While the media likes to tell the story of the “inspired” lone entrepreneur who had a great idea that magically changed the world or caused a huge new company to sprout from nothing this is the rare exception and you are often not hearing the full story. Real innovation takes work. You need to be open to opportunities, look for them in the right places, and exploit them when they arrive.
Sure, many people thought about the concept of an Internet search engine, or a social network, or a new type of can opener or mouse trap, but did they explore, test, refine, and develop the idea, or did they forget about it as soon as they left the shower?
In this post, I explore some of the many ways in which you can identify those innovative opportunities. In the future I’ll address exploiting them.
A great opportunity, especially for existing companies that have fielded products, is the unexpected success. Often companies focus on what is failing and put all of their energy into those problems, but they neglect what is succeeding better than expected. If a particular product or service is succeeding better than expected then it is important to explore what opportunity that might be revealing.
Just as you can have better human resource success by exploiting and expanding on the strengths of your employees rather than focusing on the weaknesses of each employee, similarly a company should explore product successes and exploit those further. There is more opportunity in turning a successful product into a breakout product than in turning a failing product into an okay product.
A misalignment is when the expectations and assumptions about the world or a market do not match up to the reality of that world or market. An example of this is the “bubble”. In this case, the assumption is a very high expectation mixed with a low reality resulting in over-valuation. The opportunity is to bet against the bubble.
In addition, any situation where you find that the conventional wisdom does not align with reality provides an opportunity. An example of this is where the major airlines assumed that a hub and spoke system could save money and provide flexibility until low cost airlines came in with direct routes and took away profitable segments of their business.
Cross pollination is moving a technology or a concept from one area into a completely different area, or mixing two disparate fields that have not been combined before. An example of this is Barack Obama’s success in using technology, social media, and big data analysis in politics for his successful 2008 presidential bid. GMO food is another example of two separate disciplines – genetics and food production – being combined.
Demographics and Social Change
An area which is often neglected by entrepreneurs is the area of demographics, which is unfortunate since this area leads to some very predictable opportunities. What opportunities do the Baby Boomers present? How about the Millennials? Predicting what these groups will need at each stage of their lives is not rocket science. And there are plenty of opportunities here to exploit.
Also keep in mind major social or technology adoption changes. Consider the impact of the growth of the Internet, or the adoption of mobile phone technology, or the growing field of the Internet of Things. Each of these social discontinuities provides opportunities and threats to a broad range of markets and industries. In particular, early on in the adoption cycle of these technologies the opportunity is greatest and, of course, the risk is highest.
Opportunity is all around you. Keep track of the ideas you come up with or those that you find in magazines or newspapers, or talking to clients, vendors, or friends. Once you have a list of innovation opportunities, you can evaluate which one is the best fit for you and your skill set, and that you are able to exploit. More next time on how to make use of your innovation ideas.