Published on November 17, 2023, 1:38 pm

Every scaling business reaches a point where they must decide whether to stick to their core activity or explore new opportunities. For tech giants, the common approach is often to acquire early-stage companies or teams and integrate them into their ecosystems. However, this can be challenging for mature organizations that are trying to break away from their core activities.

Going from zero to one is always more difficult than scaling from one to 100, and statistically, less than 8% of internally launched ventures reach scale. Additionally, the mergers and acquisitions (M&A) strategy may not always guarantee growth. This approach requires deep pockets and expertise in acquiring and integrating ventures, yet 70% to 90% of acquisitions end in failure.

At Reface, we have taken on the challenge of building new businesses within our company. In this article, I will share our framework for evaluating new product ideas and how we determine if a concept is worth pursuing.

While noticing ideas is undoubtedly a great way to discover opportunities, it cannot be the sole approach for a company that needs a constant flow of ideas. Through trial and error, external advice, and extensive research, we have developed our own methodology that generates a higher number of test-worthy ideas compared to just relying on “noticing.”

The first step in fostering innovation within an established company is creating dedicated space for new ideas to emerge. In the daily routine of a functioning business, employees are usually focused on their tasks and tend to stick with established processes rather than exploring new ideas. Therefore, it is crucial to establish conditions that encourage idea generation.

This can involve forming a small dedicated team (preferably no more than five people) responsible for managing the idea backlog, creating an analytical feed of ideas, and developing a framework for evaluating and prioritizing ideas aligned with your company’s strategy. During the initial stages of idea exploration, collective brainstorming can be effective. As the idea progresses into execution, clear ownership is important to resemble the circumstances of a founder launching a startup.

Building an analytical feed of ideas is equally essential. We have designed a system that parses recent ML research papers, monitors social media and search trends, and tracks various other sources of inspiration.

Throughout the ideation process, we offer two key pieces of advice. First, adopt a laser-focused approach with concentrated sprints aimed at a group of ideas. If one idea is rejected, swiftly move on to the next. Second, focus on identifying promising idea spaces rather than fixating on a specific idea. While the initial concept may not succeed, exploring the right space can lead to the discovery of viable alternatives. In essence, we hunt for fertile ground, trusting that within it, the seeds of innovation will naturally sprout.

By establishing conditions that foster idea generation and implementing a framework for evaluating and prioritizing ideas aligned with your company’s strategy, you can cultivate innovation within your organization. Embracing a diverse range of inputs and continuously seeking inspiration from various sources will increase the chances of developing successful new product ideas.

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