There are three types of innovations:
1) Sustaining innovation – meaning it is an innovation that improves the “performance” of an existing product/technology or service e.g. the innovation of two then three then four etc. blades in razors were a sustaining innovation that improved performance of a standard razor
2) Low-End Innovation – this is where the innovation targets those customers who are being “over serviced” for their needs, often at a higher cost than they would like. In many cases, the new innovation is “good enough” for low end users and therefore satisfies their needs at a much lower cost e.g. smartphones – when smart phones first arrived, they were a lower performing technology than PC’s and laptops, however they were “good enough” for people who wanted mobility, accessibility and simplicity of use i.e. they didn’t need all the technologies that a PC or a laptop offered (today they are gaining power and moving upstream into new markets; a discussion for another day)
3) New Market Innovation – where the innovation creates new users who were “non-consumers” before the innovation was available e.g. Xero accounting package started off by servicing non-users of accounting packages. These were micro and small businesses who found the complexities of existing packages too difficult for their skills (i.e. they would need a bookkeeper) and therefore Xero offered them simple invoicing and basic functionalities.
No matter whether your innovation is sustaining or disruptive, how you take it to market can have a life and death implication on the result. As an example, we know statistically that a “better performing” product going head to head with an established incumbent (existing business), has less than a 14% chance of success. However, with the right strategies employed, success rates can increase to over 66% (Source: Growth Science).
If you would like to know more about the strategies that affect your innovation’s success, simply ask us here.
