The Product Innovation Trap
How to Avoid it & Build Products Customers Love
In this article, I’m going to de-construct:
What innovation is really about
The dangerous Innovation Trap product teams fall into when building products
3 specific tactics for building something truly innovative
So… What Does “Innovation” Really Mean?!
When you think of the term “innovation”, you likely think of something being “new”.
And you’d be right.
The term comes from the latin innovare, to “introduce something new”. The recent introduction of ChatGPT to the market would be a good example of “something new”.
When we think of the term, we likely think of famous innovators, such as Edison or Steve Jobs. Or we think of innovative products such as ChatGPT or the first iPhone.
How one person thinks of the idea of “something new” can differ dramatically.
For example, Instagram might be “new” to a 13-year old whose just got their first smartphone, but the concept of social media & image sharing is now pretty normal for the rest of us.
Why is this relevant to you as an aspiring product leader, you are probably asking?
Because understanding what “new” really means - what being truly innovative really means - has led to the downfall of many product teams & of many organisations.
The Dangerous Trap of “Innovation” for Product Teams
So, why can misunderstanding “innovation” be so dangerous? Three key reasons:
1/3 Product teams conflate a product being new for them with being new for everybody else
You may have spent years working on a solution & think it the most amazing, innovative thing in the world.
The problem is that the market usually doesn’t share that view.
Say you decide to launch a new communication tool, like Slack, this year. Technically, you would be launching something “new” by the fact you would have created something that did not exist before without your labour. Your team may therefore label the work as “innovative” as a result.
However, we judge products based on two success metrics:
Is the product valued by the target customer? Is that target customer willing to pay enough money for the product to make the business profitable (or at least contribute towards profitability)?
The market might rightly say, “Well, this is just a worse version of Slack, so I’m not going to bother using it.”
In that sense, the product would fail to be innovative in the sense that it did not provide something new in a practical sense; the team failed to create something both unique AND valuable for the customer (the biggest contributing factor to product success, as we outline in this article).
The team might think this is innovation, but it is, instead, innovation theatre…
Thanks for reading Prod MBA! Subscribe for free to receive new posts and support my work.
2/3 Misunderstanding Innovation Leads to Inaction
At the other end of the spectrum, some teams become intimidated by the very word “innovation”.
Many teams (wrongly) assume that building something innovative requires them to come up with some sort of amazing new technology (e.g. ChatGPT or the first Tesla car). They take the idea of “new” to the extreme, thinking they must reinvent the wheel.
The outcome? Teams become frozen by inaction, not sure where to even start when trying to come up with ideas for new products - or even ideas to improve existing products.
3/3 Misunderstanding Innovation Disguises What Really Matters
Either by being blinded by “innovation theatre”, or because teams think innovation must require us to reinvent the wheel, teams often blind themselves to what really matters.
What does matter? Coming up with a unique & valuable way to solve a specific problem.
In most cases, that doesn’t require you to build the next Google or Tesla. It simply requires us to look objectively at the market & assess what we could do differently in order to deliver a lot of value to our target customer.
Being able to clearly find what we call “Blue Ocean” - i.e. a space in the market where there is no/little competition - is impossible to do when we are blinded by our own ego, or trying to be too clever about how we innovate.
These three factors constitute an Innovation Trap because they prevent us from even conceiving of a great product to deliver to the market.
Whether you are working on an existing product or planning a new product to take to market, in the next section we’ll explore the 3 types of effective innovation - & how you can apply them to build great products in the real world.
3 Tactical Approaches to Innovation & How to Apply Them
In the previous section, I outlined why it’s dangerous to think of innovation as a complete “reinventing of the wheel”. However, our first approach to innovation does just that:
1/3 Classic Innovation
By classic innovation, we mean that the product we are working on will deliver a significant shift in the market, usually by leveraging new technology.
To illustrate this with some well-known examples, we could say the following represent classic innovation:
Tesla developing the lithium battery to be able to power electric cars enough to make those cars practical & desirable
OpenAI developing ChatGPT to potentially revolutionise the role of artificial intelligence in everything from copywriting to writing code
Facebook pioneering the network effects of communities within a digital product
2/3 Innovation by Questioning Convention
We can build products that customers love by questioning convention, usually in subtle ways.
We now live in a world that is 10x more competitive than it was even back in 2008. This means that there are many more products in each category, with many more users online, with many, varied interests.
This requires teams looking to be successful to question existing conventions & try to approach solving a problem in a unique way. However, rather than trying to reinvent the wheel with new technology, this can be as simple as questioning convention.
How? By returning to “first principles” i.e. asking yourself why things are the way they are.
Examples of companies that question convention effectively:
Superhuman: They realised that almost everyone used Gmail to do their emails. However, they realised that busy people were still spending hours per day on email! It had become a chore! They therefore decided to provide the “fastest email experience ever made” to deliver what people really wanted: Not more, better emails, but more of their time back
Prod MBA: When we started out, we looked at the product training market & realised it didn’t make sense for Product Managers to watch overly-theoretical videos & read books to improve at product. We therefore focused on providing hands-on, actionable product training the only way we thought possible: By getting students to build a real product on our bootcamp
Amie: Amie realised most professionals struggled to manage their time. They planned their day on a to-do list, but realised nothing on that list actually got done, because actually enacted their day using their shared calendar. The solution? Add your to-do list on to your calendar so you actually get them done!
3/3 Innovation By Doubling Down On ONE Thing
Rather than reinventing the wheel, or patting yourself on the back for thinking differently & successfully questioning convention, sometimes innovation is really very simple:
Just do one thing much better.
That could be something you already do, such as delivering value “faster”, or something that you aren’t already doing, such as “quality, human customer support”.
Particularly where you are working on a product in a competitive market, it is absolutely essential to find one area of value to differentiate your product.
A great example of this was Zappos:
Zappos sold shoes online. One of many doing this at the time. Yet 10 years later?
Zappos was bought by Amazon for $1.2 billion.
How? They focused on doing one thing way better than any of their competitors:
They didn't just want to help their customers when, for example, the customer opened their customer support chat. They wanted to wow each & every customer, going so far as to put every single new employee - whatever the role - through a 4-week training programme, in order to provide the best customer support possible.
Zappos was hugely successful because they didn't focus on providing the most shoe varieties, or exclusive models, or the lowest prices. They focused on doing one single, unglamorous thing much better than everybody else: the customer experience.
Is One Type of Innovation Better Than Another?
As with everything in product, “it depends”!
When we pursue classic innovation leveraging new technology, there is an advantage.
It is far easier to build what we call a “defensive moat” in such a case i.e. we have a competitive advantage with our new technology that is going to be hard for a competitor to copy.
However, on the other hand, most companies do eventually catch up. They might build the same kind of technology (think how Meta copied Snapchat’s technology & interface to take market share) or they might skip ahead with even better technology (potentially what ChatGPT & Bing might do to Google Search over the coming year or two).
When it comes to questioning convention (Approach #2) or doing one thing better than everyone else (Approach #3), in theory it is not difficult for a competitor to copy - or even do the same thing better.
The question is: Are they able to do this in practice?
The example of Tesla will help illustrate this point clearly:
Tesla has built innovative technology (e.g. lithium batteries) & packaged that into an innovative product (i.e. digital, electric cars). Yet they have very willingly open-sourced all of their technology. Why? Because Tesla know that it is extremely hard to not just deliver on their value proposition (quality electric cars), but to continue to deliver on their value proposition i.e. to be successful after many models, many iterations & many changes in the market over decades.
Therefore, the key factor is not whether you create new technology, or question convention, or do one thing better than the competition.
The key factor will always be a culture of continuous innovation - and a focus on the one thing you are innovating on that really matters.
To keep promising something truly innovative i.e. new, but also valuable to your customer.
To deliver on that promise.
To keep iterating to deliver more value & a bigger promise at each iteration.
That’s what true innovation is really about.