"Technology for Innovation, and Innovation with Customer"

1. TECHNOLOGY AND
INNOVATION
MANAGEMENT
25.FEB.2019
DR. BURAK KUZUCU
Week-4:
Technology for Innovation, and Innovation with
Customer

2. Opportunity:
identification
To identify problem-driven opportunities with
“Pain-storming”:
1. identify a particular customer or type of person
2. describe something that the customer does, and
what the customer is trying to accomplish
3. identify the various pain points and emotions that
accompany this activity
4. select the biggest pain point and the root cause of
the customer’s problem
5. identify the assumptions behind this root cause.
Starting without constraints such as price and
physical limits opens up many possibilities!
Different opportunities
typically leverage different
combinations of technologies,
applications, and customers.
Effective Cancer Treatment Bio-technology

3. Opportunity:
evaluation
Characteristics of an attractive opportunity:
1. Timely — a current need or problem
2. Solvable — a problem that can be solved in
the near future with accessible resource
3. Important — the customer deems the
problem or need important
4. Profitable — the customer will pay for the
solution and allow the enterprise to profit
5. Context — a favorable regulatory and
industry situation
always consider «opportunity cost»
CommitmentReturnResourcesNoveltyCapabilities
five-step process of evaluating an opportunity
generic framework for evaluating an opportunity

4. Market Engagement
• ETC Process to get market feedback:
1. express an idea,
2. test it, and then
3. cycle or refine it based on learning.
• An extension of this process is called customer development, which is one of the three core components of
the popular lean startup method in entrepreneurship – by Steve Blank.
Agree or Not:
Focus groups, surveys, and customer interviews all face a
challenge in that they have a limited ability to identify new
problems and solutions?

5. Design Thinking
a design methodology that provides a solution-based approach to solving problems

6. Minimum Viable Product
• customer development process and the product development process proceed in parallel.
• «gather data from the market» and «work to create and refine product mockups and prototypes»
• MVP:
• do not wait until the product is «perfect!»
• observe how potential customers or users interact with the product and to gain insight
• «is a concise summary of the smallest possible group of features that will work as a stand-alone product
while still solving at least the “core” problem and demonstrating the product’s value» [Steve Blank]
• some examples:
• «build precision agriculture drones»  «use a helicopter with a high-definition camera»
• www.youtube.com/watch?v=xPJoq_QVsY4

7. Open Innovation
The use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the
markets for external use of innovation (Chesbrough)

8. Spotlight on Airbnb
Airbnb was founded by Brian Chesky and Joe Gebbia in 2007, with cofounder Nathan Blecharczyk joining in 2008. At first, Airbnb was called AirBed &
Breakfast, with Chesky and Gebbia renting out a room in their own apartment to attendees of the Industrial Design conference. After limited traction,
Airbnb joined the startup incubator Y Combinator in 2009, and the company’s future turned around. In 2010, Airbnb closed a $7.2 million first round of
financing from institutional investors. By 2016, Chesky and Gebbia were raising $850 million at a $30 billion valuation. Together they built a highly valued
“unicorn,” which is a term used to describe a privately owned company with a valuation over $1 billion.
Airbnb’s rise to prominence emphasizes the increasing trend of the sharing economy, which takes underutilized items and rents them out to consumers
for a fee. The sharing economy has reshaped how value is generated. With an increase in the amount of data available about users, companies like
Airbnb Page 47capitalized on this trend. At the same time, Airbnb had an aggressive growth strategy that focused on getting big as quickly as possible,
growing before the legality of the business could even be understood. Now Airbnb is large enough to handle the legal complications that often come with
scaling.
In addition to capitalizing on a new opportunity driven by technological advancement, the founders of Airbnb focused on understanding and helping their
customers. While reviewing New York listings, the founders realized people were not booking rentals due to low-quality pictures. Paul Graham, one of the
Y Combinator founders, suggested the nonscalable, nontechnical solution of traveling to New York and taking high-resolution pictures for customers. This
doubled Airbnb’s weekly revenue to $400 at the time, establishing understanding the customer as a key Airbnb value.

9. Case-Study: What is Your Best Innovation Bet?
(Melissa Schilling - HBR)
Challenge: Successful technology innovation requires firms to make good predictions about product and service capabilities
that consumers will value in the future. Getting this wrong can be costly.
Solution: By studying how a technology evolved along key dimensions, and understanding the degree to which consumers’
needs have been satisfied on those dimensions, it’s possible to determine where best to invest in technology development.
1. Identify Key Dimensions 2. Locate Your Position 3. Determine Your Focus