There are plenty of innovative ideas out there, but often less information about what it takes to turn those ideas into a revenue stream that can excite new customers in the long run.
For example, innovative technologists often create a new device or app just because they can, assuming everyone wants one. Social entrepreneurs pitch their latest ideas to reduce world hunger (like growing edible seaweed) but need to remember that hungry people probably don’t have money. And it takes a lot of hungry buyers to sustain a great business idea.
How to turn any innovation into a commercial success
Every innovation must solve a customer problem: A key attribute of every innovation turned into a successful business is that it must provide a solution to a real problem that potential customers are willing and able to pay money to acquire. Beware of “nice to have” solutions or available alternatives that are cheaper, more popular, or easier to use.
Great innovation starts with at least three ideas: Many entrepreneurs are so blinded by their initial idea that they fail to evaluate the alternatives. It is recommended that you always use brainstorming or expert feedback to define similar approaches and markets before producing and selling a solution that can be expensive to change later.
Be a dreamer first, but be realistic about market risk: One of the best ways to assess development risk is to build and test a prototype or Minimum Viable Product (MVP). What looks good in your mind can have unforeseen challenges regarding cost, reliability, and ease of use in the marketplace. Investors expect this step to be successful before funding.
Test your innovation with at least 100 customers: Believe it or not, not all customers are like you. For example, “early adopters” love innovation and new features, while “mass market” customers enjoy simplicity and ease of use. Feel free to use focus groups, crowdfunding, and one-on-one interviews to quantify interest.
Be prepared to pivot at any point in the process: Every successful business owner you meet will tell you that their original plan has changed or been modified from the original. The top reasons include the following:
- Unanticipated customer reactions.
- Early competitors.
- Financials that don’t meet projections.
- Problems with channel partners.
Plan for change before the first crisis: Write your business model and five-year plan. Your business plan is of great value to you, even if you don’t need investors. Generating a written plan will force you to think about all the key elements for success, including market definition, solution features, finances, actual competition, and marketing.
Take the necessary steps to improve your chances of success: You can improve your odds by reducing the risks. Certainly, some risks are uncontrollable, such as the recent Covid-19 pandemic, but others are manageable. For example, you must secure adequate financing, hire good people for operations, and manage your reputation and service.
Maintain communication and trust: This starts with creating a positive and persuasive pitching platform for investors and team members and updating your team weekly with progress and next steps. It also means building trust and credibility through visibility, feedback, and listening to your team and customers.
Don’t get the impression that a company should reduce the current priority over innovation. We all know that the pace of innovation is increasing, and the market is responding positively. Just keep in mind that innovation alone does not ensure business success.