The innovation equation: balancing invention and value release
A serial inventor with an engineering background, Myles Murray highlights an important lesson for innovators in ensuring a balance between the ‘what?’ of a solution and the ‘why?, or value release.
Let me start by suggesting that a ‘solution’ which is independent to a ‘need’ does not necessarily create ‘value’. And without creating value, there is no way to commercialise a product or service.
Let’s consider this equation in discussing what it really takes to drive adoption of a solution, thus creating a successful business…
Innovation = invention + commercialisation
Creating a valuable solution to a need = invention + commercialisation
There are countless inventions that have solved perceived needs, yet have failed to be commercialised. Some might argue that the need was not ‘big enough’ or ‘painful enough’ to drive adoption. This is simply another way of saying that not enough value was released by the solution.
How many times have you heard people say, ‘if someone created a solution for that, it would be an amazing business’? There are countless needs in life, yet for the most part we come to accept and deal with things as they are. In my opinion, solutions or inventions are nothing more than a means to an end. True innovation only emerges when an invention or solution addresses a need, with the right value proportion. This is indicative of the commercialisation element of our innovation equation.
What is value?
The perception of ‘value’ is often confused by how an innovation originates: whether it’s a need driving the invention, or an invention looking for a need. This ultimately focusses on the solution as the valuable element. Look at any website from an early stage or start-up company: it is product-focused. Now look at a mature company’s website: you really have to look for the actual product because the invention has been replaced by the real value offered.Our innovation equation needs both invention and commercialisation to balance. One without the other is not true innovation. Commercialisation is the releasing of value for the buyer. The solution, or invention, is the means to an end which enables this value release. Whether value is quantified as time, money, safety, or peace of mind, it is the value that drives the adoption.
So, let’s modify our innovation equation:
Creating a valuable solution to a need = invention + releasing of value for the buyer
How does a value proposition lead to changes in behaviour?
Let’s backtrack for a moment. Things were ‘fine’ as they were before the solution was presented. And although potential buyers can see the validity of the solution… so what?
Remember what the currency is here: time, money, safety or peace of mind. To demonstrate how much better your solution is compared to the status quo, you must create motivation. This is essentially what the value proposition is. It is the answer to the response: “that’s nice, but so what, and why should I change?”
Answering this is the difference between a successful and a failed business.This is excellently explained by Simon Sinek, who articulated the why, how and what of marketing disruptive innovations. If the ‘why’ is value proposition, commercialisation is the ‘how’ and the invention is the ‘what’, you have achieved product-market fit. And because the ‘why’ matches with our buyers’ motivations, that’s innovation.
“People don’t buy what you do, they buy why you do it” – Simon Sinek
“When the why matches the buyers’ motivation, now we’re innovating!” – Myles Murray