Monetizing Innovation

Chapter 3Why Good People Get It Wrong

If our product failure categories in Chapter 2 bring back painful memories, don't despair. You are in very good company. The 72 percent failure rate of innovation shows that the clear majority of new product initiatives end up as minivations, feature shocks, hidden gems, or undeads. The question, of course, is how do you prevent these from happening in your organization?

It would be easy for us to say the problem is that companies wait until the last moment in their product development process to think about monetization. Indeed, that's exactly what happened in most of the thousands of new product or service failures we have seen over the last three decades. But why is last-minute pricing so prevalent?

The reason is the reigning mindset or paradigm about monetization and product development. In that mindset, the work of monetizing a new offering is often viewed as unsavory, dirty, and detrimental to true innovation. According to this sentiment, dreaming up big, bold new product concepts should not be encumbered by asking for a price check.

If innovators are to succeed, this thinking goes, they must be given lots of runway. In the United States, the popular portrait of the innovator combines artistic spirit with the image of an underdog. Apple appealed to this in 1997 upon Steve Jobs's return to the company, using artistic icons like Miles Davis (a rebellious artist) in its Think Different campaign.

Using this mindset, asking product developers ...