How Do You Make Truly Innovative Products? Know Yourself First
Can you create the next once-in-a-generation product just by improving upon what your competitors do? Probably not. Breakthrough products are rarely developed through imitation.
Innovation is the more reliable method if you’re looking to create solutions that are truly different. And, if innovation is the goal, you should rethink kicking off your product development process with an analysis of your competition.
A competitive analysis only helps you discover where your peers excel. It tells you nothing about your own strengths. And doing this too early can hamper, rather than help, your efforts. It sets your focus too narrowly and leads you toward solutions too similar to ones that already exist.
You need to first focus on creating something new, something unique, something that will change the existing paradigm. And this road to innovation doesn’t start with your competitors. It starts with you.
To get the ball rolling, it helps to adopt “blue ocean” thinking.
Red Ocean, Blue Ocean
In their seminal work Blue Ocean Strategy, authors Chan Kim and Renee Mauborgne introduced the idea of two divergent market environments. They called them red ocean and blue ocean.
The red ocean is the known market. In this environment, industry boundaries are well defined, competition is fierce, and big profits are hard to come by. Success is contingent on knowing your peers well and beating the competition either on price or functionality.
The blue ocean, on the other hand, is an undefined, open space — a market that has yet to be created. Whoever gets here first has the advantage, because in this space there is little to no competition. Blue ocean strategies aim to create new demand, new opportunities, new ways to solve customer problems. These strategies also come with the potential benefits of uncapped profits.
The ideal environment is pretty clear.
To find the optimal blue ocean, though, you first have to know your strengths and understand how they help you solve your customers’ problems. Then you need to uncover a previously unmet customer need and apply your organizational strengths to creating a novel solution. Finally, and only after this concept is well defined, you take a look around and see who else might be attacking the same problem and how.
Self-Analysis Before Competitive Analysis
Many solid product ideas come from scouting what your peers do well, or perhaps what they’re not doing at all. And roaming the same familiar waters can be a safe strategy. In your perpetual quest to create the next best digital solution, it’s only natural to want to take a look around at the competitive landscape and see what’s what.
On the other hand, trying to replicate your competitors’ success is a hard way to carve out a living. Not everyone can win by identifying and filling holes in the competition’s plans. Plus, this strategy tends to make for a crowded marketplace — everyone jostling around the same patch of water, bumping into each other with the same basic product.
If you stop to think about it, you might question the wisdom of tying your boat to someone else’s bow. Why base your product strategy around what someone else may do well? Especially when you’re trying to create a brand new solution to a new problem.
Developing a new product should start with an understanding of what your company does best. What is it that you deliver to your customers, specifically? Why is it that they come to you for this solution? The thinking here has to be conceptual and reach beyond the obvious answer. You need to define your core business, identify what you do well, and then look for opportunities to evolve.
For example, let’s say you’re a manufacturer of expensive home exercise bikes. You might define your core business as facilitating a premium fitness experience for your customers. Continuing with the self-analysis exercise, you may identify the production of high-tech, next-generation stationary bikes as one of your strengths.
Now comes the hard part. How do you take the next step and make that innovation leap?
Talk to Your Customers, Find Pain Points
Perhaps your fitness equipment manufacturer company takes the evolutionary plunge and becomes a fitness experience provider. Now you go from “we make high-tech stationary bikes” to “we provide a spin class studio experience in your home.”
But how do you come up with that evolutionary idea? You talk to your existing customers and see what needs may be going unmet.
In doing so, you might discover that they actually really like going to their spin class. But it’s hard to make it to the studio multiple times a week with the traffic and the school pick-ups. And you never really know who’s been sitting on those banana seats, anyway, right? So, maybe it makes sense to get a stationary bike for all the times they can’t make class. And, hey, wouldn’t it be cool if you could get that same in-studio feel at home?
There it is. There’s your pain point. There’s your unmet need. There’s your opportunity for innovation.
Talking to your customers is a great way to find out not only what they want and need, but also where you fit in their world. In-depth understanding of your relationships with your customers can be incredibly helpful in revealing the role you play for them. And the roles you could play.
Combining your strengths — we make premium at-home exercise equipment — and your customer needs — spin class experience at home — is an excellent recipe for driving innovation.
Open New Territory, Find Unexpected Competitors
What does that innovation look like?
If you’re a company like Peloton, innovation might lead you to consider replicating many elements of the spin studio experience in your next generation of premium exercise equipment — including athletic, energetic, microphoned instructors to lead your sessions and cheer you on through a subscription-based service.
Innovation culminates in an entirely new approach to servicing existing customers. But, more importantly, that approach also creates an entirely new customer base, opening up new markets and revenue streams.
The evolution in your product offerings also creates a whole new set of unexpected competitors. You can now add spin studios to your list of peers in addition to other exercise equipment manufacturers — and, after that, any brick-and-mortar fitness establishment. That new set of competitors should yield even more insights and ideas to help you further refine and grow your product concept.
If you’re finding new peers in unexpected places during your product development process, you know you’re on the right track for innovation and differentiation.
And that’s exactly why you want to avoid doing a competitive analysis before you concept your next-generation product idea. Doing so excludes all those unexpected competitors from helping to shape, improve, and iterate your new product.
Understanding Your Core Strength Drives Effective Product Innovation
Knowing the competition is certainly helpful. But a successful product strategy aims to understand your own strengths first. It’s the insights you and your product team have into your customers and products that are the real drivers of innovation. Nobody knows your products better than you. Making products that stand out may just hinge on leveraging your strengths in new and unexpected ways.