Whether you are a start-up or a scale-up you need to innovate or face potential business suicide. Innovating for the sake of innovating, however, is also a comfort zone for many entrepreneurs. Especially for our engineers, software developers, scientists, and other “inventors”, the joy and passion of innovation prevents them from building a viable business.
The question then is, how can we bring in some process to figure out whether we are innovating for the sake of it, or if we are building a business? A product development process should be implemented and followed to its logical conclusion.
To ensure continued business growth, both markets and competitor trends should be monitored. Scanning the market for demand and the competitor landscape should be done continually and this should inform the requirements to innovate. This is a basic requirement, regardless of country, industry, or life stage of the business, and should lead to a formal innovation process adopted in the business. Innovation should be encouraged across the entire organization and can extend beyond just product innovation. For example, new customer service processes can lead to rapid increases in new customers.
Then, we need to ask some strategic questions before jumping into writing some code or engineering a new tool for agriculture.
Regardless of the type of business you are in currently, for example B2C, B2G or B2B, it is almost always better to develop B2B clients. These acronyms mean Business to Customer, Business to Business, and Business to Government. Therefore, figure out how to align your innovation as a B2B strategy. This will mean figuring out who is your customer and who is your end-user. Tip: the one who pays you is your customer!
One of the biggest factors in determining the value of your company is the extent to which you can see where your sales will come from in the future. If you´re in a business that must start from scratch each month, the value of your company will be lower than if you can pinpoint the source of your future revenue. A recurring revenue stream acts like a powerful pair of binoculars for you to see months or years into the future so, creating an annuity stream is the best way to increase the value of your business. This is about mitigating risk for a potential investor and will add enormous value to your business sometime in the future when you may consider equity funding.
Another key issue to consider is the impact we are having on society. If we can impact society positively, we can use this as a very powerful marketing tool when we take the new product to market. If we are negatively impacting society, well, just do not proceed any further. There is simply far too much attention on businesses that negatively impact the environment to take the chance to profit at the expense of the environment.
Before we start innovating, think about it carefully and strategically first.