The document discusses four approaches to innovation: Outcome-driven innovation focuses on the jobs customers need done rather than what they say they want. Customer development involves validating ideas with customers in parallel to product development. Crossing the chasm describes how to target early adopters versus the mainstream market. Working with lead users allows innovators to understand problems and potential solutions by collaborating with those facing important problems.

1. MAKING INNOVATIONS HAPPEN
AGSM MBA CLASS
Melbourne, 20th October 2010
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2. So you’ve
got an
idea...
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3. FOUR INNOVATIONS ... FOR INNOVATION
Anthony Ulwick - Steven Blank - Geoffrey Moore - Eric von Hippel -
Outcome-Driven Customer Crossing The Lead users
Innovation (2000s) Development (2000s) Chasm (1990s) (1990-2000s)
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4. WORKING THE ADOPTION CURVE
Underlying question: what jobs do
people want to get done?
Innovators give us clues to what will happen in the market which follows
Choosing to work with lead users allows us to mine them for insights and ideas
Later on, working with beach heads allows us to
create case studies that convince the
Customers
mainstream our product is
appropriate for them
Chasm
Lead users
Beach heads
Time
Innovators Early Adopters Early Majority Late Majority Laggards
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5. OUTCOME-DRIVEN INNOVATION
ANTHONY ULWICK
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6. OUTCOME-DRIVEN INNOVATION
Don’t ask customers what they want...
...most can’t tell you
Customers often use their existing experiences as a frame of
reference; they frequently ask for the impossible and they don’t
know what is possible
Instead, consider that customers have jobs or tasks which they
want help to perform “If I had asked my customers
what they wanted, they would
have said a faster horse.” –
Henry Ford
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7. CUSTOMER DEVELOPMENT
STEVEN BLANK
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8. CUSTOMER DEVELOPMENT PROCESS
The customer development process happens in parallel to the product development one
The “four steps to epiphany” are
1. Customer Discovery - understanding
customer problems and needs
2. Customer Validation - developing a
sales model that can be replicated
3. Customer Creation - creating and
driving end user demand
4. Company building - transitioning the
organisation into a well-oiled machine
8 Steven Blank The Four Steps to the Epiphany
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9. TWO PARALLEL STREAMS
Product Development Customer Development
– The focus of this stream is the economic customer
– Product development should remain focused on the – Aim to understand
feature set and on usability by the core user groups ★ Existing issues and challenges
★ Barriers and incentives to product uptake
– Feature list to remain driven by the vision / ★ Affordability and likely usage patterns
experience of founders except where customer
– Customer development will work from current
feedback indicates revisions to be considered
product concept provided by product development
– Where identified, constructive product-related
feedback will be provided to product development
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10. CROSSING THE CHASM
GEOFFREY MOORE
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11. TARGET MARKET CHARACTERISTICS
INNOVATORS / EARLY ADOPTERS EARLY MAJORITY
•Seek out new products •Cautious about new ideas – “they might be
•High level of comfort with risk fads”
•Expects discontinuous behaviour change •Want to see others like them using
between old & new products first
•Circa 16% of the market •Seeks evolution not revolution
•Do not use early adopters as a reference
group
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12. LEAD USERS
ERIC VON HIPPEL
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13. LEAD USERS
Like chasm-crossing, this involves working very
closely with customers...
... but amongst innovators rather than the
mainstream
•Tap into issues early
•Understand how innovators are already trying
to solve the problems you aim to address
•Learn from people who know they have a
problem how those coming later will act
13 Churchill, Von Hippel, Sonnack, Lead User Project Handbook
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14. LEAD USER RESEARCH
1. HYPOTHESISE
KEY TRENDS
WHAT IS CHANGING IN
OUR MARKET THAT WE
CAN TAP INTO?
IDENTIFY LEAD USERS IN
OUR SECTOR AND
ANALOGOUS ONES
14 Based on Churchill, Von Hippel, Sonnack, Lead User Project Handbook
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15. LEAD USER RESEARCH
1. HYPOTHESISE 2. RESEARCH
KEY TRENDS ISSUES & TRENDS
WHAT IS CHANGING IN INTERVIEW LEAD USERS -
OUR MARKET THAT WE PAINS, PROBLEMS,
CAN TAP INTO? PARTIAL SOLUTIONS
IDENTIFY LEAD USERS IN
OUR SECTOR AND
ANALOGOUS ONES
14 Based on Churchill, Von Hippel, Sonnack, Lead User Project Handbook
Wednesday, 20 October 2010

16. LEAD USER RESEARCH
1. HYPOTHESISE 2. RESEARCH 3. CO-CREATION
KEY TRENDS ISSUES & TRENDS SESSIONS
WHAT IS CHANGING IN INTERVIEW LEAD USERS - CO-CREATION SESSIONS -
OUR MARKET THAT WE PAINS, PROBLEMS, SEE HOW LEAD USERS
CAN TAP INTO? PARTIAL SOLUTIONS PROPOSE FIXING THINGS
IDENTIFY LEAD USERS IN
OUR SECTOR AND
ANALOGOUS ONES
14 Based on Churchill, Von Hippel, Sonnack, Lead User Project Handbook
Wednesday, 20 October 2010

17. LEAD USER RESEARCH
1. HYPOTHESISE 2. RESEARCH 3. CO-CREATION 4. CONCEPT
KEY TRENDS ISSUES & TRENDS SESSIONS TESTING
WHAT IS CHANGING IN INTERVIEW LEAD USERS - CO-CREATION SESSIONS - TEST PROPOSITION
OUR MARKET THAT WE PAINS, PROBLEMS, SEE HOW LEAD USERS BEYOND LEAD USER
CAN TAP INTO? PARTIAL SOLUTIONS PROPOSE FIXING THINGS GROUPS
IDENTIFY LEAD USERS IN
OUR SECTOR AND
ANALOGOUS ONES
14 Based on Churchill, Von Hippel, Sonnack, Lead User Project Handbook
Wednesday, 20 October 2010

18. So you’ve
got an
idea...
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19. WWW.EFM.COM.AU
Chris Grannell
chris.grannell@efm.com.au
03 9561 3460
This document © Ellis Foster McVeigh 2010
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