nov
18
2021
por Felipe Rebello
0 comentários

When should you expect the break-even of your digital product? (Part 2/3)

When should you expect the break-even of your digital product? (Part 2/3)
por Felipe Rebello
0 comentários

In Part 1 of this series, we covered what Disrupting Innovation is and how its high unpredictability makes reaching market-fit a more significant challenge. Today we’ll look at another innovation type.

Sustaining Innovation, in opposite to disruptive, it’s when new products or services are innovating the other components of a business model:

Fig2.When should you expect the break-even of your digital product?

It happens, for instance, when founders copy and paste already validated products from one country to another, or when they build the same product that the competition has, to the same market, but with a different communication & marketing strategy. The Innovation, in this case, happens, but not in the business-model core as in disruptive. If your budget is limited, this is a cheaper and more manageable way to develop a new digital product. Even with mega budgets, I see companies focusing solely on sustaining Innovation to reduce the time for reaching market-fit, thus reducing risk.

A classic example is Nubank, a Brazilian digital bank that started with a usual credit/debit card as its financial product. The customers could order via a mobile app with similar costs as competitors. The Innovation? Customer Relationship: Nubank’s customer service is one of the best in Brazil, leaving competitors light years behind (not mentioning many other social initiatives the company is pursuing successfully). After Nubank did the basics, they dared to get into disrupting Innovation with NuConta and other products, initiatives tending more to disruptive (still firmly based on sustaining). 

We all see many investments in nascent industries as MedTech, PropTech, EdTech, Fintech, BioTech, TravelTech, Insurtech, Greentech, Retailtech, and CleanTech since they ARE NOT ONE WINNER GETS ALL industries. Those market sizes are huge (some challenging to forecast but still promising). There is plenty of space for many new players, which we see happening: new products trying to get a piece of the cake as soon as possible.

Our incredible creative homo-sapiens minds are always looking for Innovation; it’s in our DNA. 15 years ago, when the waterfall methodology for software development was still the most used, creating a new product was a game for millionaires. With the popularization of Agile methods, the costs of launching a new web or mobile application have drastically decreased.

It’s safe to say that sustaining Innovation creates the environment for a faster breakeven than disrupting Innovation. It is the core message I wish to convey today.

After participating in many projects, I see that some founders believe it’s possible to disrupt a market and open a blue ocean with the same budget needed to sustain Innovation. This misunderstanding creates disappointment and demotivation. The good news is that there are ways to decrease risk. In the next and final part of this breakeven series, we’ll connect all the dots into the MVP development timeline and how to increase the chances your digital product will reach market-fit faster.

Now that you know the difference and are aware of it, are you maximizing your product development efforts for sustaining or disrupting Innovation? Feel free to write me a private message sharing your strategy and difficulties. We can elaborate on solutions and inventive options that might open doors, produce an original perspective, and put you closer to your winning aspiration.

Stay tuned, and in the meanwhile, keep creative.

Felipe Rebello is Head of Growth EMEA at Performa_IT – Talk to him: https://www.linkedin.com/in/rebello/

Visit our website: https://performait.com/?idioma=en

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