Page 92 - Grow from Within Mastering Corporate Entrepreneurship and Innovation

Ne w Business Design 79

Step 1: Define Your Target Customer Segment(s)
and Value Proposition Hypotheses

Everything in business should start with the customer. New
business design is no exception. Unfortunately, the customer
is not always as obvious as he or she might seem to be. Pio-
neers in innovation are recognizing that articulating and vali-
dating market needs early might be as important as, or even
more important than, finding and developing technologies or
products. Development teams are more likely to generate high-
quality solutions if they have a clear idea of what needs they
are attempting to address. Your innovative concept may be
valuable for your existing customers, or it may not be.
Although customers can be a rich source of innovative ideas,
they are typically not good at thinking beyond what already
exists, a limitation of most customer surveys and focus groups.
As Clayton M. Christensen showed in his 1997 book The Inno-
vator’s Dilemma, existing customers may be particularly dis-
posed against truly new concepts, especially if those concepts
are disruptive. If you rely only on your existing customers,
you’re likely to nix many potentially powerful opportunities.
New ideas often appeal to entirely new customers, or perhaps
new segments of the same customer populations that you
already serve. Substantial, game-changing innovation often
comes from discovering needs that customers don’t even know
they have until those needs are fulfilled. Customer insight
methods and market research have matured over the past
decade, both quantitatively and qualitatively. Examples
include empathic design, ethnographic research, and customer
activity cycle mapping.
Great ideas have certainly come without the customer in
mind. However, if they eventually succeed in the marketplace,
it is only because they found the right customers, either delib-