Turning Good Ideas into Profitable Products

In the second blog in our series on failure, and how to embrace it in branchless banking, we hear from Grameen Foundation's AppLab Money who are no strangers to good ideas dying young.

All breakthrough innovations are born from good ideas. But not all good ideas make it to market as breakthrough innovations. Many things go wrong along the way that derail their development, and lead them to be tossed aside, and ultimately forgotten. Millions of R&D dollars are wasted when good ideas die. Even the most innovative of organizations manage to get it wrong and fail somewhere along the treacherous path of turning good ideas into profitable products.

At Grameen Foundation’s AppLab Money, we are no strangers to good ideas dying early. Through our engagements with commercial scaling partners we have learned a few hard lessons along the way. One common mistake we have observed, time and time again, is with replication. Many of our partners have become intoxicated by the success of a product in a nearby market and have mobilized to replicate that success in their own. Often we see our partners underestimate the time, the money and the organizational commitment that is needed to bring that good idea to market.

Photo by Tanya Rabourn

When M-Shwari became all the rage in Kenya many of our partners took notice, and we worked with one to develop a similar product for their market. Not long after we kicked off the effort we realized that we had undertaken a nearly impossible task. M-Shwari was expensive to build and to operate. New credit-scoring algorithms needed to be developed to facilitate on-demand loans and new systems had to be built to run the algorithms. A dedicated team had to be allocated to ensure that credit risk was being effectively managed under this new structure of credit scoring. Such an effort was not cheap. And when our partners saw the real costs of developing and running a mobile-based credit product, they were taken aback.

Had we more closely evaluated our partners from the offset, we would have quickly realized that they were not ready for the paramount changes that would be required to replicate M-Shwari, nor were they ready for the mammoth investment. If we could go back we would have proposed an innovation that could more easily be implemented and more quickly developed. This is especially because our partner was really looking for a quick-win, or a product that would take their market by storm. Instead of working to copy M-Shwari’s features, we should have focused on the objective of the quick win, and developed a product that more easily fit into existing systems, organizational structures, and allocated product development budgets.

We also learned a hard lesson about timing during another engagement with a partner. Having worked with this partner for many years we had established very close contact with many of their senior leaders. When we kicked off our innovation process we had a well-articulated vision of which organizational problems we wanted to solve. We cultivated this vision in our collaboration with our partner, after many hours of interaction with staff at various levels in the organization. We had senior leadership bought in, excited about the direction of the process, and actively contributing to the development of product ideas.

Three months into our innovation process, our partner underwent a major fraud, and investigations eventually revealed that it was internally driven. The result was disastrous for our team. Almost overnight most of our key contacts had resigned, been fired, or had been reassigned to another country. Naturally this derailed our process, as we had to wait for the organization to stabilize. The new staff that eventually replaced our well-known colleagues had very different visions of the future. It became quickly apparent that the products that we had developed were no longer relevant. So we had to go back to the drawing board and produce a set of ideas that were more suitable to an organization that had changed overnight.

This experience taught us that good ideas must be introduced at the right time—and the right time can quickly become the wrong time. The unfortunate incident of fraud couldn’t have been predicted, but every innovation process will deal with some aspect of change during its course. That change could be driven by a shift in personnel, a re-articulation of strategic objectives or the introduction of new technologies into the market.

We cannot escape change when innovating. We must stay nimble and always be willing to re-evaluate. Wherever possible, we must integrate the future into our product design. This could be done by engaging with industry trends and forecasting intelligence, or keeping an eye on technological developments that could impact how the product is delivered and used by customers. It can also be done by ensuring that the product design reflects the strategy as it is today, and the vision of where the company wants to go tomorrow. Keeping a hand on the pulse of these changes, and ensuring that they are reflected in the product design will drastically increase the likelihood of turning good ideas into profitable products.

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