As a mentor to many business professionals and owners who want more, and aspiring entrepreneurs, I find a wealth of innovative ideas, but often less insight on what it really takes to transform ideas into an income stream that can excite new customers into long-term business success. Thus my guidance is usually more on the realities of creating a business, rather than critiquing ideas.
For example, innovative technologists often come up with a new device or app, just because they can, and assume everyone will want one. Social entrepreneurs pitch me their latest idea for reducing world hunger (such as producing edible algae), but forget that hungry people probably don’t have any money. It takes a wealth of hungry buyers to sustain a great business idea.
So, unless you are satisfied doing research on a shoestring, I encourage you to focus highly on achieving business success, as well as on creating an innovative solution. I was happy to see this strategy expertly illustrated in a new book, “The Innovation Mindset,” by Lorraine H. Marchano. She speaks from decades of experience with innovation at big companies, as well as startups.
I’m happy to add my own insights here for your consideration to her suggested eight essential lessons, with supporting case studies, for evolving any innovative idea into a business reality:
1. Every innovation must solve a customer problem.
A key attribute of every innovation transformed 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, better known, or easier to use.
2. A great innovation starts with at least three ideas.
I find that many entrepreneurs are so blinded by their initial idea, that they fail to evaluate alternatives. I recommend that you always use brainstorming, or expert feedback, to define similar approaches and markets, before proceeding to produce and sell a solution that may be expensive to change later.
3. Be a dreamer first, but a realist on marketplace 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 head may have unforeseen challenges in cost, reliability, and usability in the marketplace. Investors expect this step to be proven successful before funding.
4. Test your innovation with at least a hundred customers.
Believe it or not, customers are not all like you. I have found, for example, that “early adopters” love innovation and new features, while “mass market” customers enjoy simplicity and usability. Don’t be hesitant to use focus groups, crowd funding, and personal interviews to quantify interest.
5. Be ready to pivot at any point in the process.
Every successful business owner you know will tell you that their original plan has changed or pivoted from the original. Primary reasons include unanticipated customer reactions, early competitors, financials not meeting projections, and channel partner issues. Plan for change before the first crisis.
6. Write down your business model and five-year plan.
I believe that writing down your business plan has tremendous value for you, even if you don’t need investors. Generating a written plan will force you to think through all the key elements for success, including market definition, solution features, financials, real competition, and marketing.
7. Take the steps needed to improve your success odds.
You can improve your odds by reducing risks. Certainly, some risks are uncontrollable, such as the recent Covid-19 pandemic, but others are manageable. For example, you must secure adequate funding for operations, hire good people for operations, and manage your reputation and service.
8. Maintain communication and trust with constituents.
This starts with building a positive and persuasive pitch deck for investors and team members, and updating your team on a weekly basis with progress and next steps. It also means building trust and credibility through visibility, feedback, and really listening to your team and customers.
Please do not get the impression that a business should reduce the current priority on innovation. We all know that the pace of innovation is increasing, and the market is responding positively. I simply suggest that innovation alone does not assure business success.
For long-term success, you must apply the rules and realities of business outlined here with the same passion and determination that generates your solution innovation. Many of your peers and competitors are already there, so it’s never too early to start today.