On October 21, 2014, we were treated to rare insight into the thought process of Silicon Valley innovators. The old adage that all the good ideas have been taken just isn’t true. Vivek Bhaskaran, CEO of IdeaScale; Herman Gyr, author and consultant; and Pat Younge, formerly of the Travel Channel and BBC, each provided solid examples of how to implement the COSTAR model to drive innovative ideas.
Much has been said about innovation as a response to disruptive market forces. Essentially the question is: Do you want to be the sheep or the wolf? The wolf is driving the disruption. The sheep gets consumed. What can be agreed upon is that our current market state is changing rapidly. In order to keep pace, organizations must continue to innovate. We can no longer be satisfied with business as usual – unless you see yourself as a sheep.
To stay in the game, the presenters stressed the need to continuously redefine our territory and our value propositions. This requires the discipline of innovation. However, the problem is most organizations do not have a formalized process to foster innovation. In his portion of the presentation, Herman Gyr quoted very dismal statistics from a Doblin Group study – up to 96% of new projects fail to meet ROI targets. This holds true across industries. The exceptions are those ideas which run through the venture capital process. VC-backed ideas succeed closer to 31% of the time – an eightfold increase over non-VC backed projects.
Although brilliant ideas may arise in a random fashion, true innovation is a process with a defined flow. The graphic below highlights the five steps necessary to weed through the ideas, refine and polish them (which involves iteration), and take the best idea forward into the market.
There are multiple views on the process of innovation and how best to foster an environment or culture where it can thrive. The presenters shared their take on COSTAR as a method for fostering innovation. Through an iterative process the six-step model will yield a compelling business plan with a viable business model.
What voodoo you ask lies behind this model? Well, let’s break COSTAR down:
- Customer is the “C” in COSTAR. We absolutely must know who the customer is for the idea and what unmet need will be resolved.
- Opportunity requires that we size the potential market and that we clearly understand the trends driving the market.
- Solution describes how we expect to satisfy the identified need – in short, what are the key features and functions.
- Team is critical. Funding will often flow in the direction of a talented team who have the experience to bring the idea to fruition.
- Advantage measures the competitive nature of the market. It identifies alternatives and lines your idea up with those alternatives to assess performance.
- Results are the quantifiable benefits to the customer, the enterprise and the investors.
IdeaScale is a prime example of how innovation can be applied to fostering innovation. That may seem redundant, but truly it is not. The platform incorporates the COSTAR model, which allows team members to pitch an idea and to have that idea “polished” through a crowdsourcing approach. Iteration refines the idea much in the same way the ocean polishes clear broken glass to form its own frosted sea glass. While platforms such as IdeaScale facilitate idea creation, the organizational culture must also be aligned to promote and recognize innovation.
An example that Pat Younge spoke to was his team’s use of COSTAR to pitch the idea for the successful show Man v. Food. Mr. Younge indicated that it is no longer just about the show, but about how the idea can be extended into broader contexts (e.g. mobile apps, contests, and lifestyle activities).
As a market researcher, I see how the market is being continuously disrupted. Although the COSTAR model may seem tangential to what we do in the MR space, many of the model’s elements require the types of input that we are best positioned to offer: e.g. customer profiles and competitive intelligence. If you have pushed innovation off into a corner, now is the time to take a second look.