Editor’s note: Joe Procopio is the Chief Product Officer at Get Spiffy and the founder of teachingstartup.com. Joe has a long entrepreneurial history in the Triangle that includes Automated Insights, ExitEvent, and Intrepid Media. His columns are a regular part of WRAL TechWire’s Startup Monday package.
RESEARCH TRIANGLE PARK – What if I told you that building an innovative product can be broken down into a simple three-step process?
Look, I would never claim that I could boil down the source of innovation into a modest three-step plan. Innovation is the one part of starting up that is most definitely magic, because it’s the one part that’s fueled solely by creativity.
That innovation magic has a good side and a bad side. The good side is what keeps me an entrepreneur. The bad side is when the mystery behind the magic makes innovation-on-demand seem impossible. If we’re going to be honest with ourselves, entrepreneurs aren’t magicians.
Except maybe Musk. I can see a top hat and a cape on that guy.
The truth, however, is that innovation magic doesn’t just happen. Innovation comes about when you do something wrong for a long time and are compelled to start doing it better.
That’s a scenario you can put a process around. Here’s the creative process that I’ve used for over 20 years to build innovative products.
Stage 1: Exploration
All innovation begins with experimentation — good old-fashioned research & development. But that doesn’t mean scientists in lab coats. It means identifying a problem and exploring it.
That actually begins with data gathering — taking a step back from doing what you do and analyzing and measuring why you do it the way you do it.
Now, most entrepreneurs resist this. Not because they don’t want to do it, but because they don’t have the time, because of the death spiral.
Yeah, the death spiral. I’ve going to explain it with some math, so bear with me.
Let’s say it takes you X hours to generate Y revenue. As you become more successful, and because there are only so many hours in a day, you have to start hiring people to go from X hours of output to 10X hours of output in a single day.
But your revenue — Y in our equation — rarely increases at the same rate you increase X. The non-innovator keeps chasing the revenue and hiring more people. Eventually, productivity slows and 10X becomes 9X, then 8X, and so on. You hire more people, you keep producing at a lower and lower productivity.
That’s a death spiral.
The innovator takes a couple of those resources out of production and puts them on a mission to increase the output per resource. They absorb the revenue hit of removing those resources in order to improve the productivity of the rest of the resources. They decide to temporarily survive with 8X productivity for a little while to get to 15X or 20X or even 50X.
You can replace output in this example with sales, which is where scale meets growth. Adding more salespeople might get you a linear increase in sales. Making more productive salespeople, armed with better tools and information, will produce a more exponential increase in sales, which scale requires.
Either way, the biggest barrier to innovation is the lure to keep doing the same thing the same way and living with a diminished result.
Stage 2: Execution
Now it’s time to be bold. Like a stand-up comic testing new material at small clubs in front of small crowds, this is where you get a sense of whether you’re innovating or not. Regardless of how right or wrong your hypotheses may be, you won’t know for sure until the market gives you feedback.
Experiments are fun on paper but they suck during execution. That state of suck usually begins with getting started — as in, there’s really no good way to figure out how to implement the plans you’ve drawn up on paper.
You have to start somewhere, so start small and fast. Try to rope off the impact of any changes by limiting the change to a small amount of customers doing a small amount of business in a way that you can test quickly and accurately.
This is also the stage at which you put maximum ego into your efforts. If you don’t give the changes their best chance to succeed, they will fail, because human nature tends to bristle at change. You have to believe you’re right until you are proven wrong, and you have to use that belief to sell change to a wary customer.
But… don’t be afraid to be proven wrong.
Stage 3: Extrapolation
Once you start measuring the impact of your innovation, the question you’re trying to answer is: “How wrong was I?”
If you’re innovating properly, you’re doing something completely new, so there isn’t any predetermined benchmark for your success. In my experience, there are three decisions you’re trying to make:
- Is this change innovative? The only answer to this question comes when the result was a smashing success. If that didn’t happen, ask another question.
- Should I keep experimenting? If you’re not seeing a smashing success, then the change might either be “good enough,” or you might believe you can get to a smashing success with a few tweaks. If the former, live with what you’ve got and move on to innovate somewhere else. If the latter, keep exploring with this innovation.
- Is the change worth the result? Some changes, in fact probably most, just won’t move the needle enough for you to push through beyond your test case. When this happens, let it go and move on.
For this final stage, you should do a complete reversal of the previous stage and take the ego completely out of the situation. If the market tells you that you were wrong, they are the only arbiter that matters.
Creating the proper environment
It’s just as important to foster the right environment and mindset for innovation. Your environment might not encourage change, and that might be out of your control.
So here are are a few ways to make innovation sneaky:
- Slow it down and parse it. Make changes tempting and low-risk, using small wins to build into bigger wins.
- Side-hustle it. Build out a labs or innovation unit that doesn’t impact the real business until there is success.
- Leave. Entrepreneurial-minded people don’t leave companies because they’ve outlived their usefulness. It’s the opposite, the company has outlived its usefulness to the entrepreneur.
One of my newsletter readers suggested some tips for getting into the innovation mindset:
- Listen to your trusted resources. They tend to accept “crazy” ideas, and that kind of openness is usually the foundation of innovation.
- Keep the environment upbeat and rules-free. Encourage ideas with no limits.
- Meditate or use some other exercise to boost your creativity.
Innovation is indeed magic, but it’s not dark magic, it’s definitely necessary magic. It’s not sleight-of-hand, it’s the creative process applied to a known goal. With the right environment and the right process, innovation on demand is not only possible, it can be the secret to your startup’s success.
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