Bringing bloated innovation back to its basic principles

Innovation has lost its way. Today, it focusses on finding groundbreaking and radical new ideas at every turn. It’s become expensive, with long lead times, high costs for testing, and carries significant risk once finally launched. What’s missing is a laser focus on the central goal: creating products and services that provide enormous value for customers – an experience or service they cannot live without.

The much-hyped Segway is an apt example of innovation losing its way. The two-wheeled self-balancing vehicle struggled to make a profit. It lacked fans beyond tour guides and some police forces. This certainly wasn’t helped by Segway users being mocked and a few high-profile collisions. In 2015, the company was acquired by Ninebot Inc. and raised $80m. However, production stopped in 2020 when the Segway product was only making up 1.5% of Segway / Ninebot’s total revenue. Segway was a solution making use of new technology for the sake of it, rather than prioritising the most value-adding parts of its products.

As innovation has become buzzy, it has also become complex, expensive, corporatised and cosmetic. Returning to the first principles of innovation and the tools that we know drive tangible value is necessary to keep innovation focused on customers, not fanfare.

Enter Jugaad. Jugaad is a phrase that describes Indian ingenuity, focussing on a flexible approach to innovation that uses limited resources to solve key challenges. Applied properly, we believe it can take innovators back to the fundamentals of entrepreneurship with a mindset that finds creative ways around business difficulties when others give up.

The power of Jugaad

As innovation has become buzzy, it has also become complex, expensive, corporatised and cosmetic. Returning to the first principles of innovation and the tools that we know drive tangible value is necessary to keep innovation focused on customers, not fanfare. Jugaad can help us get there. Jugaad innovation teaches that simplicity, flexibility and opportunity are the core drivers of innovation. It requires ruthless prioritisation, strips away the frills and demands balance sheet discipline to get the most bang for your buck. We believe that applying the six lessons outlined below can help many businesses learn from the use of customer- and value-led techniques that Jugaad champions.

The following businesses best demonstrate the use of these lessons in the market today.

Safaricom

Building on existing infrastructure and creating inclusive business models designed for the masses has boosted financial inclusion in Kenya. The proportion of Kenya’s population with access to mobile money services increased from 14% in 2006 to 83% in 2019. Safaricom’s M-Pesa mobile-based banking largely drove this, boasting 26 million users. Safaricom developed the idea after phone companies realised they had unintentionally created something that resembled a currency, tapping into a customer need. Kenyan customers were purchasing and reselling airtime (phone data or minutes), because it was safer than carrying cash and more convenient than accessing a bank.

Lessons to apply:

1. Repurpose existing infrastructure and materials e.g. open source software, partnerships, and more
2. Design for the masses with use cases that can scale

Glossier

Leveraging constant customer feedback to deliver superior value helped Glossier achieve a valuation of $1.2bn in 2019. The brand was born out of founder Emily Weiss’ beauty blog ‘Into the Gloss’. The now global beauty business leverages its original blog as a vehicle for authentic engagement and community building, encourages its customers to engage in conversation about the beauty products they use. The blog has remained a central mechanism of the business’ laser focus on seeking, listening and acting on customer feedback. The brand has gained a loyal following as a result.

Lessons to apply:

1. Create authentic, value-adding engagement models with customers
2. Properly measure and act on customer feedback to build the business

Slack

Being highly adaptable and unafraid to update their business model helped Slack to become a household name. The business started as a game called Glitch. It briefly launched in 2011, but was returned to beta as the concept was declared unviable, failing to attract enough consumers to survive.

Jugaad innovation teaches that simplicity, flexibility and opportunity are the core drivers of innovation. It requires ruthless prioritisation, strips away the frills and demands balance sheet discipline to get the most bang for your buck.

By the time it pivoted, Glitch had burnt through $10m on development of the $17m raised by investors. With resources running out, the team took just two weeks from shutting down Glitch to launching Slack. The real opportunity had been under the team’s noses. They realised the internal communications platform used by players and staff was more effective than what was in the market. Their success came from adapting their business model quickly, not from cutting corners. In 2014, Slack reached unicorn status. This summer, it’s set to be acquired by Salesforce for $27.7bn. Its pivot clearly worked.

Lessons to apply:

1. Use proof of concepts to run experiments with customers and prove product-market fit early
2. Stay open-minded about where opportunities lie, and double-down on value drivers

So, you want to discover your innovation potential? Jugaad and the six lessons above are your answer.