Innovation is a staple of corporate newspeak. Yet, the term is hard to define. Is it about the invention of a new product or service, or just about its enhancement? Is the innovator he who creates the product, or the one who turns it into business success? Is an innovative company necessarily the one that invests the most in R&D? To find the answer to all these questions, I interviewed Gregory Palliere, co-founder, and CDO of iRevolution.
Step 1: Do you have to be a garagepreneur to be an innovator?
“Any large company, especially American, is proud to remind us that it was started in a garage. Microsoft, Apple, Amazon, Hewlett Packard, are the best-known examples,” explains Gregory Palliere. The image of the garage is indeed a symbol, but it nevertheless proves by example that these leading multinationals did not need significant resources to start innovating. This first “garage” stage that of trial and error, of the laboratory, involves a handful of people who craft a concept without knowing whether it will ever be successful.
Let us debunk the myth: a large, well-established business is also capable of innovating. “Many companies have labs, small departments where initiative is welcome and encouraged. These pockets of innovation are preserved from the weight of the company’s history and allow a few people to develop their ideas and perhaps achieve breakthrough innovation.
Step 2: You think your innovation is great, but does the market think so too?
Does your innovative product or service have potential? It won’t do any good if you can’t sell it. And to do this, you will have to adapt your innovation to its market. “It is at this stage that it will be essential to embark business-oriented people in your team, going from door to door to sell your stuff and fight tooth and nail for it,” says Gregory Palliere.
This second stage of go-to-market requires an iterative approach consisting of tests and adjustments, to modify and gradually adapt the product to the market.
For example, Gregory Palliere details how a European start-up, has been induced to redesign its business model from the ground up.
The primary goal of this start-up was to connect medical experts to establish a precise diagnosis of a rare disease. It took just one year to build this business, but the GPs’ feedback was that they preferred a smartphone-based interface.
The product was therefore redesigned, but it turned out that when it was brought to market, customers were not willing to pay more than €50 per diagnosis. The idea was, therefore, to propose a treatment pathway including a diagnosis, a flight ticket to a place where the disease can be treated, and the training of local hospital personnel for post-operative follow-up. The start-up evolved its solution one small step after another, and the resulting offer ended up being very different from what they had imagined initially.
Once the offering has been adapted to suit its market, the end goal of this step is to make it known and gain market share.
Step 3: everybody loves your innovation, but are they ready to pay for it?
Step 3 is about the optimization of your innovation for its market. This step must be distinguished from the second one, for it requires a different mindset. Phase 2 was dedicated to the adjustment of one’s offer to match the market’s expectations. Here, the focus will be on the long-term viability of the product or service and the ability to deliver.
For example, Tesla has surpassed all its rivals with the development of electric cars that are high-performance, durable, and safe. In step 2 of its expansion, it promoted its top-notch prototypes and then gradually moved down the price scale to deliver more affordable models, opening up new markets. But today we can see that the Californian company is struggling to succeed in the third stage, facing difficulties with the increase of its production while controlling its costs. Nevertheless, it continues to enjoy the support of its investors in view of its leading position in the electric car market, and its results are just beginning to turn positive.
The purpose of this third phase is, therefore, to get oneself organized, rationalize costs and processes, to perpetuate the company’s activity, and derive profit.
Ignoring any of these three steps would be the ruin of your innovation
“Many companies rely on the third stage, optimizing innovations that date back to the industrial revolution,” says Gregory Palliere. “And when they realize that they can no longer innovate, they create an ‘innovation lab,’ or an ‘innovation factory,’ or buy back start-ups, and so forth. Most of them overlook step 2 (go-to-market phase) in the process, killing most of their new projects at the outset”. A typical example of this difficulty in bringing innovation to the market is Kodak. Everyone knows about the demise of the famous brand, which was put out of business by the advent of digital cameras. But it is less known that the inventor of the digital camera is… Kodak. Inventing a promising product is not sufficient to maintain success in the long term, and forgetting any of the three above steps is a threat to your ability to innovate and benefit from it.
Yann has a long-standing experience in marketing, information systems and Web marketing. He created visionarymarketing.com in 1996 and since then, he has practiced Web strategy, e-business and Web communications in the field. He was a member of socialmedia.org from 2008 till 2013. He is a lecturer, a keynote speaker, an author and blogger. In early 2014, he went from intrapreneur to entrepreneur when he founded his digital marketing agency Visionary Marketing.