Innovation = Invention + Commercial Viability
Throughout history, many great inventions have gone nowhere because the inventor was unable to come up with a successful business model around it. Sometimes it’s because the invention solves a problem that no one cares about. Sometimes it’s because the inventor failed to come up with a way to sell and distribute the invention.
Sometimes it’s just because it’s a stupid invention.
I’m at the European Innovation Academy this week. At the EIA we teach that for true innovation to happen, you have to have invention plus commercial viability, and that innovators need to think about the business model early in the process. Successful inventions achieve Problem-Solution fit (the product solves a real problem) and then Product-Market fit (the marketplace actually wants to buy the product we are offering).
The framework we use is the Lean Canvas, a commonly-used method in the startup/innovation world today. The idea of the Lean Canvas is that every venture can be expressed on a standardized model which includes statements about the problem we are solving, the way we are solving it, what our revenue streams will be, what our cost structure will be, etc.
At the EIA we make a very large print of the Lean Canvas (see photo below) for the students to put sticky notes on as they develop their business model, iterating again and again, testing their assumptions, and then iterating some more.
A key part of this process is testing the hypotheses which we put onto the Lean Canvas. For example, we might think that people between the ages of 22-30 will be especially interested in our product, and then we find a way to test that (doing surveys, small social media campaigns, etc). Maybe we’ll find out that, actually, people between the ages of 35-40 are the ones who are most interested in our product! So the heart of this methodology is to put your best guesses onto the Lean Canvas and then figure out a way to test those guesses. By using this process – iterating upon hypotheses and then testing them, we will emerge with a battle-ready business plan that is based on actual empirical evidence rather than wishes and hopes.
That’s how successful innovations are developed.
You can download a blank Lean Canvas here and print your own.