Good marketing strategies are vital to attract customers but not enough to be successful. It is important to keep your products or services relevant. Here is an insightful interview with successful entrepreneur Mark Dresdner about how to have a good enough product or service:
Where do companies most often go wrong with innovation?
Mark: Startups often fall prey to a poor product-market fit that isn’t supported by a solid business model. For one, an innovation’s value proposition–the value offered by a company’s product or service–needs to be desired by customers. While this seems basic, I have seen many entrepreneurs dive into creating a product that they think is amazing, only to end up with a solution looking for a problem. While important, marketing efforts are not the solution here.
For a value proposition to be desirable, it needs to address a strong customer need–functional or emotional. Sometimes customers will not know they feel a need for something until they experience it, but it has to be there nevertheless.
Innovative ideas also need to be viable. The company must have a practical and cost-efficient way to bring a product or service to life. Setting unrealistic customer expectations can be fatal for startups.
At the same time, innovations must be financially feasible–likely to deliver substantial and sustainable financial results. The financial results are not always needed immediately. Twitter, for example, survived on investor funds for many years before implementing a revenue model. However, at some point the startup needs to make money to survive. Remember, investors will invest in an unprofitable startup only when they believe that they will eventually earn a return.
What are some of the innovation challenges faced by companies at different stages in their lifecycle?
Mark: As a company matures, it shifts from being the new kid on the block to the established player. Through the maturing process, [leaders] often refocus efforts from innovation to managing the existing business better and more cheaply. And then, at some point, most mature companies realize that to grow–and typically survive–they need innovation to create new revenue streams and address new customer segments. As a result, the innovation pendulum swings back to more creative and disruptive ideas.
As a company’s innovation cycle changes, it can struggle to keep its company story in sync. Microsoft, for example, is trying desperately to become more innovative and its rate of new product releases has increased. However, the company is struggling with their brand story–much of the market still sees Microsoft as the slow corporate giant whose innovation pales in comparison to its competitors.
Injecting innovation back into an established company is challenging. One approach is to create small pockets of innovation. The other is to infuse innovation throughout a company. Both can work depending on the culture of the company.
What are some ways that innovators can work more effectively with those who perform other roles in an organization?
Mark: One of the key roles of leaders of innovation is to build a collaborative working relationship among all areas of the company. As innovative ideas mature, those elsewhere in the company are often the ones to inherit the innovation.
Establishing a common language around innovation is important. Innovators use the language of startups–common words are lean startup, design thinking, and product-market fit. This is usually a foreign language to those in established companies. Providing learning opportunities, such as short training sessions and video clips, around the mindset and language of innovation will enhance communication and understanding.
If a business unit will be impacted by an innovative change, it is wise to gain its input from the start. This will not only improve the quality of the solution but also help make it the business unit’s idea and garner its support. Idea competitions that all employees can enter are another way to get many people involved and excited about innovation. The winners of the competition can then be coached on how to test, improve, and implement their ideas. No matter what specific approach you choose, innovation is something that needs to be part of everything your company does if you want to be truly successful in the 21st century.