Driving Cost Effective Product Innovation with Strategic Thinking and Creativity

     Driving new product innovation while keeping costs low requires strategic thinking, tight customer alignment, and creativity. In this article, we will focus on effective methods (relevant to complex products and or solutions) that, individually or in concert with one or more alternative methods, can achieve deeper market penetration with current or new customers in both current and new markets while keeping cost clearly in focus and minimized.  This is especially critical for start-ups, emerging growth small businesses or other contract product development companies wanting to perfect their turnkey product solution capabilities. In aggregate, this dual approach has come to be known as Lean Startup Methodology with Minimum Viable Product (MVP) Testing.

     Lean Startup Methodology (LSM) with Minimum Viable Product (MVP) Testing

Simply put LSM with MVP Testing is a combination of 1) adopting the principles of lean startup methodology during product ideation to conceptually test new or likely product functional alignment with the targeted customers’ application need(s) and iterate new product ideas quickly and cost-effectively.  Some organizations further enhance this approach with the use or advantage of 3D printing technologies to augment pre-prototype product embodiments and  2) In a quick-follow fashion there is a simultaneous focus on developing a minimum viable product (MVP) milestone to gather feedback and validate assumptions ideally with customer insights incorporated before deciding on final product embodiments.

• LSM with Customer Co-Creation: Engaging your existing customers and potential customers in the ideation and innovation processes through co-creation initiatives. This approach taps into the collective intelligence, intimate process know-how, and creativity of your target customer(s) while keeping costs relatively low.  Formally, or better yet for smaller organizations informally, through application engineering and sales engineering resources, organize feedback sessions or co-design workshops with these select customers to gather insights on their needs, preferences, and pain points. Collaborate with them to co-create solutions which address specific market gaps or opportunities. This collaborative approach not only ensures the product will meet customer expectations but also enhances customer satisfaction and loyalty.

To reiterate Co-Creation aspects should be incorporated continuously in both the LSM and MVP stages with a fast-following effort in establishing the MVP at the appropriate time. 

• Simply put MVP incorporates an iterative effort centered on prototype testing.  MVP is the development of a 3D-printed model (if circumstances and resources allow) or a more fully functional prototype or MVP of your new product and conducting beta testing with a small group of target customers. Be sure to have effective processes and resources in place to quickly gather feedback on usability, early performance characteristics, and assess the strength of the value proposition to identify areas for improvement and quick pivoting for focused iteration. This iterative approach allows you to refine the product based on real user feedback, reducing the risk of investing in costly features or functionalities that may not resonate with the market and further draws customers toward your solution and your organization recognizing you as a viable solutions provider with an ear to the customer.  This is “customer intimacy” at its finest.

With effective attention to both LSM and MVP initiatives, the organization is ready to Pilot Launch and Secure Market Validation.  The launch of the MVP in a limited pilot market or segment can be effective to validate its market fit and potential for wider adoption. The organization must be prepared to take advantage of this one-and-only opportunity to monitor key performance characteristics of the product and most importantly assess the true value proposition based on direct and indirect outcomes realized.  As important as it is to assess the product performance one must be carefully observe the customer reactions to (and like or dislike of) the entire product experience.  This is critical to assess the product's success and potential need iterate further.

Finally, with the desired results stemming from LSM and MVP initiatives, fixing the final design can be executed. Based on design iterations and the timing of such being finalized, parallel efforts can be in place to create the necessary collateral including but not limited to product specifications and expected performance characteristics based on established operating conditions.  With all the pre-game formalities completed, execute the market launch beyond pilot customers and markets and drive subsequent scaling-up initiatives.

LSM and MVP are thoroughly inclusive of strategic thinking and creativity. Using this phased, two-pronged towards product innovation can result in a relatively cost-effective development effort and a quicker more flexible path to market launch.

This phased approach of using LSM and MVP with an underpinning of Co-Creation can minimize upfront investment while maximizing the chances of success in penetrating both current and new markets.

Chad Ruwe

3 April 2024

Reference: Ries, Eric. "The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses." Crown Publishing Group, 2011.