How Startups Build Innovative Products

Putting the “process” around the “creative process”

image by vectorjuice

What if I told you that building an innovative product can be broken down into a simple three-step process?

Look, I would never claim that I could boil down the source of innovation into a modest three-step plan. Innovation is the one part of starting up that is most definitely magic, because it’s the one part that’s fueled solely by creativity.

That innovation magic has a good side and a bad side. The good side is what keeps me an entrepreneur. The bad side is when the mystery behind the magic makes innovation-on-demand seem impossible. If we’re going to be honest with ourselves, entrepreneurs aren’t magicians.

Except maybe Musk. I can see a top hat and a cape on that guy.

The truth, however, is that innovation magic doesn’t just happen. Innovation comes about when you do something wrong for a long time and are compelled to start doing it better.

That’s a scenario you can put a process around. Here’s the creative process that I’ve used for over 20 years to build innovative products.

Stage 1: Exploration

All innovation begins with experimentation — good old-fashioned research & development. But that doesn’t mean scientists in lab coats. It means identifying a problem and exploring it.

That actually begins with data gathering — taking a step back from doing what you do and analyzing and measuring why you do it the way you do it.

Now, most entrepreneurs resist this. Not because they don’t want to do it, but because they don’t have the time, because of the death spiral.

Yeah, the death spiral. I’ve going to explain it with some math, so bear with me.

Let’s say it takes you X hours to generate Y revenue. As you become more successful, and because there are only so many hours in a day, you have to start hiring people to go from X hours of output to 10X hours of output in a single day.

But your revenue — Y in our equation — rarely increases at the same rate you increase X. The non-innovator keeps chasing the revenue and hiring more people. Eventually, productivity…