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Surviving Innovation

Throughout my professional career, innovation has always been the focus of the environment around me. Although it can often be an abused term, this proximity to groups aspiring to be innovative taught me a lot about this elusive concept. Recently, I started reflecting on some commonalities that I encountered when dealing with innovative companies, products, and teams, and I thought it could be interesting sharing them in a post.

Although it can often be an abused term, this proximity to groups aspiring to be innovative taught me a lot about this elusive concept.

Since the beginning of my career at Google, consulting external clients on how to advertise online, I was inevitably exposed to forward-thinking companies, many of which made a fortune exploiting new and emerging business models. When I began focusing on online marketing for Google itself, I worked on many campaigns advertising products that were truly innovative, although not necessarily revolutionary or successful. Now that I work at Anheuser-Busch Inbev, I have the opportunity of change the way we bring to market a product that has been around for thousands of years.

From a company perspective, there are two types of innovation: the one that brings a never-seen-before product to consumers, and the one that changes the way products are accessed and consumed. There are also different degrees of innovation, some things can be truly unique, while others are only marginally different. But no matter the type or degree, the teams that market innovative products often find themselves dealing with the same kind of challenges.

Most people won’t “get it”

Apple NewtonWe have all heard the alleged Henry Ford quote “If I had asked people what they wanted, they would have said faster horses,” which points to the fact that revolutionary products don’t always come from market demand. But the thing that people tend to forget is that revolutionary products are exceedingly rare, and you can only start a revolution if enough people get on board. Think about Friendster (Facebook predecessor), the Apple Newton (iPad predecessor), or even Google Glass. People are more resistant to change that you may think, and while drastically different products may be appealing to a handful of pioneers (a.k.a. geeks), the common man wants to change their habits gradually and minimize their learning curve.

Introduce change gradually

When developing a product, don’t aim at completely changing the way people interact with that category, but introduce change in phases. If your product is radically different, make a reference to something they are already familiar with, and give people time to become comfortable with it until it becomes the new “norm.” Also, don’t underestimate the cost of learning: like price, it can significantly impact adoption.

Google Glass

Trailblazers are likely to fail

While at Google, I saw many products fail over time: Google Wave, Google Wallet, Google Plus, Google Glass, Helpouts, and so on. Their problem, besides being too “ahead of their times” was that they also entered the market with unrealistic expectations. In spite of their failure, their core technologies now power other very successful products. I remember playing a very early version of Pokemon Go in 2013, but at that time it was called Ingress (and there were no Pokemon in it).

Make failure part of your plan

Startups do this all the times, they launch a product, they see it failing, they use a key component or technology to build a new product that allows them to pivot and finally build a successful company. Don’t look at your product (or company) like a business relying on a “killer idea,” focus instead on your core competencies that give you a competitive advantage, and think how these can be marketable regardless of the business.

Confusion is closer than you think

Over the years I’ve seen many groups, companies, and teams trying to introduce a product to market without being able to articulate the benefit it was providing to their consumers consistently. Others lie to themselves about how much consumers would want something. You may have the largest assortment, the lowest lag time, or the lowest speed to delivery, but the fundamental question is “why should a customer care?”; if they are contempt with the way things are, they are not going to care about your business operating metric.

Articulate clearly your value proposition in a consumer-facing way

A clear value proposition
Pied Piper – A clear value proposition

Invest time in spelling out why consumers should care about that thing that makes you (or your product) unique, and make it all about it: marketing has always been about addressing or creating a need, demand is the desire of fulfilling that need. Your communication focus should be reminding customers how much better their life could be with your product, while your internal team focuses on finding better ways to addressing that need.

The path to mass market is much harder than expected

Quirky, a promising faliure
Quirky, a promising failure.

One thing I’ve seen over and over again, are companies underestimating how difficult will be for your products to become mainstream; they fundamentally believe in their product, they saw an initial positive response, and they forecast future market response based on early interactions with the customers. The problem is that nowadays, thanks to the internet, it is relatively easy to find a niche group of “first movers” that will fall in love with your product. The mistake is to base the next year budget on that initial response because expanding beyond that core audience may see the cost of acquiring new customers is 2, 4,10, or 20 times higher than forecasted. Building awareness and education will likely consume most of that budget: as referenced above, while the “early adopters” will be willing to invest their own time in research and understanding, convincing “late movers” will require much more of your resources.

Budget for the worst

Rather than lowering the expected cost of new user acquisition, in the first few years of activity, a company should plan for increasing costs of acquisition. Efficiencies from marketing optimization are often not as big as forecasted. This strategy is advisable also because if things turn out better than expected, you can increase your rate of growth, but if you budget too optimistically, you run the risk of running the business to the ground.

You need competition to succeed

The more innovative the product is, the longer it’s going to take customers, adjacent industries, and regulators to catch up with it. Even the richest companies in the world have failed to introduce new products, because shifting customers perception and lobbying regulators to allow them to operate in the space, requires an effort that is often too big for just one company.

Welcome competition

Being a first mover brings many advantages, but you need other players to create an established marker. If you are alone in the space for too long, you should start to worry.

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