l12 the innovators method

LECTURE L12THE INNOVATOR’S METHOD

...a kind of shadow future, hovering on the edges of

the present state of things, a map of all the ways in

which the present can reinvent itself

Steven Johnson

Adjacent Possible

Why is IBM still alive and thriving after so long, in an

industry characterised perhaps more than any other

by innovation and change?

Economist:1100100andcounting

Case Study

Tabulating machinesElectronic machines - MainframesDistributed systems - Minis and PCsServices


Platform Shifts


Platform Shifts

“IBM is not a technology company, but a company

solving business problems using technology” – George Colony


Platform Shifts


Platform Shifts

1. Maintain connection to customers2. Less hierarchical and more open3. Business relevant research4. Globally integrated5. Financial planning – get out of

commoditized business


Platform Shifts

WHAT IS THE SECRET TO BE SUCCESSFUL ENTREPRENEUR?

"There is no real formula." - Peter Thiel

Author: Zero to One

Innovation

In the history of business,

things happen only once

Against the Norm

TRUTH IS SOMETHING EVERYBODY

AGREE ON

MAY NOT BE RIGHT


Against the Norm

WHAT GREAT BUSINESS

ISNOBODY STARTING?

Peter Thiel

Definition of Losers

PEOPLE THAT ARENOT GOOD ENOUGH

ORPEOPLE JUST DOING THE WRONG THING?

"All happy companies are different because they found something

unique to do, all unhappy companies are alike, because they failed to escape the sameness that

is competition." - Peter Thiel

The Nature of Progress

0 to 1

1 to n

Technology doing new things

Vertical

Globalisation copying existing things Horizontal

Peter Thiel: Zero to One

The Nature of Progress

Looking for Opportunities

Targeting overshot customers or non-consumption

“Good-enough” can be great

Do what competitors won’t

Looking for Opportunities


Removes barriers that constrain the ability to consume

Overshooting customers needs

Hidden beauty in undesirable or invisible markets

Remove barriers that constrain the ability to consume

Remove the skill required for photography

Kodak’s Brownie Camera

Remove the skill required to operated a computer

Apple’s iPad


Make computing affordable to more people

The Personal Computer


Make access to telephony easier

Mobile phones


Make access to niche movies

Youtube LegoStar wars


Make buy/selling things fast saving time

Ebay auction


1. Creating a Computer Game for mobile

What is the barrier for these:

4. Health Care

5. University level education

2. Making an Music Album

3. Publishing a Novel

6. Rent your house



Make the complicated simple

Don’t let the mainstream derail you

Innovate, don’t force

Nintendo Wii


Gaming for the family

Portable music players disrupted by Apple, 2001

1000 songs in you pocket!


Mobile phone, 2007

Apple reinvents the phone



Sustainable innovations compete on getting better

Disruptive innovations compete on doing it differently


Netflix

Subscribe, no late fees


Unattractive or uninteresting market

Does not seek head-on collision with established competitors

Personal Computers


CRM as a Service


THE INNOVATOR’S METHOD

Case StudyIntuit is a successful software company makers of TurboTax, Quicken and other financial software solutions

However, by 2008 they reached a performance plateau and market value was falling

Intuit was focusing on making things easier to use but did not do many customer reviews

NPS was flat

The Innovation Crisis: Unprecedented Uncertainty

Net Promoter Score

How likely are you, on a scale of 0 (not at all likely) to 10 (extremely likely), to recommend this product or service to a colleague or friend?

A product’s NPS is the percentage of promoters (those who score themselves 9 or 10) minus the percentage of detractors (scores 0–6).

Net promoter score = % promoters minus % detractors

Design for Delight

Most successful companies didn’t just offer products that were easier to use; they offered products that delighted customers.

• Gain deep customer empathy Understand customers better than they understand themselves

• Go broad to go narrowGenerate lots of solutions before winnowing the list

• Experiment rapidly with customers Seek feedback early and often

Innovator’s MethodFour steps to solve high uncertainty problems and turn insight into a successful innovation

Innovator’s MethodStep 1. Insight: savor surprises Step 2. Problem: discover the job-to-be-doneStep 3. Solution: prototype the minimum awesome productStep 4. Business model: validate the go-to-market strategy

Leverage the behaviors, questioning, observing, networking, and experimenting — to search broadly for insights about problems worth solving.

Step 1. Insight: savor surprises

What problem is nobody solving?

Innovator’s Method

Rather than starting with solutions, start by exploring the customers’ need or problem— the functional, social, and emotional job-to-be- done— to be sure you’re going after a problem worth solving.

Step 2. Problem: discover the job-to-be-done

What is the customer really buying?

Innovator’s Method

People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.

Job to be Done

Instead of developing full-scale products, leverage theoretical and virtual prototypes of multiple solution dimensions. Then iterate on each solution to develop a minimum viable prototype and eventually a minimum awesome product.

Innovator’s MethodStep 3. Solution: prototype the minimum awesome product

Once you’ve nailed the solution, you’re ready to validate the other components of the business model, including the pricing strategy, the customer acquisition strategy, and the cost structure strategy.

Innovator’s MethodStep 4. Business model: validate the go-to-market strategy.

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L13 The Rise of the Machine