How to predict Innovation
Bringing predictability into the unpredictable
We cannot make Innovation predictable but we can certainly make it less unpredictable. What I learned in operative product work over the last 10 years focussing on innovative bets:
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Innovation and predictability exclude each other almost. If things were easy to predict they would not be innovative. But we need predictability in business to drive anything. Is there a way to balance it? Theoretically yes but you won’t know whether you did the right thing until you did it.
But there are 3 key learnings that apply to any innovation bet which I follow almost religiously:
Product Market Fit
Any innovative bet or new feature that you cannot just incrementally improve requires a new product market fit.
(Product-market fit: How much your users love your product and whether the market for it is big enough)
Finding a product-market fit for an entirely new product in a new market is like starting a new company. It takes an average of 18 months and you most likely won’t make it (90% failure rate).
But because we might have an existing company we can derisk any bet by eliminating one of those two components:
Expanding your product without changing the market
Expanding into a new market without changing the product
Going, either way is fine in most cases and is already taking out a major uncertainty by introducing 2 dimensions on where your product could fail. Once you have succeeded in one you can still do the other one after.
Accepting less certainty
Accept that certainty cannot be reached and that it will always be limited:
Since you cannot see the entirety of the problem you won’t be able to predict the length of the project by estimating individual tickets/epics. Get to a rough prediction and then extend it with a lot of reserves.
Doing proper business cases by product managers can make sure that you don’t waste time with qualitative research. Define the ICPs (Ideal customer profile) first based on what you know already, then start research.
No deployment for innovative bets without thinking properly about tracking. In tendency, we spend more time on proper feedback loops than the actual product. Not fun but necessary.
Despite the above safety measures you will likely fail more than succeed.
Having a team that only does innovation bets is sooner or later going to be completely demotivated unless they get lucky. It’s important to balance their work with things that also succeed safely.
Have a culture that rewards learning not just success. Once a bet gets killed don’t just bury it. Do a retro analysis on it and what went well and that back into the company through presentations etc.
Make innovative big bets part of the company’s strategy. Reserve 20% of the time for big bets explicitly so teams are not scared of it.
Be upfront that you accept failed bets.
Limit yourself to product or market expansion
Do Research but limit it
Balance your expectations and be clear that a failure is an option
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