By: Chuck Frey
Scott Anthony, author of the new book, The Little Black Book of Innovation: How It Works. How To Do It, has developed a set of 5 questions that he uses to gauge the commercial viability of any new idea.
1. Is there an important problem that customers can’t address because existing solutions are expensive or inconvenient? Is there a high-potential job to be done?
2. Is there a disruptive way to solve the problem in a simpler, more convenient or more affordable way?
3. Is there a plausible hypothesis about an economically attractive, scalable business model? Answering this question doesn’t require a detailed financial model, but it does require a sensible story that’s at least conceivable – an a plan to turn that hypothesis into reality.
4. Does the team have the right stuff to course-correct according to in-market learning? Remember, the odds are high that the first idea isn’t quite right. A team that is dogmatic and keeps trying to prove it is right is the wrong team for many innovation efforts.
5. Can early profitability be a choice? Ultimate success requires a profitable model. The sooner there is a line of sight to profits, the better.
Anthony adds that looking at patterns is often a way to get an accurate read on the potential value of an idea:
“If you are trying to figure out if your idea, approach or plan has merit, go back and look at history. Look at what you or other people tried. What worked or what didn’t? …ask the question, ‘What does history teach us?'”
While looking to the past may sound antithetical to innovation, it does have some merit. You already know from past experience what types of ideas are likely to be accepted in your organization, and those which tend to go down in flames because certain leaders and managers simply reject them outright. You can learn from past idea-selling efforts, and tailor your presentation for your new idea accordingly.