dedicate myself to figure out how to be successful at innovation. Is it luck? Happenstance? Or is there a science to it that can help predict favorable or unfavorable outcomes for any innovative business venture. This led me to read some of the existing material on the subject.
Lean Startup by Eric Ries - Excellent read for anyone who wants to pursue entrepreneurship, especially if you're coming from an engineering background. Lots of example case studies to go through and understand. While it helped me form a basic process in my head, I felt it was rooted on an "idea". If you have an "idea", here's how you go about validating it. But what if I didn't have an idea? What if I build an MVP for some random idea I've thought up or for something that I perceive to be a problem only to find I wasted a month in doing so because there's no real market need? In my quest to answer these questions I turned to the "Jobs to be done" framework.
Jobs to be done by Anthony W. Ulwick - JTBD argues that the purpose of a product is to aid the intended customer to complete some underlying process (a job) in a more beneficial way than without the same product. Beneficial could mean many things, but generally it can be broken down into functional and emotional components. A functional component could be speed. The job gets done quicker and more efficiently. An emotional component could be social status. By using this product I gain the envy of my friends. While this is a much more complete and detailed framework, it may prove too verbose to use for validating a startup where we want to ask quick and targeted questions to get to the unmet needs.
Innovation and entrepreneurship have a certain attractiveness and caché to them. It is fun coming up with new ideas and quite exciting to think that one of them may be worth kazillions. But that’s pretty far from the truth! In reality very few ideas mature to become successful startup ventures. Very few even relate well to market needs. Therefore the success odds of new startups are only a few % even if one follows the many decades of experience and extensive teachings on how to innovate.
But business must innovate to survive. It is imperative. And with more than 15% of the population involved in entrepreneurship, why is the success rate still so low? How do we increase the odds?
The Scientific Method
Innovation is value creation. It may be described by 5 elements that make up value.
The problem
Customers with the problem
Customer problem needs
Existing alternatives addressing met needs
Experiment tests to align idea solution features with unmet needs
Since customers, their needs and a new idea solution are initially all unknown, the first challenge is to query potential customers to discover their problem needs. This can also be referred to as the problemation step. Met and unmet needs must be discovered for at least one customer segment in order to create and idea (ideation) and then test validate or invalidate it via experiments.
Satisfying market unmet needs will develop traction, revenue and a sound basis for venture investment to help facilitate rapid growth. Adding more detail -
Value begins with a market problem or a job process that a
Customer - the job executor - is trying to do.
Customer job needs are success criteria to do the job perfectly.
Value propositions are ideas that provide a benefit-cost fit and wins-results fit for functional results and emotional customer needs.
Existing alternative solutions may satisfy customer needs that have been met and some level of a problem-solution fit while
Innovative idea solutions may satisfy unmet needs providing a better unmet needs fit for a customer problem compared with alternatives.
Value add greater than alternatives may be validated/invalidated or pivot based on the results from experiments to provide idea solution features that satisfy the unmet needs better.
Problemation
Innovation is all about creating value for a market need that begins by observing/discovering a significant customer market problem. It's not about a cool idea or an idea pitch. The idea should come in later.
The problem should be very important (sizeable, severe, repetitive) to a customer segment that is struggling with it.
We should seek to discover important market needs, both met and unmet needs, for achieving practical results and satisfying key emotions of the customer segment.
Then assess existing solution dissatisfaction for each key need before proposing an idea hypothesis to better address the unmet needs.
There are four basic components to problemation -
Job Problem - Defining the problem topic. Value to a customer begins with a product that can help improve some job process the customer is following to accomplish something.
Customer Job Performer - The job executor who struggles with the problem.
Customer Job Success Needs - Success criteria for the Customer Job Performer to do the job perfectly.
Existing Alternative Solutions - What the customer uses currently (alternative solutions) or does (workarounds) to accomplish the job.
In surveying potential customers with a market problem in your preferred problem domain don't ask them what they want, but query them about their problem needs and experiences. Don't try to sell them an idea or solution. Instead, ask them questions about their problems and listen. Here are some initial questions you can ask in order to steer a potential customer towards their problems -
What is the hardest part about ... (the job they are doing)?
Tell me in detail about the last time you encountered this problem?
Why was it hard?
The goal of the three questions above is to uncover problem needs that
are big and/or severe
common and wide spread for the customer segment
frequent and/or recurring
For startups the need is all that really matters. It's the foundation of your entire business. It can trigger powerful emotions like empathy and disgust on command. Every need is contextual. It's felt by a particular person, at a particular time in pursuit of a particular end goal. All needs have a
functional side - I need this painting to look beautiful....
and an emotional side - ...so I can impress my guests.
Needs find a way of getting met with or without your product. A need narrative outlines a thesis on how to make peoples' lives better. A clear need narrative helps
prioritize features
communicate the solution effectively
hone in on the most important niche
In order to get to the existing solutions a customer uses, you could ask the following -
What have you done if anything to try to solve the problem?
What don't you love about the solutions you have tried?
Existing solutions provide a benchmark in the market place. If the problem is important enough there will always be one or more existing solutions. But often these solutions will only satisfy some needs leaving others unsatisfied that present opportunities for new innovative solutions.
Putting the questions together from above, you can now draft a survey to send to your target customer segment in order to get to their unmet needs -
What is the hardest part about ... (the job they are doing)?
Tell me in detail about the last time you encountered this problem?
Why was it hard?
What have you done if anything to try to solve the problem?
What don't you love about the solutions you have tried?
Ideation
Propose an innovative idea to resolve unmet needs. The innovation journey may be characterized in terms of two major hypothesis -
a first value hypothesis focuses on definition of existing unsatisfied market needs and new innovative customer value solutions and value propositions for them, and then
a subsequent growth hypothesis to devise business models to scale and execute new solutions for market segments. Our focus here is the former.
An hypothesis proposes a new innovative idea solution that may address priority unmet customer job needs. Ideas must address a market problem and unmet customer needs, so cool ideas coming from elsewhere are almost always irrelevant for generating market value but they may be close to better ideas.
Job Story Analysis
Job stories outline the job process the customer is following to accomplish something. When I do a job... (job situation), I want to... (the success motivation), so I can... (get an expected result). This simple outline can be used to design the initial unmet need features for an MVP. Innovative ideas for unmet needs must be translated into customer solution job stories that arise from need observation insights to guide design of MVP features to test and verify via additional customer feedback. You could do this with the following steps -
Draft job stories for the highest priority unmet need features for a solution MLVP (minimum lovable-viable product)
Select the priority job stories for implementation coding or mockup for testing on customers.
Code the top 1-3 features that provide a simple potential problem fix – or at least a route to one.
Send the MLVP to your potential customer group for review and use to see if it begins to address the challenge(s) identified in the earlier surveys and provide a new survey for specific responses.
Analyze the responses and decide whether to proceed or pivot.
Experimentation
Idea Solution Value Add > Alternatives - Convert idea into unmet needs solution/product features value add.
The MVP is a quick mockup for only the priority unmet need features. It's a set of experiments on customers to validate, invalidate or iterate the hypothesis to satisfy unmet needs. Here's a quick set of statements to think about when evaluating your MVP -
My test feature is ...,
The Test Customer for this feature is ....
The success needs this feature addresses are -
Emotional Gain - ...
Emotional Cost/Pain - ...
Result Gain - ...
Result Cost/Gain - ...
Make sure to ask your target audience how they would rate each of the following from above.
MVP Feature Use Satisfaction
Once you've released your MVP, ask your target customer audience to list out what customers liked about your MVP, along with a rating for each to capture importance.
Putting it all together
Problemation Survey Questions -
What is hard about (problem topic)?
Tell me in detail about the last time you encountered this problem?
Why was it hard?
What have you done if anything to try to solve the problem?
What don't you love about the solutions you have tried?
Hypothesis/Idea Pitch -
Our venture resolves problems "x" ....
that creates value for customers "y" ....
to address unmet needs "a" ... "b" ....
better than existing solutions "c" ... and "d" ....
that only do "z" ....
Job Story/MVP Roadmap -
When (job situation) .....
I want to (motivation) .....
So I can get (expected result) .....
MVP Feature Questions -
How important (1 - 10) is this feature to you?
Are you very, somewhat, or not disappointed if it's not in?
How satisfied are you with it (1 - 10) and what will make it better?
Here's a full step by step process that you can use in combination with the above to get started on your innovation journey today -
The journey begins with the selection of a problem topic – in a domain where the innovator has experienced some challenges or knows many others who have expressed frustrations.
Next – selection of potential frustrated customers who face the problem on a frequent basis and who are willing to answer a few questions and perhaps chat in a small online forum or channel (such as in reddit or Telegram). Preferably these folks are passionate about resolving their challenge and are at least 7 in number and as many as 100 or more.
A set of initial questions (in Goggle forms with an xls response database) that the potential customers will respond to that provide insight into the 5 value elements.
A second set of follow up questions and xls response database for zeroing on the importance of both emotional and functional needs as well as the dis-satisfaction of existing solutions to the problem(s).
Assistive analytics for assessing responses for which are the most important needs and which are unmet vs those that are met by existing solutions.
Assessment of the overall responses to confirm that the problem is severe, frequent and widespread and hence perhaps warranting a new startup solution to resolve it.
A decision mechanism for selecting the highest priority unmet needs for ideation within the founders/ business group.
Drafting a solution hypothesis within the value element DNA template that is to be the initial position statement for the idea problem solution.
Drafting job stories for the highest priority unmet need features for a solution MLVP (minimum lovable-viable product)
A decision process for selecting the priority job stories for implementation coding or mockup for testing on customers.
Coding the top 1-3 features that provide a simple potential problem fix – or at least a route to one.
Send the MLVP to the Reddit/Telegram groups for review and use to see if it begins to address the challenge(s) identified in the earlier surveys and provide a new survey for specific responses.
Analyze the responses and put the data into a customer experience database (pendo, medallia or whatever you use to analyze what the emotional and functional needs are).
Forward the data and insights to the scrum group for next steps to proceed or pivot.