Innovation - Personal Development - Part 3

What can we do as individuals to improve our innovation skills? The question here is what is it that make some people special? Is it an innovation gene that they have or some skill that they build? Of course, there's always going to be geniuses that walk among us but the question is can we increase our discovery skill-set and minimize the gap? The answer is yes. In this post I am going to talk about a few skill-sets that help individuals in improving their innovational ability.

Studies have shown there are five skills that one can work on to improve one's innovational ability. These skills can be improved through regular practice and exercise. So lets go through these five skill-sets and see what they are:

Association

Association is the ability to make a connection between items that are not visibly correlated. To do so one needs to have a set of tools in one's toolbox. It is almost like Lego blocks. To do so the first thing is to fanatically collect and document your ideas. There are a number of inventors and entrepreneurs in recent and distant history that have done this. The lesson learned is to keep your ideas organized and documented; you never know how your brain is going to wire them.

Challenge the Status Quo

People that are innovative do not accept the status of "that is how we do thing here. Instead, they are looking for better, more effective solutions that in some cases even create totally new products or ways of doing things. In most of the cases, however, it's just an evolution of existing products with improved functionality, design or performance.  Practice to observe and question solutions, think about weaknesses and how can they be improved. Human society is evolving only by constantly challenging and improving the present.  

Curiosity 
I do not know if you have ever practice 5Why's, but it is amazing what you learn by asking and digging slowly into the problem. With every step, the problem is peeled like an onion (learned that from the Shrek movie :). There is a great example in the book Lean Startup by Eric Ries.

Networking
This is very simple. Use your network not to sell your ideas but as a sounding board. Test your ideas by talking to your friends, partners and family members. Make sure that you capture feedback and that you seriously consider that same feedback. Different views on the problem, or solutions can move you in the right direction.

Experimentation
Interestingly enough there are two different types of experimentation. One that is physical that is usually done in labs. And the other one that is abstract and done in the inventors' mind. A great example of a lab experimenter is Edison, who had over 10,000 attempts before he created the light bulb. On the other hand, Nicola Tesla, an inventor from the same era, built his prototypes in his mind before actually starting the task of construction.

If you are serious about improving your innovation skill-set, make sure to set time aside and start practicing these tips. Till next time. Cheers.

Innovation - Do we need it - Part 1

For a long time I have been contemplating writing a series of articles related to innovation. Let's consider this article to be the first one. I want to talk about the importance of innovation inside the organization. Yes, it sounds obvious that we need innovation but not so, how much or who should do it and so on. Let me start with some examples from recent history:

1. PALM – The company that created the first hand held device. But, unfortunately, failed to continue innovating by adding mobile phone capabilities to it, or enabling real time synchronization and so on. When Intel completed the development of the radio chip set, they offered to PALM to use it; unfortunately, the company refused it. They do not exist anymore.

2. RIM – Yes, they jumped at the opportunity of using a new Intel chip set and created the first Blackberry. Unfortunately, they did not see the importance of being able to have a full internet connectivity with a great user experience. Its web browser was useless for many years and they did not do anything about it. Yes, Apple recognized the opportunity and came up with the iPhone. The rest is history.

I can go on and on with examples including Apple Computer Corp. at the time when Steve Jobs was not with them. Eventually, every company that stopped innovating suffered big time.

In last decade of my life I have been working in the marketing/interactive agency sector. This sector is used to a business model that requires customers to finance any work that agencies do. Nothing wrong with this except...

The problem with this approach is that you, as an agency, are not a forward thinker visionary that will drive customer business. Where is that value that will make your client love you, respect you and eventually keep you in the business?

Clients expect from you to be innovative and to help them drive their business. And to do so you need to invest in your people, projects and relationship with clients.  

Same as we expect from our employees to invest in their professional building, our clients expect from us to invest in our own and their business. They want to hear we are forward thinking and see our ideas in realization. Of course, that doesn’t mean that we are going to build products and solutions for free. 

One way you can address this is by creating prototypes and allow clients to get a feeling for the final solution. This on one side, does not require a large investment; and on the other, it opens incremental business opportunities by organically growing the account. 

In my next article, I will continue with some thoughts on how can you implement innovation inside your organization. 

Lean Canvas in Action - Part II

Moving on with our example, the next step is to define the channels.

Channels
This section defines how we are going to reach our customer segment, attract them to come and use our site. In the early stages of our product, we are looking to learn from our early adopters, what is working or not to perform A/B testing and to feed that learning back into our site. Channels can be grouped into three categories: Owned, Payed and Earned. Here are some examples of these categories:

Owned:

1. Company's Web sites (our product)
2. Company's Blog
3. Company's Facebook Page
4. YouTube Channel 
5. Company's Twitter account
6. E-mail newsletter

Payed:

1. Pay-Per-Click campaigns (AdWords)
2. Display ads such as banners

Earned:

1. Facebook fans, likes and shares
2. Tweeter followers and RT (retweets)
3. RSS feed subscribers

Some channels that we are going to use for our site are listed below.

1. Our Web Site
2. iStore for distribution of our mobile app
3. We are going to use this blog to generate awareness
4. Google is our best friend - invest in key word research
5. Benefit from you social network
6. YouTube is for free
7. Facebook and Twitter to communicate with your followers
8. Word of mouth
9. Limited investment in AdWords

In the early stages of the project, during the product testing, it is hard to spend marketing dollars and efforts on SEM or any other marketing program (TV, prints, or trade shows).

Great. The next step is to figure out how we are going to monetize our property? It is time to identify revenue streams.

Revenue Streams
The time came to proof our business' viability. Even with a minimum viable product, we still need to proof that the problem trying to be solved is worth solving. If the customer is willing to pay for the service or product, it proofs that it gives him value. On the other hand, there is a strong argument to defer pricing in order to accelerate the initial learning.

In our case, we are going to provide free membership to the groom, bride, family members and friends. Also, we are providing a free limited membership to all service providers. Where is the revenue coming from then? Here are channels that will bring us revenue:

1. Advertising space
2. Extended functionality for service providers, for example:
1. Functionality to upload marketing material (movies, images)
2. Functionality to upload and maintain catalogues
3. Functionality to participate in bidding offers
3. E-commerce (affiliate programs)

And the next question is how much is this going to cost us? We need to identify all our expenses in this block.

Cost Structure
Here we need to list all cost; so lets do it.

1. Cost for initial interview sessions (~50 customers - from different segments)
2. Cost of building MVP
3. Initial cost of production hosting (cloud solution)
4. Ongoing cost for marketing team
5. Ongoing cost for development team

Now we can use our revenue stream and cost structure to calculate a break-even point and estimate how much time, effort and funding we need to get there.

Key Metrics

Yes, it came time to measure how our business is doing. We need to identify key metrics that will provide us real time update. It is important for us to identify actionable metrics; here we go:

1. How many sign-ups - end users
2. How many wedding planners created
3. How many friends/family members invited
4. How many mobile apps downloaded and actively used (actively needs to be define as well)

I am going to stop here with my metrics as this is enough for the initial release. It provides an indication if my end user likes my product and is willing to use it or not.

And the last step is to identify its Unfair Advantage.

Unfair Advantage

Something that others cannot copy so easily. Here are few examples:

1. Brand recognition
2. Existing customer base
3. Personal authority in the space
4. Know how - patent holding

This is very difficult to identify and that is why it has been left for the end. In my case, I am going to leave it blank - let's keep it as my little secret).

We have arrived at the end of our first canvas. What is left now is to experiment with all our assumptions (or how they call them these days: hypotheses).

The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses  Eric Ries $14.32

Running Lean: Iterate from Plan A to a Plan That Works (Lean (O'Reilly))  Ash Maurya $16.49

Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers  Alexander Osterwalder $20.21

The Startup Owner's Manual: The Step-By-Step Guide for Building a Great Company  Steve Blank $23.50