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Some of the most common—and stupidest—advice I see in innovation is that you must embrace risk. That’s like saying, “Oh, you’re scared of risk? Well, just stop it.”
It’s not that easy, and you should be scared of risk. Risk is not your friend, to be welcomed with open arms. It’s more like an unpleasant mother-in-law. Yes, you need to tolerate some of it, but you don’t need to invite it to come live with you.
From a blank page to a real product on a real shelf, what do you think the odds of success are? Online, you’ll find the same stat regurgitated again and again: 80 percent or more of new products fail. The good news is that this is complete garbage. As George Castellion and Stephen Markham laid out in the Journal of Product Innovation Management, the 80 percent figure is a myth. The empirical studies going back to 1977 put the real failure rate at 40 percent or less. With a disciplined process, you can push it down to 30 percent or less.
The secret? Knowing**.** Every step of the innovation process should be about knowing one more thing than you knew before, because knowledge is what kills risk.
The eight questions below function as knowledge gates. They’re sort of like stage gates, but better, because stage gates are just corporate theater where you check a box and move on. Knowledge gates are real, critical questions you have to answer before you decide to invest more time and money.
#1 — Problem Seeking: Do you have a problem worth solving?#
Everything starts with the problem. If you pick the wrong one, nothing else matters. You can build the most beautiful solution in human history, and if it solves a problem nobody has, it’s nothing more than a fancy paperweight.
People love to rush toward solutions. We like to do things, not just think about things. Resist the urge. Dedicate time to the problem. Hunt for the real pain—the thing that, if you fixed it, would actually make somebody’s life better. That’s the only kind of problem worth your money and time.
#2 — Problem Seeking 2.0: How are you going to sell your solution?#
Finding a great problem is only half the job. The other half is selling the fix. If you’re going to pour money into developing something, you’d better have a way to get that money back. Figuring out how to sell the thing after you’ve built it is how you end up with a garage full of inventory.
So do the homework early. Talk to real potential customers. Does the problem actually bother them? Enough for them to pay for a solution? And where would they even go to buy such a solution?
Which brings up the part everyone forgets: distribution. I constantly meet inventors who think they’ll build something great, ring up Walmart headquarters, and get it placed on the shelves. It doesn’t work like that. If you can’t describe how the product physically gets into a customer’s hands, you don’t have a business yet.
#3 — Support System: Do you have a partner?#
We love to glamorize the lone genius, but it’s largely a myth. Some of the greatest inventions came not from individuals, but duos. The Lumière brothers gave us movies. The Wright brothers gave us flight. Wozniak and Jobs gave us the Apple computer.
Innovation is a brutal business, so you need at least one partner—somebody you’d hand your soul to, who can carry the load when you can’t. Because you will hit the floor at some point, and if there’s nobody there to pick you up, you’ll quit. I know I wouldn’t still be here without Donna, the love of my life and my “boss” who has kept me from going off the rails more times than I can count.
#4 — Solution: Which idea is most promising?#
When you first brainstorm potential solutions, forget risk entirely. Throw everything at the wall—full ideas, half ideas, dumb ideas, fragments.
Then write concept sheets that spell out how each idea might actually work. This is a great moment to dig through patent archives—not to fret about infringement yet, but to learn from everyone who took a swing before you and to knock your thinking loose.
Then you funnel the ideas down to your top three, and here’s where risk mitigation finally enters. You build a multidimensional matrix and rank the survivors across the things that matter: Is the solution feasible? How hard is it? What’s the payoff? Do you have the right team to make it a reality?
#5 — Scientific Feasibility: Is it even possible?#
We once had a client who wanted a door that generated electricity when it was manually pushed. The energy would then be stored in a battery, to be used to open the door automatically when the handicap-accessible button was pressed. We built it, and it worked. Every seven manual pushes generated enough energy for one automatic open.
We expected the client to be thrilled, but they were disappointed. Turns out they expected it to be one-for-one. One push, one open. That would be great, but it’s simply not scientifically possible, because of friction and energy loss.
Before you spend a dime on a physical prototype, prove it on paper with a mathematical model. Don’t go chasing anti-gravity, perpetual motion, or one-for-one doors. Only pursue the things you know can actually work.
#6 — Protection: Can you patent any of it?#
Say you nail it. You grind through development and ship a genuinely great product. Wonderful. Now what stops another company from copying it wholesale and pocketing every dollar without doing any of the work?
Nothing. Unless you can patent some piece of your solution. If there’s no patent, you’re just doing R&D for your competitors.
#7 — Market Validation: How will customers actually respond?#
Back in #2 you did light market research to see if there was potential. Now it’s time to validate, with focus groups, surveys, real customers, and four blunt questions:
- Does the product solve the problem?
- Does it beat the alternatives?
- How much will people actually pay for it?
- What are the required features that get them to buy it?
The answers tell you whether to keep spending or walk away. Either one is a win, because now you know.
#8 — Logistical Feasibility: Can you actually pull it off?#
Some things work in theory and fall apart in the real world—too expensive, too impractical to build. So look hard at the whole path, from prototype to a customer’s doorstep. Pay attention to three things in particular:
- Cost: How much will it cost to develop and produce the solution? Is the projected ROI worth it?
- Regulations: Are there regulatory hurdles? What will it take to overcome them?
- Manufacturing: Where will you get the materials to produce the solution? Do you have the manufacturing capability to actually produce the product, at volume?
It’s tempting to shove these questions off until reality forces them on you. By then it’s usually too late and too expensive. Ask them now.
Knowing Beats Hoping#
Innovation is risky. You’re never going to zero that out completely. But at every knowledge gate you learn enough to answer the most important question: Do we keep going, or not?
This is what embracing risk actually means. It’s not about closing your eyes to potential dangers and plowing forward anyway, hoping for the best. That’s just stupidity. Instead, go in with your eyes open. Face the risk head-on with a step-by-step approach, replacing uncertainty with knowledge.
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