Creating the “Next Big Thing": How to Inspire Innovation

By Brad Bonnett 

How do I apply all my learning’s about lean startups such as finding product market fit with a minimum viable product if I don’t have an initial problem that I am trying to solve?  I know that I want to build something that changes the world but I continue to struggle to find what product or service I want to build.  During our class with Fred Wilson he said that “If you have an idea that you can't get out of your head, do a startup. Otherwise join a startup.”  Although I appreciate the simplicity of this view and the experience that Fred brings to the table I am dismayed to think that unless I stumble upon an idea that really sticks with me I am going to be excluded from starting my own company.  Therefore I tried to put together a process that can help inspire innovation for those of us who are lacking an idea to create that “next big thing!”

I tried to take the best practices that I have learned from my Managing Innovation class at HBS and conversations that I have had with other LTV students and formalized a three pronged approach to innovating:

1. Product – What is the problem a certain product solves? Maybe discover a problem the customer doesn’t even know exists
2. Business Model - Take an existing problem and solve it with a new or different business model
3. Efficiency - Solve an existing problem using the same business model with a more efficient solution

Product Innovation:  Product innovation is all about asking the right question i.e. “Can you have light without fire?” Once you have the right question inventing the light bulb is just an exercise in problem solving.  Continuum, an innovation consulting firm, uses a process focused on the customer and works to understand everything about a certain customer activity.  For example, when working on a project for P&G’s cleaning products division Continuum realized that of the 12 steps that a customer went through to clean their floor, 5 of those steps were cleaning the thing you were cleaning with.  With that knowledge it was much easier for them to design a disposable cleaning product later named “Swiffer.”

Business Model Innovation:  Evan Shore a fellow LTV student used the example of Groupon to explain this to me.  Groupon gives large groups of customer’s access to retailer discounts.  Alternatively Gilt Group innovated on that model and instead gives small groups of customer’s exclusive access to retailers.  Where these two models are both driven by sales teams finding deals a third spin on the same problem would be a customer driven model where customers vote for companies they want to receive coupons from.  Each of these models solves a similar problem but they all approach it from different angles.

Efficiency:  Although this method was the driving force behind many of the dotcom bust I still think it is a viable option.  The basic idea is to utilize technology to eliminate cost from the value stream.  Can you use AWS instead of buying servers, can you use Hadoop instead of paying for SQL, can you outsource you accounting department entirely?  With the myriad of new technologies and companies popping up in the B2B market it has never been easier to start a company and keep your cost low.  In old industries many companies are slow to adopt these new technologies or flat refuse to change with the times.  I would argue industries like that are ripe for technological innovation.