Why are the chances of sparking long-term success with an innovative idea 1,700 times better at a large company?
It’s not because only large companies are coming up with innovative ideas. Innovation seems to be coming from every corner of the world, from all different types of people and organizations. This is particularly true of the wide range of simple solutions that are available to obtain funding, market individually, and ultimately reach customers—making today an innovator’s dream.
With so many informal ways to bring new and innovative ideas to market, why are chances at long-term success so low? “Statistically [an innovative idea’s] chances of success are … 1,700 times better if [it] can benefit from a strong existing business and the scale advantages of an established company.” (Zook, Chris. “When Large Companies Are Better at Entrepreneurship than Startups.” Harvard Business Review, December 27, 2016.) At Logic20/20, we believe that this success is actually driven by more than just company size. Having the ability to leverage a strong existing business and the scalability of a large company may help chances of success through market presence.
But our perspective, informed through our work with large product-driven companies, is that product innovators increase their chances at success by applying a structured and rigorous review process that fully vets and tests their ideas before going to market. This is not to say that all large companies do so; some believe in the fail-fast approach—to try something innovative that, if it fails, at least has failed quickly. But for many companies, it is not worth taking the chance at failing fast if the investment is high.
Logic20/20 believes that most projects, as designed, are too complicated. We are focused on providing clarity that accelerates decision making. This is why we have developed an approach that can be tailored to your specific needs and outcomes and exposes market and business-critical details. Our approach provides rigorous analysis and uncovers critical insights by delivering a three-phase product innovation methodology.
Market Sizing establishes the total available market (TAM); this breaks down into the serviceable available market (SAM) and the serviceable obtainable market (SOM). The core purpose of this phase is to validate the innovative idea and to perform a constraint analysis to assess whether the idea is worth the investment. Outputs in this phase typically include sizing estimates, high-level trend analysis, and prioritization lists.
Customer Segmentation delivers an understanding of targeted consumers. We take the high-level perspective deeper by developing a persona around each of the core segments. These personas help us identify insights on customer pain points, as well as their wants and needs. This phase is an imperative step to delivering targeted, impactful messages to the market. It also supports future market activities and customer experiences.
Channel Development/Go-to-Market planning provides a deeper level of insight on both the market size and the customer. We perform a channel analysis to see where these customer segments will purchase and help prioritize investments. Finally, we develop our insights into a supporting business case in which we highlight potential revenues and expenses—thereby providing informed assumptions on profitability and market penetration. We work closely alongside you, using our insights to collectively develop a go-to-market plan that will capture the ROI that our market-sizing efforts suggest.
With a structured approach and rigorous process, we help product innovation teams realize significant benefit or cut bait earlier. Whether you have a few product ideas as a start-up or have a larger go-to-market and are looking for more support, its the same approach for success.