How should firms identify innovation opportunities and predict market potential at very early stages and in new areas (“green fields”) and ambiguous environments? Here are three approaches:
1. Find Innovation Adjacencies:
Adjacent markets are an attractive way to grow. Adjacent markets are not too far away from your core business in terms of channels, technology, price point, brand, etc.. To find them, I recommend The Big Picture framework developed by Professor Christie Nordhielm at The University of Michigan. The Big Picture outlines four quadrants that completely define any market category. To find “green fields”, consider each quadrant one at a time and imagine extending beyond the bounds of the category in some close by, adjacent way. The key is to stretch, not leap beyond your inherent business model. Ask yourself these questions:
- Quadrant 1 Adjacencies: What substitute products are non-category consumers using to fulfill the need. Where are they buying it? What complementary products go along with these substitutes?
- Quadrant 2 Adjacencies: What other products do your loyal customers buy, perhaps at the same price point or to fulfill the same or similar brand promise?
- Quadrant 3 Adjacencies: Why do multi-brand customers use several brands? Is it time-dependent? Situation-dependent? Why does it vary? What other products are used when the competitive brands are consumed?
- Quadrant 4 Adjacencies: What other category of products does your competitor sell? How do those fit into their product line? How could they fit into yours?
Once you identify potential adjacencies, apply an innovation method to create new-to-the-world concepts.
2. Cooperate with the Competition:
Co-opetition is an idea described by Barry Nalebuff and Adam Brandenburger in their book, “Co-opetition.” It means cooperative competition – when industry participants behave in a way that benefits all. They coopetate rather than compete. The trick is to apply innovation templates to the Value Net model of co-opetition. Here’s how. List the activities of each Value Net participant (Company, Supplier, Customer, Complementors, Competitor). Rotate each specific company in the Value Net model so that each takes a new role (competitors become suppliers, suppliers become complementors, etc). Use each template on the new list of activities, starting with Task Unification. Using Function Follows Form, envision how the new role creates a “green field” market.
3. Listen to the “Voices”:
Here are three less obvious sources of “green field” opportunity.
- Voice of the Product: Products have enormous amounts of information coded into them through years of design improvement. A corporate innovation method such as S.I.T. lets you “interrogate” the product to find new, undiscovered market benefits.
- Voice of the Brand: Brands also have information coded into them. The key is to extract the information and data that contributes to the brand promise to see hidden assets and market potential. For this I recommend the semantic search engine, Goldfire.
- Voice of Serendipity: Many products are invented accidentally. Serendipity led to the microwave oven, corn flakes, Teflon®, penicillin, fireworks, Viagra®, chocolate chip cookies, and the most famous of all accidents…the Post-it® note. While serendipity is unpredictable, there is value if you can unlock its hidden secrets.