The Innovation Matrix, often associated with the work of strategic management theorists, helps businesses evaluate and prioritize product development ideas based on their potential for success and innovation. This matrix is useful for startups like yours to decide which ideas are worth pursuing and how to allocate resources effectively.
What is the innovation matrix?
The Innovation Matrix is a strategic tool that classifies product ideas based on two main criteria: their novelty (how new or innovative the idea is) and their potential impact (the extent to which the idea can change the market or fulfill a need). This classification helps in identifying which ideas have the highest potential and should be prioritized.
Dimensions of the innovation matrix
- novelty: This axis measures how innovative or different the product idea is compared to existing solutions. High novelty ideas are groundbreaking and can disrupt markets, while low novelty ideas are incremental improvements on existing products.
- impact: This axis assesses the potential effect of the product on the market or industry. High impact ideas have the potential to significantly change consumer behavior or market dynamics, while low impact ideas have a more modest effect.
Applying the innovation matrix
For your startup, you can use the Innovation Matrix to evaluate product development ideas as follows:
- identify your product ideas: List out all potential product ideas you have for your startup. This could include new features, entirely new products, or significant improvements to existing offerings.
- evaluate novelty: Assess each idea’s level of innovation. For example, if you’re considering a new template for your customizable code product, determine whether it offers a novel approach or is similar to existing solutions.
- evaluate impact: Consider the potential market impact of each idea. Will it address a significant pain point for your customers or offer substantial value? For instance, a template that solves a major problem for a large segment of your target market would have high impact.
- plot ideas on the matrix: Place each idea on the Innovation Matrix based on its novelty and impact. This will help visualize which ideas are high-risk but potentially high-reward and which are more incremental.
- prioritize development: Focus on ideas that are high in novelty and impact. These are likely to offer the greatest return on investment and competitive advantage. For lower novelty and impact ideas, consider if they should be refined or if resources should be allocated elsewhere.
Real-world examples
- apple’s iphone: When Apple developed the iPhone, it was a high-novelty, high-impact product. It introduced a revolutionary touch interface and integrated various functions (phone, internet, media player) in a single device, significantly changing the mobile phone market.
- tesla’s model s: Tesla’s Model S is another example of a high-novelty, high-impact product. It combined electric vehicle technology with a luxury car experience, disrupting both the automotive and energy markets.
- microsoft’s surface: The Microsoft Surface tablet had lower novelty as it followed the trend of tablets but aimed for high impact by integrating Windows and offering unique features like a detachable keyboard, aiming to bridge the gap between tablets and laptops.
Applying to your startup
For your startup, if you’re considering developing a new feature for your customizable code or creating a new template, use the Innovation Matrix to determine its potential. For example, if a new template addresses a major unmet need and offers a unique solution, it would be a high-novelty, high-impact idea to prioritize. Conversely, if it’s a minor improvement to an existing feature, it may be lower on both axes and might be pursued after more innovative ideas.
Using the Innovation Matrix can help you make informed decisions about which product development ideas to focus on, ensuring that your resources are directed towards initiatives with the greatest potential for success.