Hello, this is Dr. Jim Lawson from growth strategies International, here to talk to you about how to develop a new product and take it to market. This is the beginning of section two concept analysis, we're going to take you onto the journey of innovation and discovery. So what is an innovation? How is an innovation different than an invention? Well, an invention is the discovery of a new idea. However, unless the idea solves a problem, it's really not an innovation.

And successful innovations create value. So innovation has the potential to become a successful innovation. But an invention in and of itself is not an innovation. And innovation is a match between a need and a solution. And successful innovations create value, what's an opportunity, and opportunity is the seed that might be coming to innovation and we'll talk about looking for opportunities. And defining what the innovation is to solve those problems.

So the development of new products and services that meet a customer's need better than the kernel turns is do is what the goal of this course is. And, and it all starts with innovation, and opportunities. So why is innovation important? Well, innovation sustains growth in a competitive environment. We want to meet or exceed our customer needs. We want to make sure our company is able to survive in an era of wrenching change.

We want to differentiate ourselves from our competitors. We want to add features and services that set our offerings apart from others. We want to drive global competition, and we want to drive greater productivity and leadership in new markets. That's what innovation is all about. I'm Dr. Jim Watson and I started the Center for Innovation at VA systems. We have some great concepts and ideas, starting new products and new markets and I'm gonna share my secrets with you.

Well, what are some of the sources of innovation? Well, there's unexpected occurrences. Unexpected successes or failures are excellent sources because most businesses simply ignore them. You take, for example, three M with a post it note, a chemist a three ever thought he had failed because the adhesive was was not sticky enough until someone discovered, hey, this is perfect for putting on the back of a piece of paper and sticking into a wall or a computer. And once they discovered there was a use for it became a very profitable product line for them. So those were unexpected occurrences Peter Drucker mentioned six sources of innovation the second the second one is integrities disconnect between expectations and results.

So is it taking too long to do this isn't not just being performed well enough. I have a lot of people that come to me with some great inventions, and they were turning them into innovations we're creating, we're creating value for their company. process needs good source of innovation, unexpected changes in the industry and market structures. Look what's going on around you look at the energy, energy, revolution, new sources of energy, low fuel prices, changes in the healthcare industry, new medical devices and pharmaceuticals. There's all kinds of changes in the industry and market structures that are sources of innovation. Population or perception changes, there'll be social needs.

The population is always looking for something different, what is what is the next iPad and being aware of what those changes are perceptions are our sources of innovation. Lastly, just gaining new knowledge, passively reception by looking around you And passively bringing things in new knowledge that could be sources of innovation or actively scanning the environment for problems that need to be solved. Social Networking is a great source of innovation. So let me tell you about a company I started called pro link. Pro link developed the first GPS Global Positioning System golf course management system. So have you ever played golf where you had a screen up on the golf cart, and it showed where your cart was, and it showed where the, where the flag was the distance between you and the flag and all the bunkers in between?

We invented that system, myself on a couple engineers, co founder of the company, we received a patent on the on the software, the common filter that the algorithms that run the system, the GPS system, and we were the first to market with it. Okay, so we developed our prototype, and we took it to the golf courses, and they said, Well, that's great, but What do we need it for? So what's the what's the point here? The point here is that we had, we had a solution looking for a need. Okay? I see so many inventors innovators have a solution looking for a need.

So we soon discovered that the GPS system increases speed of play on the golf course. And therefore it increased revenue by 15 to 20%. So once we were able to demonstrate that at resort courses, people weren't walking around trying to determine what the distance was and the layout of the course and how far this bunker what club do I use? They look up on the screen, all the informations there, the speed of plays faster, they get more golfers on in the same amount of time, and they make more revenue. So now they were interested, yes, increase revenue. How do we how do we buy?

Well, we hadn't developed our business model it cost much too much for a golf course. To be able to afford to buy the system. But we found out if if they just raise the green fees by a small percentage and give us a portion of that percentage, we can amortize our cost in a year, a year and a half. And we can both make money and it's no risk to the golf course. So now we had a business model. So you have to have a value proposition and a business model.

And but to start the start off with a minimum viable product, and that was a source of innovation. Well, we're getting into that more throughout the course. Let's talk now about discovering and maturing disruptive innovations. Okay, first, we have to scope what the growth gap is. So what is the big gap between what we're trying to achieve and what's currently out there? And then we get this.

We have to search for opportunities at Wharton School of Business Center for Innovation. They call this peripheral vision, scanning for opportunities. We find some opportunities we have to interpret them? Is the market concept real? Is the product concept real? Can the product be made competitive?

Can we be competitive in the marketplace? Will the product be profitable at an acceptable risk? And does launching the product makes strategic sense? Once we answer those questions, and we have to understand and manage what the risk are, and we use metrics to measure our success along the way, there's a slide in your in your package that talks about innovation focal areas, it shows that innovation can occur across the spectrum. From business models were like Dell makes custom computers based on your specifications of what you want. You can mix and match different components, Walmart, their innovation, focal areas, networking, with external partnerships to get you the best best price.

FedEx their innovation focal area is how they service their customers. There's a branding like Lexus and BMW, the customer experience how you create an overall experience for your customers that you want to pay more because you've differentiated your your product, there's a perception of better value. There's also a slide in your in your package called scratch your own itch. And in there, there's a link to Kauffman Foundation YouTube, on how an entrepreneur goes through the process of discovering innovations, and determining if the market is real. And I encourage you to watch it. It's a very interesting and entertaining YouTube.

The link is on the presentation. So I'm going to summarize now by saying the key point here is that innovation is a match between a need and a solution, and successful innovations create value. The next lesson is to the second part of concept analysis, we'll be talking about minimal viable product and minimum viable product. Has, or MVP has the minimal set of features necessary to demonstrate the ability of the product to satisfy a customer need the minimal set at the least cost and the shortest amount of time and we'll be getting into how to design role viable product and what those features are. Also, we'll be learning in the next lesson about bringing a new product to market requires experimentation, how to conduct those experiments to determine that you have a viable solution that solves a real problem that customers need and they want. I look forward to seeing you in the second part of concept analysis.

Thank you.