Almost every market segment in today's economy is subject to it: innovation. It is becoming easier and easier to launch start-ups and modern technology is constantly making progress. Products and services in literally every one industry in the world are therefore susceptible to innovation.
There are roughly two ways for an entrepreneur to respond to the innovative world around you: either try to get involved and start innovating yourself, or close your eyes and stick to your existing product and vision. Surprisingly many companies do the latter. "We just have to make sure that we are the best at what we do." Of course, wanting to be the best is not a bad intention, but time and again history shows that it is precisely the innovators who have the longest breath . But innovating costs money, without knowing in advance whether you will get anything in return. And how do you actually know in which direction you have to innovate? Smart innovation, how do it you like that?
Innovation is not a luxury, but a necessity
We start from the beginning: every entrepreneur should realize that your innovation department (or team) is not a luxury prestige project that you can always close when worse times start. Innovation is necessary in almost every industry in order to remain relevant to your customers in the longer term.
McKinsey states that a healthy company reserves around ten percent of its resources for innovation. Naturally, you spend the majority of your budgets and FTEs on your core business, but innovation is not something you occasionally add to it; it forms an essential part of your business model.
Lean and agile
The magic words are lean and agile. The ten percent in resources may still be a huge pile of money and staff at the largest companies, but for most companies it means that you have to be creative and not waste. You prefer to find out if a certain innovation makes sense even before it has cost money to develop it. But is that possible?
Lean (translated: lean) development means that you focus on the core of what you want to innovate and do not waste any money, time or other resources on peripheral issues or unnecessary embellishments that are completely unnecessary at the moment. It is related to the concept of agile (translated: fluent). Agile development means that you implement developments step by step and do not continue to build on forever until a product (or test version) is complete. In the context of the development of innovations, lean and agile development lead to a so-called MVP: Minimal Viable Product.
Innovate with an MVP
Strictly speaking, the term 'minimal viable product' is not correct at all. An MVP does not have to be viable ('viable') at all to be valuable as an MVP for your innovation research. What an MVP must meet depends on the type of product you want to design or the type of feedback you want to receive.
In the field of product innovation is an MVP actually nothing less than a (whether or not actually existing) concept that you want to be able to test with your audience. Testing can be done in all sorts of different ways, but the following applies to every MVP: it is anything but a finished product. An MVP is by no means finished. As a rule of thumb you can remember: if you eventually develop your MVP into a fully-fledged product, you will ultimately be ashamed of that MVP. (And there is nothing wrong with that.)
Today, four types of MVP are often distinguished. We walk through all four of them.
Yes, you read that right. Simply pretending to be offering a new product or service is a manifestation of the MVP. Keep in mind: we are talking about innovation here. At this stage of the research, we just want to know if there is a future in a test balloon that we release. Most ideas from your innovation team will die in beauty, but it's just that one idea that is well into a beautiful, innovative product.
By pretending that you have developed (or will develop) a new service, you can already offer this service to your customers. Based on their response you can determine whether you will continue with the development and, if so, how. Do customers want to use your product? Does it seem useful to them? Do they even want to pay for your product?
Groupon is a famous example in this segment: the first test version of Groupon did not work at all. It was a website on which discount coupons were offered, but only after you sent an e-mail containing an order did people start working. Like a madman, coupons were made - manually - and sent to you as a PDF. The entire underlying system - an automatic coupon system through which you can take advantage of great (group) discounts - did not yet exist at all. It all still had to be developed. However, Groupon pretended that it already existed.
2: Digital elevator pitch
It has since become a somewhat outdated principle, but in the past - when the director was still working on the top floor of the office building and was only in the elevator during lunch time - it was considered crucial for business people to elevator pitch have ready. Being able to impress the director within twenty seconds, if he was allowed to stand next to you in that elevator.
Nowadays the inspirational vlog the new elevator pitch and set it up YouTube instead of practicing it in front of the mirror every morning. And it is a form of an MVP: make a video in which you reveal a new innovation. Instead of a video you can of course also use a landing page or other digital content: as long as there is a place on the web where people can experience your innovation and get the opportunity to interact. Explain your idea and ask for feedback. What does your audience say? Is the video or page often shared? Is there a lot of interaction? A healthy dose of likes?
Dropbox once started with a YouTube video like MVP: just explain and show what you want to offer, and then see what happens. The video became a huge hit and proof that the service really had to be brought to the market.
Crowdfunding must be one of the best inventions ever for any entrepreneur. Customers already pay for your product while you have not even developed it. Through crowdfunding you can show a product to the world and ask for an investment or purchase. Early birds get a discount or another benefit, but more importantly: invest money in your idea. Once you have enough investors, you know two things for sure: you have enough money to realize the idea, and you have a loyal clientele to start with.
Another advantage: crowdfunders are generally people who have a good eye for innovations. They know how to value innovative ideas. If you get a lot of followers through a crowdfunding campaign, you can be confident that there is a future in your idea.
4: One function
In order to appeal to the largest possible target group, we often build products or services that are full of options. That is nice and nice, but with your MVP you often only want an answer to the question whether there is any question at all about your product. Then it helps to develop an MVP with only that one core functionality.
All the functions that you offer will cause reactions. If you put a website online with six functions, you will receive feedback on all six functions. It is then difficult to determine whether the website is a good idea in itself.
The first version of Facebook was nothing more than a page with your photo and your profile. No timeline, no apps, no videos, nothing. The question that Zuckerberg wanted to have answered: do people want to be able to view other people's profiles? He only needed one function for that: creating a profile. The first additional function he added? The relationship status, because feedback on his MVP showed that many people looked up profiles of acquaintances they secretly liked. Something he would have found much more difficult if he hadn't put that bare, single-function MVP online.
Lean development with the design sprint
So you have a clear idea of which innovation you want to test and you have chosen an MVP that best fits your innovation. How are you going to shape this? How do you smoothly arrive at that MVP, so that you receive feedback with which you can continue?
The design sprint is a method that can help with this. The design sprint forces you to achieve a demonstrable MVP in a very limited time, with a limited group of people from different disciplines.
A typical design sprint lasts three to five days, so no longer than a working week. You ensure that all required disciplines that are relevant to the innovation that you want to test are present. Think of IT, marketing, management, development, etc. You no longer need help from outside your workgroup for this sprint. Make sure you also have a product owner with final responsibility, so that knots can be made if necessary. It is also handy to work with a scrum master; someone who is not involved in content, but who guides the process, acts as a timekeeper and checks whether everyone is in their role.
During a design sprint, the working group takes place in an area where you can work pleasantly for a week. Distraction in the form of mailboxes or smartphones is not accepted: the working day is spent solely on the sprint.
The idea of the design sprint is that you can already show an MVP to potential customers on the last day and will actually do so. This can be any type of MVP from the list above. It is useful to prepare such a test day, and therefore to have a group of willing customers ready.
How do you get useful feedback?
The ultimate goal of almost every MVP is to gather useful feedback to get started. But how do you do that in a smart way?
If Henry Ford had listened to customer feedback, he would have bred faster horses instead of building cars. Therefore, do not simply copy the customer's wishes, but listen to the wish behind the wish. After all, you cannot make your customer responsible for coming up with the innovation.
You do not collect the most useful feedback by asking your customers what they want or by asking if they are satisfied, but by thorough user research (user research). Hereby you investigate how people (want to) use your product or service and what they think is important. You do this at an early stage - that is why it is part of the design sprint - so that you can fully tailor your product to the way in which people ultimately want to use it.
A good example of successful user research that has taken place in the Netherlands is the digital television decoder from KPN and XS4All. Around 2011, all digital receivers were large, impressive devices. However, user research - originally aimed at discovering new desired functions - showed that mainly women were bothered by the large design. And so they finally came up with a receiver that had no extra functions at all, but was just four times smaller. It was the best conceivable innovation at the time.
Finally, in the context of customer feedback, it really helps to make a limited number of functionalities available. Every function that you build will be appreciated by a (very limited) group of users. Removing those little-used functions at a later stage, in turn, encounters negative responses. In this way you are ultimately more concerned with sentiment management than with innovating your product.
Therefore, develop step by step, function by function, and research how users deal with that function. Adjust things based on their feedback, and start testing again immediately. Only continue if you are sure that you are on the right track. And you keep getting negative reactions? Then something is probably fundamentally wrong. Then don't be afraid to take your loss and start over. That may be a waste of your resources, but continue on a dead end and ultimately make a service available that people aren't really waiting for? That is only a shame.