# What’s your startup ideation strategy?

Nearly forty years after its invention, the world’s most confounding cube of colours is still going strong. It is estimated that there have been 400m Rubik cubes sold worldwide, a simple colour puzzle that offers 43,252,003,274,489,856,000 possible combinations (that’s 43 quintillion in shorthand).

In the mid-1970s, Professor Ernő Rubik worked at the Department of Interior Design at the Academy of Applied Arts and Crafts in Budapest. Teaching geometrical shape concepts, he designed the cube as a teaching aid to show the possibility of 3D modelling. He did not realise that he had created a puzzle until the first time he scrambled his new cube and then tried to restore it – it took him over a month to solve it.

On the original classic Rubik’s Cube, each of the six faces was covered by nine stickers, each of one of six solid colours: white, red, blue, orange, green, and yellow. White is opposite yellow, blue is opposite green, and orange is opposite red, and the red, white and blue are arranged in that order in a clockwise arrangement.

An internal pivot mechanism enables each face to turn independently, thus mixing up the colours. For the puzzle to be solved, each face must be returned to have only one colour.

He called the wooden prototype Bűvös Kocka: the Magic Cube. Rubik applied for a patent, but it took a few years to get the idea to market. In 1979, the Hungarian state-owned toy company Konsumex presented the cube to the International Toy Fair in Nuremberg, where it caught the attention of entrepreneur Tom Kremer.

By the end of that year, Kremer had convinced the Ideal Toy Company to take a chance on the puzzle. Ideal licensed the cube, and within two years it represented 25% of the company’s revenue.

At the end of 1980, Rubik’s Cube won awards for best toy across the world. By 1981, Rubik’s Cube had become a craze. As most people could only solve one or two sides, numerous guide books were published. At one stage in 1981 three of the top ten best selling books in the US were books on solving Rubik’s Cube, and the best-selling book of 1981 was James G. Nourse’s The Simple Solution to Rubik’s Cube which sold over 6 million copies.

Every legal permutation of the Cube can be solved in 20 moves or less. The current world record for the quickest solution is 4.59 seconds – but a robot solved it in just 0.637 seconds. There are also World Records for the fastest one-handed solving (6.88 seconds), feet solving (16.96 seconds).

Though sales fell from their peak in the 1980s, and were negligible in the early C21st, with the advent of the Internet, fans connected and shared strategies, and sales increased. Then earlier this year it featured in the SuperBowl, and in the new Taylor Swift/Ed Sheeran video, cementing the puzzle’s rise back to cultural prominence. It is estimated that one in seven people have played with this fascinating and frustrating puzzle.

Rubik’s Cube is an example of an innovation that took the world by storm, evolving into a populist toy from a device originally developed for teaching. Like many innovations, it came about almost by accident, a successful outcome arising from trying to solve a different problem.

For startups, the combination of original thought, timing, serendipity and chance encounters with future customers, often define the innovation journey. Innovation is not a very well understood process, by its very nature, it involves hits and misses because there is always an element of guessing and pre-empting the future, which by definition, is unpredictable.

Every sphere of human life today is undergoing rapid technological driven innovation, from cryptographic currencies changing the shape of money to the Internet of Things and Blockchain creating a new ‘Internet of Everything’. Newer, innovative technologies are developing faster than the speed with which we can rein in its unintended consequences.

New technologies track your every move, habit, communication or location, reducing privacy and opening pores to access your personal experiences. Startups are establishing Platform businesses, which in turn are disrupted by Blockchain, which promotes disintermediation and elimination of third parties. The biggest human experiment is a Hegelian pursuit of the one truth.

For a startup, innovation should always be customer centric. Never build something that you’ve not tested with users, and that ultimately customer won’t pay for. Startups with product innovation that doesn’t evolve with their customers’ lives don’t survive too long.

So many startups set out to innovate, but lose their way. All of the time, money, and energy invested loom over them like an ominous shadow. There was so much momentum, goodwill, collaboration, and then the painful, crash into the wall.

If you are striving for something new outside of the existing paradigm, think of the first trial or two as a learning investment. You may stumble upon revenue or insights that lead to giant leaps of both customer traction and inspiration, however, embrace this tension and good fortune at the right moment.

Startups often make the mistake of viewing innovation as a set of unconstrained activities with no discipline. In reality, for innovation to contribute to growth, it needs to be designed as a process from start to deployment.

When startups lack a formal innovation pipeline process, progress tends to be based on delivering the best demo or slide deck. Instead, there is a necessity to talk to customers, build minimal viable products, test hypotheses or understand the barriers to deployment.

Startups need a self-regulating, evidence-based innovation pipeline, a process that operates with speed and urgency, and that helps to curate and prioritise problems, ideas, user testing and feedback. Most importantly, minimal viable products and working prototypes will have been built and road tested.

A clear-cut innovation process inside a startup is one focused on ideation, a process that hustles game-shaping ideas by creating customer solutions that deliver remarkable impact at the intersection of purpose and profit – not just ‘disruption’.

Ideation is the act of moving ideas down the track from conception to implementation. It seeks to create clarity and a pathway from imagination to execution. Ideation embraces lean startup principles – hold your vision, but take small steps, and focus on learning as a true measure of progress, providing life-shaping insights that change our trajectory or sober us with reality that kills the ‘awesome’ idea we once thought we had.

While there is no perfect ideation to optimise innovation outcomes, the following is a helpful process that I’ve used and refined over the years while working with numerous startups:

Curation On a regular basis – say every three months – startups should get out of the building and talk to potential users and customers to help explore and identify new solutions that can be deployed rapidly. Gaining reflections to find where a given problem might exist helps to find opportunities for commercially available solutions to problems.

This process also helps identify who the customers for possible solutions would be, and even what minimum viable products might look like. Some ideas may drop out when you recognise that they may be technically or financially unfeasible, but that’s validated learning.

Prioritisation Once a list of innovation challenges has been curated, it needs to be prioritised. One of the quickest ways to sort innovation ideas is to use the McKinsey Three Horizons Model: Horizon 1 ideas provide continuous innovation to a company’s existing business model and core capabilities; Horizon 2 ideas extend a company’s existing business model and core capabilities to new customers, markets or targets; Horizon 3 is the creation of new capabilities to take advantage of or respond to disruptive opportunities or disruption.

There will be some projects in Horizon 0 – graveyard ideas that are not viable or feasible.

Frame the challenge From the prioritised list, articulate, document and frame what the challenge you’re seeking to solve for is a foundation for the next stage. Jumping to a solution before understanding the context of the problem is premature. Ask yourself questions like What is the real problem we’re trying to solve? or What is the real job to be done?  are essential to ensure we don’t leap with a populist, unstructured idea.

Exploration & hypothesis testing Ideas that have passed through the filters so far now enter an incubation process, which aims to deliver evidence for data-based decisions. For each idea, build out a business model canvas. Everything on that canvas is a hypothesis, designed to be tested.

The framework gets you talking to potential customers. This is another major milestone: to show compelling evidence that this project deserves to move into engineering or, alternatively, that it should be off the list and killed.

Diverge & Converge The main goal of this element in the process is to generate lots of diverging ideas from the results of the hypothesis testing, all of the crazy thoughts you have on potential options and alternatives. Make it a rule at this point to never say ‘no’ to any idea, but keep the time defined to give focus.

Once you have a ton of ideas, it’s time to converge through design thinking, to identify common threads, building upon each idea by connecting them, and then determine one or two ideas that are desirable, feasible, and viable. Now is the time to stand back and ask: Does it make business sensee?

Prototype One of the most practical ways to test out a solution is to build a prototype. This doesn’t have to be an elaborate or costly endeavour. Whether the prototype is digital or done through user testing with hands-on customer experience, the goal is to uncover new insights. A good prototype will force idea refinement and iteration.

Iterate Forward A startup should have a culture committed to constant experimentation, and iteration will continue to foster and accelerate this thinking. It will take a few cycles to get a process working with the required diligence and patience, but keep iterating forward. What’s next?

Refactoring: At this point, it’s time to integrate the innovation into the existing business model. Trying to integrate new, unbudgeted, and unscheduled innovation projects into a startup results in chaos and frustration. In addition, innovation projects carry both technical and organisation debt for startups.

Technical debt is often ignored in order to validate hypotheses and find early customers. This quick and dirty development can become unwieldy, difficult to maintain, and incapable of scaling.  Organisational debt is the culture compromises made to ‘just get things done’ in the early stages of an innovation project.

The solution is refactoring, fixing stuff to make it more stable, and avoid the myopia of innovation over business as usual. Whilst technological advantage degrades annually, standing still means falling behind, so it’s all about having the business case from the early stages in the process to act as a bookmark for reference.

Startup innovation is hip, complete with beards and fancy coffee machines, but to do it right can’t be left to chance and serendipitous moments, it requires a rigorous process. Innovation means you have to move the needle, not just vanity of being a ‘unique, disruptive startup’.

For startups, ingenuity and rebooting the offering is essential, but It’s important to be clear about the difference between invention and innovation. Invention is a new idea. Innovation is the commercial application and successful exploitation of the idea. Anyone can invent, not everyone can execute.

Think big, start small, keep moving. Like the Rubik’s Cube, if you are curious you’ll find the puzzles sat in the palm of your hand. If you are determined, you will solve them, with deft visualisation, ideation and execution.