Innovating in Unfamiliar Markets

How to De-risk Transformational Projects

Is your company taking needless risks?

You may have noticed we use the term “unfamiliar” market instead of “new” market. A truly embryonic B2B market is rare. Prior to new innovation, customers’ needs in the target market were probably addressed—even if poorly—by an existing solution. When Intuit launched Quicken® software, for instance, small business owners’ accounting needs were being met by bookkeepers and accountants. In our experience, many B2B companies call a market “new” when in fact they mean, “new
to us.” This strikes us as supplier-centric—not customer-centric—thinking. The market was there first. It is the supplier that is “new.” This is significant because it means you don’t have to live with uncertainty. Customers in these
pre-existing markets are certain about many things you need to understand. And these B2B customers—rich in knowledge, interest, objectivity and foresight—can tell you what is needed to eliminate most uncertainty. This brings us to some very good news: You can develop new products for unfamiliar markets with little risk, if you just think differently.
To start, uncertainty is different than risk. If something is uncertain it can be either good or bad, but what will actually happen is unknown. The weather can be pleasant or miserable, the stock market can go up or down. The key is that
uncertainty always has two sides to it—good and bad. You just need to figure out which side of uncertainty the future holds for you… before exposing yourself to a large potential loss. Before we show you how, let’s discuss risk. Risk is always about assigning a probability to the downside: “What’s the risk of losing $1 million?” Risk comes with the ability to assess the future with some degree of confidence, e.g. a 40% chance of thunderstorms tomorrow, or a 50% chance of new product success.

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