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Is there a simple way to innovation and successful products? No, of course, it’s not! In Fact, most products fail. Not because we fail to build what we set out to build, but because we waste needless time, money, and effort building the wrong product — something nobody wants.
But what is the secret of good and bad innovation? How do innovative multibillion-dollar companies differentiate from others?
When Apple released the iPhone in 2007, Nokia still had about 50% market share in the mobile phone market. Although they were releasing continuously good phones, they lost their market dominance within just 3-4 years. The big problem was not, that Apple just had a great product that worked well – It was the constant belief of Nokia and it’s management to think that they know what people want. With the release of the iPhone Apple achieved to redefine the way people use phones – what led also to a total change of their behaviors and expectation to mobile phones. Nokia failed in listening to what their target customers wanted.
The story of Nokia is just one example that shows that shows with the fast evolution of technology also peoples expectations and experiences with products are changing. This is because customers today have more choices than ever before. With the rising demand for smartphones and mobile apps, Nokia had enough chances to build a product their customers want and an app-ecosystem that could compete with Apple. But they didn’t – what opened the opportunity for many other competitors like Samsung. Today people have full access to product information, online shops or price comparison sites. As products have gone from being delivered in a box to being delivered over the Internet, there’s been a dramatic shift in how customers consume, demand, and interact with products.
In the old world, failing to deliver what customers wanted, led to product failure. In the new world, repeatedly failing to deliver what customers want leads to total business model failure.
If one company doesn’t get the job done, customer simple switch to something else.
The challenge today isn’t building good products, but uncovering how well products solve customer problems or meet their needs. Today’s consumers are demanding more from companies. Customers expect products, services, and information that are timely and catered to their specific needs and desires. Traditionally, companies develop and market products based on market segmentation and demographics, assuming that the features and functionality will meet the needs of all of the customers in that demographic. This “one size fits all” mentality doesn’t work anymore today. We need to embrace the fact that customers are different now, significantly more so than previous generations.
Personas are a good way to accurately identify customers needs and desires. However, as the marketplace shifts from a mass manufacturing to a mass customization model, customers needs and desires are more accurately identified through the development of personas rather than through demographic data.
A persona represents a cluster of users who exhibit similar behavioral patterns in their purchasing decisions, use of technology or products, customer service preferences, lifestyle choices, and the like. Behaviors, attitudes, and motivations are common to a “type” regardless of age, gender, education, and other typical demographics.
Product innovation and new technology in mobile, social, and artificial intelligence allow delivering a more personalized, valuable, and immediate experiences for consumers. Customers have more choices than ever. As a result, they grow to expect this superior experience from any business they engage with.
Expectations and behaviors have totally changed. The gap between customers’ expectations and products or services they receive is getting bigger more and more. Amazon’s product recommendation “what customers who looked at this item also bought.” is a significant element of their success. Today’s e-commerce shops have to mess with this new level of online shopping experience because customers just expect this service from now on. If you want to order a taxi or book an apartment, customers will always compare the booking experience with Uber or Airbnb.
Although companies have long declared their intention to get close to their customers, the digital age is forcing them to actually do it.
The good news is that getting closer to your customers can help to reduce the risk of product failure. Practices like Design Thinking and Lean Startup involve customers even before product releases, as test and experiments are a cornerstone of innovation projects. Instead of guessing what products and features are wanted by the market, companies can adjust product and features with direct input from end users before launching it. These process not only help to de-risk product development, it also tightens the relationship between companies and their customers. Additionally, it often provides valuable information and insights about how customers think and use the products which are being developed.
What would you think if there was a manual to create innovative products, experiences or services? I’m not talking about incremental improvements, like e.g. more pixels on your screens or few more horsepower in your car’s engine…
I’m talking about disruptive innovation, that change the behavior of users while improving people’s lives!
No worries, if you’re skeptical now! In general, innovation is all about humans. Day by day, humans create things for humans!
I want to share my experience from the moment I got into contact with Design Thinking to the moment where I have noticed a deep problem for a specific group of people. That’s when I came up with a great solution to this problem and finally, we grew into a rockstar co-founding team to run a Lean Startup now.
I’m excited to share this method and experiences with you. I practice, love, use, teach and learn from Design Thinking every single day at work, and in life. And I hope to inspire others to apply it in their daily work, as I promise it will guide you to the solution of problems.
Developing successful innovative business models, products and services have become one of the most important success rate factors for today’s business landscape.
82 percent of CEO’s of world’s leading companies have concerns about whether their company’s current products or services will be relevant to customers 3 years, the “2016 Global CEO Outlook” survey from KPMG found out.
Especially in times of emerging disruptive technologies, glutted markets, decreasing product lifecycles and continuously increasing expectations of customers. One of the main reasons is digitization and the enormous speed of change.
Design Thinking is one of the methods to achieve innovation! Most successful startups have successfully applied it and continuously develop their products and services with this framework (like AirBnb and Dropbox). It goes well beyond the plain “look & feels” of an object: it is actually a state of the art problem-solving methodology!
“Design Thinking is a human-centered model that encourages creativity and innovation to create a product or service that solves a complex problem for your target customer or user. It can help you innovate a new product, design a simple solution to a complex problem, or to get the whole team involved in generating design ideas so they feel included and believe in the process.”
David Kelley – IDEO founder
The challenges of modern business, it’s global and cross-industry aspect urged for new problem-solving frameworks, capable of producing extraordinary solutions. Design Thinking offered a win-win strategy: “human-centered design that is all about looking out from the inside—rather than outside in”.
Digital business transformation requires innovative, out-of-the-box thinking. Design Thinking is a natural fit as many enterprises seek to transform and, in some cases, reinvent themselves as digital businesses. It was developed by IDEO and is taught at the d.school: Institute of Design at Stanford and HPI school of design thinking in Potsdam – both founded by Hasso Plattner (Co-founder of SAP).
It involves massive collaboration and frequent iterations and has five very clear phases:
I’m going into detail on the Design Thinking process in some upcoming articles, that’s why I’m going to skip this for now.
The term “Lean Startup” was developed in the IT industry for software startups and became very popular with the book “The Lean Startup” by Eric Ries in 2011. “Lean” principles were developed in the early seventies by Toyota to optimize production processes and reduce any sort of waste in the process. The Lean Startup process claims that the most efficient innovation is the one for which there is an actual demand by the users. Or put in other words: the biggest waste is creating a product or service that nobody needs. This concept is highly relevant for any strategy or method that aims at creating innovations.
Design Thinking and Lean Startup are not the same, but comparing them you’ll notice that they have one thing in common. It is all about the customer. Both methodologies try to identify customer needs in order to create appropriate solutions. The method of lean startup goes one step further: try to test core business assumptions early in the product development process, sometimes even before any product is built at all. Track your assumptions and learn from the insights that you have gathered during testing with your customer.
Continue this build-measure-learn cycle and make progress in an iterative way, while getting closer to the solution your customer wants to have.
At the moment I have to admit to putting all my energy and time into founding a company. It was also clear that perfect execution is required in everything we’re going to do. I knew it will be a super difficult and long way. There are many statistics of failing startups and the figure is around 90%. To become successful it’s not sufficient to have a good product idea or excellent salespeople. **The perfect balance of the right product, while serving the market with excellence and managing everything by an awesome organization, is required. **
When our founding team grew together, we’ve noticed to have a perfect balance of complementary skills – the most valuable achievement in the early days for a startup! We are convinced that we’re going to be successful, no matter where the future is leading us to, but finding a perfect set of founders is the main groundwork. Every one of us is somehow different and there are often some deep discussions. But we see this more as fuel for our spirit!
As we had founded a team, we knew that there was a growing market and had a solution for a problem so we decided to build up everything using Design Thinking methods. We wanted to execute in perfection from day 1! We created target groups, analyzed their behaviors, interviewed to understand their jobs and problems. In Lean Startup, everything is about validating your assumptions and hypotheses, so these steps were required in order to gain confidence if our tool was to solve their problem. Additionally, we created mockups and digital prototypes that we again showed to our target group to gain feedback about whether our solution is sufficient and viable for them.
As it turned out most of our assumptions were correct so we decided to build our solution – and to found our startup Pyoneer. It’s a Software-as-a-Service application for documenting, visualizing and managing all your innovation activities based on Design Thinking and Lean Startup methodologies. With Pyoneer we want to provide the right toolset for each process phase and guide the user through the process. We also want to enable access and full transparency of collected information and results for everyone – to help teams across the globe to convey the big picture in one place.
We are currently in the development and are going to release our first features the next weeks and are totally excited to see which feedback users are going to give us. We’re seeking this feedback, as it’s essential to get better and know exactly what our customers need.
We believe that if we keep listening, thinking, creating, validating, learning and always being open and transparent we’ll end up with the right amount of customer value and we’ll create a solution that people love.
As you can see we started with a Lean Startup culture and we will continue on this as we’re positive it will guide us to success! I hope I could inspire some of the readers and would be happy to hear your opinions. Stay tuned if you are interested in our path, we’ll be back soon!
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