Choosing ideas that get traction
Tuesday, March 8, 2016 at 12:00PM
Why a marriage of convenience works
The test of any innovation is convenience. Does it make things easier? There are lots of inventions but few successes. Some are inspiring in their technical wizardry; others are aesthetically pleasing or inexpensive to produce. But they don’t get traction unless they make things more convenient.
For innovation to succeed, it has to mobilise either latent demand or latent supply, or both, and bring them together in a convenient package.
What does that mean?
Remember Iridium? This early mobile phone system was revolutionary. In 1998 – with the iPhone still a decade away – it launched no fewer than 66 satellites to let you connect with anyone, anywhere, anytime. You could make a call from the middle of the Pacific to someone at the North Pole – something the iPhone still can’t do.
Iridium worked but the signal was quirky. The handsets were clunky and it was expensive to use. In short, it just wasn’t convenient. Having spent well over US$1bn, the firm filed for bankruptcy a year after launch and was later sold to private equity for US35m.
Today’s mobile phones are the opposite. They are cheap, easy to use and work with existing, earthly technology like phone towers and wireless technology that was invented 100 years ago.
Why innovations work
What mobiles do is mobilise latent demand – in this case, the demand for communication. That’s a basic human instinct. It might be a need, and it is certainly a desire. It explains the explosive market penetration of Facebook or Google. The content might not be impressive, but people want to communicate it anyway.
That desire for connection represents a vast reservoir of demand. Find a way to communicate anything more conveniently and that process will get traction – be it arranging travel, passing information, making a payment, making an order or just making contact.
On the other side of the equation is latent supply. That’s stuff that has always been around but hasn’t found a way to express itself. Think empty car seats and spare bedrooms. The success of Uber or Airbnb rests on the convenient marriage of this unutilised supply with untapped demand.
What does this mean for innovation strategies?
Start-ups, innovation hubs and the R&D labs and ‘skunk works’ of large corporations often face a difficult decision. It’s not hard to build a portfolio of innovative ideas. The challenging part is deciding which one to back.
The referee is convenience. Breakthrough technologies take the ease of any transaction to a new level. They make it simple. It’s the difference between an ordinary app and a killer app. The ultimate arbiter is whether or not users find it significantly more convenient than their current process. That's what a successful innovation is.
Iridium was too complex and unwieldy for the mass market. The firm eventually found its latent demand but it was years later and there was less than first thought. Reborn and now profitable, it found a market in the scientific and defence space where it serves more complicated demands, including making the odd call to the North Pole.
ideas, innovation, start-ups
Reader Comments (1)
Totally brilliant, as usual!