Most startups now follow a customer development approach to innovation as follows:
- talk to users about the area you want to innovate
- identify their pain
- come up with ways to solve their pain
- show them your ideas
- get feedback
- adapt your best idea
- repeat the process until you find what they are willing to pay for
- build an MVP for that
Using validated need as the starting point for innovation makes sense: if people are not interested in the first place then there will never be a business opportunity.
However, in practice, start-ups and corporate venture teams fall into some pitfalls with customer development approach:
- over-indexing on pain: tracking pain to the exclusion of other forms of insight such as data patterns, market trends and technology developments
- prioritizing quantity of testing over quality of insight: rushing to do more and more user interviews while spending disproportionately less time making sense of interview findings
- post-rationalizing negative feedback: disqualifying users who give low NPS scores on grounds that don’t fit the target profile, even though positive scores always get counted
- staying in the building: spending all the time in the office doing Zoom-interviews to try and get the score up before the sprint finishes
These behaviors only increase confirmation bias and lead to a make-believe innovation concept scoring high on desirability but low on feasibility and viability.
Some ways to avoid these traps are:
- spend more time on synthesis: spend at least 25% of interview time debriefing what you learned, linking insights and building strategic hypotheses that can be reflected back into the design or separately explored
- use multiple lenses: explore the context of user pain in terms of use cases, financial and non-financial costs, channel structure and regulation, and apply these insights to enhance the functionality of the design
- get out of the building: go and observe potential users, talk to innovators and researchers, educate yourself about the industry and context of the venture, come back, share and iterate
- be strategic – use proven strategy tools like value chain, market segmentation, and cost structure to dig into venture positioning and economics and feed this back into the prototype
Doing these things generates a depth of understanding about the pain and the business opportunity to solve it, that can be factored into design features to make the overall product more robust and viable.
Desirability is necessary but not sufficient for a successful product. There is no point in being fast at the expense of insight and validation.
Make sure your startup approach includes time at the design stage for gathering a variety of insights, sense-making, and strategic thinking, and use these to design a viable concept. Then begin testing.