{"id":633802,"date":"2017-12-21T00:00:00","date_gmt":"2017-12-20T23:00:00","guid":{"rendered":"https:\/\/www.ie.edu\/insights\/latest-news\/articles\/the-agile-innovation-of-startups\/"},"modified":"2020-05-08T12:18:58","modified_gmt":"2020-05-08T10:18:58","slug":"the-agile-innovation-of-startups","status":"publish","type":"articles","link":"https:\/\/www.ie.edu\/insights\/articles\/the-agile-innovation-of-startups\/","title":{"rendered":"The Agile Innovation of Startups"},"featured_media":636362,"template":"","meta":{"_has_post_settings":[]},"schools":[],"areas":[16,17,21,24],"subjects":[],"class_list":["post-633802","articles","type-articles","status-publish","has-post-thumbnail","hentry","areas-competitiveness-growth","areas-entrepreneurship","areas-innovation","areas-strategy"],"custom-fields":{"wpcf-article-leadin":["How can you find good, innovative ideas that lead to business opportunities? Three exploration frameworks\u2014changing what doesn\u2019t work, making things easier for customers, and making things more affordable\u2014can reduce the risk and uncertainty associated with new projects."],"wpcf-article-body":["Startup<\/em> is a temporary status\u2014a term for an organization whose vital objective is to launch a new business model or open up a new market. For such companies, the model that identifies four primary sources of innovation<\/a>\u2014product, process, business, and customer\u2014is inappropriate, an obstacle to the development of truly transformational ideas. Startups look at innovation from a different angle. After considering the needs of a particular industry or market, they deploy a new plan to improve the industry (incremental innovation) or create an entirely new market (disruptive innovation).\r\n\r\nInnovative ideas, by themselves, are not enough; they are just one element of the journey towards market domination. Just as a drug can cure one disease but not another, startups have to apply innovation<\/a> in an intelligent way that actually solves their customers\u2019 problems. This is the main difference between how startups and traditional companies approach innovation.\r\n\r\nThe concept of innovation<\/a> encompasses three fundamental characteristics:\r\n
    \r\n \t
  1. For the consumer, innovation<\/a> must always result in something new. If you compare what existed before with the new creations, you should see a positive advance.<\/li>\r\n \t
  2. Innovation<\/a> doesn\u2019t always involve the incorporation of new technologies<\/a>. Value can be created for customers in various non-technical ways: designing a special customer experience, applying the low-cost concept to other consumer services, or introducing an unusual distribution model.<\/li>\r\n \t
  3. Innovation<\/a> must have commercial value; if it yields no benefits, it\u2019s just an idea.<\/li>\r\n<\/ol>\r\n
    Innovative ideas, by themselves, are not enough; they are just one element of the journey towards market domination. Startups have to apply innovation in an intelligent way that actually solves their customers\u2019 problems.<\/blockquote>\r\nThree exploration frameworks<\/strong>\r\n\r\nFor innovative<\/a> entrepreneurs<\/a>, the process of solving the customer\u2019s problems begins with observing people and keeping abreast of technological<\/a> changes. The next step is to ask whether there are any business opportunities that solve existing problems or address existing needs, taking into account that the proposal must be relevant and valuable to customers.\r\n\r\nBy combining this reflection with the three fundamental elements of innovation<\/a>, we can define three exploration frameworks that allow startups to generate ideas that are both innovative and aligned with the elusive taste of the customer.\r\n\r\n \r\n\r\nFramework 1: Change what doesn\u2019t work<\/span>\r\n\r\nIn this framework, the idea is to innovate<\/a> incrementally. Borrow an existing idea or well-known service, assess its problems, and figure out how to do it better. Many kinds of attributes can be improved; adding new functions to the product is not the only way forward. The most interesting approaches often have to do with reducing or eliminating inefficiencies related to time, cost, risk, or effort. To be clear, \u201cdoing better\u201d means more than just a simple product update.\r\n\r\n \r\n\r\nFramework 2: Make things easier for customers<\/span>\r\n\r\nBeing disruptive is clearly more difficult, since it involves disregarding known problems and preconceived notions in order to see things in a new light. This framework requires a certain degree of abstraction; rather than improving a defined product, you\u2019re finding a new way of doing something.\r\n\r\nThe art of making things easier is explained by the well-known design theory of simplicity. The idea is not to eliminate the superfluous functions of a product or service but to tap the innovative<\/a> entrepreneur<\/a>\u2019s in-depth knowledge of a particular subject in order to define the essence of the problem. It\u2019s about starting from scratch and using your imagination to describe how things should be.\r\n\r\nProducts or services designed with simplicity also have another advantage: people use them more often and they are usually quite beautiful. However, a simple design only seems obvious once someone comes up with it.\r\n\r\n \r\n\r\nFramework 3: Make things more affordable<\/span>\r\n\r\nThe idea here is to take something viewed by certain consumer segments as a luxury item, imagine its ideal use, determine how much it should cost, and transform it into an affordable mass-consumption good.\r\n\r\nThis framework overlaps somewhat with the low-cost concept\u2014here, too, the aim is to expand the consumer market\u2014but in this case the quality of the solution offered to the customer is not sacrificed. This framework should not be confused with occasional markdowns used as a marketing<\/a> tool.\r\n
    The three-framework methodology can give established companies the same internal benefits as those enjoyed by startups in terms of agile uncertainty management.<\/blockquote>\r\nCombating inertia<\/strong>\r\n\r\nWhat are the implications of this way of exploring innovative<\/a> business ideas? What parts of this startup-appropriate strategy<\/a> can be applied in mature organizations, and how?\r\n\r\nFor any company bringing an innovation<\/a> to market, one of the biggest frustrations is the discovery that potential users do not behave as expected. One lesson we can learn from startups is that we should begin by considering the customers\u2019 problems and let them guide the innovation process. Companies should not prescribe new products or innovative services without first understanding what\u2019s going on with their customers. What, exactly, is their problem?\r\n\r\nAt this very moment, a hundred startups are probably working on the same idea\u2014one that could transform the conception of new products or services in a particular market. It is quite difficult for any single company to compete with this degree of exploration and development of possibly revolutionary ideas. Given this innovation<\/a> bottleneck, it is essential for business executives to explore interesting new ways of planning and investing in resources for innovation and to consider new factors in these decisions.\r\n\r\nIn innovation<\/a> management, it is often said that no limits should be placed on the type, origin, or purpose of ideas. It may come as a surprise that the innovation journey requires the adoption of a framework to direct exploration towards the most innovative ideas. Reflecting on these three frameworks does not stifle innovation; in fact, it can help companies focus on analyzing and developing ideas that better resemble what the target customer ultimately wants.\r\n\r\nStartups operate in relatively unexplored territory. Compared with traditional companies, they are more willing to take risks on disruptive proposals. Nevertheless, the three-framework methodology can give established companies the same internal benefits as those enjoyed by startups in terms of agile uncertainty management. The key is to harness the essence of a startup.\r\n\r\n \r\n\r\n\u00a9 IE Insights."],"wpcf-article-extract-enable":["1"],"wpcf-article-extract":["By Marta Dom\u00ednguez<\/strong>. How can you find good, innovative ideas that lead to business opportunities? Three exploration frameworks\u2014changing what doesn\u2019t work, making things easier for customers, and making things more affordable\u2014can reduce the risk and uncertainty associated with new projects."],"wpcf-article-summary-enable":["1"],"wpcf-article-summary":["Startups seek to create disruptive innovation. Their aim is to apply innovative ideas in an intelligent way that solves their customers\u2019 problems. These ideas need not be tech-based, but they must entail a positive advance and have commercial value. Startups operate within three exploration frameworks: changing or adapting what doesn\u2019t work, simplifying designs to make things easier for customers, and making things more affordable without compromising quality. These exploration frameworks can also be applied in mature organizations. Every company can learn a lesson from startups: do not limit the types of ideas considered and focus your innovation efforts on solving customers\u2019 problems."]},"_links":{"self":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/articles\/633802","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/articles"}],"about":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/types\/articles"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/media\/636362"}],"wp:attachment":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/media?parent=633802"}],"wp:term":[{"taxonomy":"schools","embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/schools?post=633802"},{"taxonomy":"areas","embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/areas?post=633802"},{"taxonomy":"subjects","embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/subjects?post=633802"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}