Oscar Wilde said “When you assume, you make an ass out of u and me”.
The word innovation is from the Latin word innovatus which means stemming from. In other words innovation is an improvement of something. In the world of business, the innovative products are an improvement of an existing product. All of the innovations we see today are derived from the needs of customers, this is called market innovation. An example of innovation is the business model of Michael Dell. It used to be that computers are sold as a package. You buy the whole thing from the maker and you can not choose the part that comes with it. Michael Dell realized that there are customers who want to customize the parts of their computers based on their needs and budget. So in his dorm room, he started selling “Build you Own” computers.
For an idea to be considered an innovation, it must make the life of the user easier compared to what he or she is currently using, and accepted by the general market.
As entrepreneurs we always want to come up with something new, something different and something unique to offer. There are entrepreneurs who are natural innovators who can come up with new products just by pure intuition and making assumptions. However, If you use only intuition and assumption you expose your venture to big risks, the two should always be backed up by evidence. The key to transforming intuition and assumption to innovative ideas is by asking the right questions.
Here are some questions that lead to innovation:
- How do I define my business? Define your business the way it has never been defined before. When you define your business the same way as others you become like them; differentiation then becomes minimal. The role of the entrepreneur is to blue print the business that makes it harder for competitors to copy, thus, it become truly unique. If you try to define what Starbucks is doing, you might think that they are in the business of selling coffee,( if they defined it that way then Starbucks would be just the same as their competitors) instead, Starbucks, in a very innovative way defined their business as the cafe that serves “The coffee experience”. This is so evident with the store ambiance, the music the use, the training they give to their people, the merchandise they sell, the presentation of the food and more.
- What do they hate about my product or my competitor’s product?If you know what your customers hate about your product and your competitor’s product, you can come up with features unique to your business. What is good about finding solutions to customer irritants is that there is a ready market waiting to be served. In Korea, people are so busy, that going to the grocery is so hard to accomplish. A grocery then introduced an innovative way of buying goods, a way that is so easy that grocers do not even have to visit the store. The company set up scanning walls in subways. Commuters will just have to scan the code, then the products they purchased will be delivered to them. The grocery company knows that it is so inconvenient to buy in Korean groceries so they offered convenience in a very innovative way.
- What are the needs of my customers? The primary role of a venture to provide customer’s needs and wants. In the business of college schools, students enroll because they want a job after. This then makes the role of the school not just to have a good curriculum but also create a reputation of producing highly employable students. University of Asia and the Pacific came up with a very innovative curriculum to make sure their graduates get jobs as soon as they finish school. The school introduced a 5 year program that includes a masters degree. Because of this, their graduates became highly employable. It is easier to motivate a customer to buy when you know what their needs are.
To make innovation more effective, you need to get feedback from your customers. This can be done through surveys, feedback forms and interviews. The results will give you a better understanding of the business and in the process you will be able to clearly define your business. The better you understand your business the more innovative solutions you can come up for your customers.