Unlike classic linear development (idea-prototype-production-sales), lean innovation is based on merging product, customer and market development. There is a danger of developing products and services with an insufficiently big market (hallucination) and/or ones for which the current market is inaccessible (fata morgana). Luckily, there are experiences on how to look for high-impact innovations in a way that requires the fewest resources, in time as well as money.
Before we work out the entire topic in detail, we should emphasise that we have to find the right thing as soon as possible, even before we tackle it in the right way. So, first we answer the questions why and what and only then ask ourselves how!
Fewer resources for a better effect
A limited amount of resources is very important in innovation because in abundance (comfort, ease) little is done or changed. Financing (allocating resources) should be gradual, much like the experience is gained gradually. Even children don’t get a motorcycle right away, but rather start with the training wheels.
Too early and too extensive financing can be devastating. Getting capital or the CEO’s agreement also isn’t real idea confirmation. The idea can only be confirmed or disproved on the market with consistent confirmation of individual elements of the business model. In the first stage – the stage of problem/solution fit – really small resources are usually enough.
Innovation is risk
Without a safe environment, where failure is an integral part of looking for business models, lean innovation won’t be possible. Faster learning about what works and what doesn’t is necessary. It’s better to fall 30 times from 1 meter than once from 30 meters (Deep Kapuria, India).
The best insurance for innovation risk is consistently implementing lean development stages, the mentioned daily (starting with the riskiest assumptions with the biggest impact) and weekly (what we learned) routine.
Monitoring progress
Trust is a nice virtue, but monitoring is still necessary. Regular weekly reports about what we learned are very effective: what we think we did, what happened, what we learned, what we will do next. The management will only support activities as long as they believe the team that they can create a good business model. They will only do the first bigger investments after the team reaches the product/market fit. For more guidelines, check Investment Readiness Level approach.
Visualization helps
Stick business model drafts, experiment plans, field reactions, dilemmas to walls, doors, closets and even windows … Such a space will bring the entire team closer and help it focus. Meetings with the management of course take place in this same space and not in the main office or the boardroom.
Your goal is to find and develop solutions that the user wants, are technologically doable and economically justifiable, and will change market conditions. And your final goal is to find the right offer price in the scope of the right business model.
