Agile innovation

management

Build - Measure - LearnHow to evaluate

customer problems,

test your hypotheses,

evaluate and learn

from them

FR

OM

VI

SI

ON

TO

MA

RK

ET

SU

CC

ES

S.

Innovation Paper

Born in Ried im Innkreis. Matura at the Federal College of

Agriculture and Forestry in St. Florian near Linz. He then

completed his bachelor's degree in Economics and Social

Sciences and his master's degree in Strategy, Innovation and

Management Control at the Vienna University of Economics

and Business and the Indian Institute of Management

Ahmedabad. After working in the sports goods and food

sectors, he worked for LEAD Innovation initially as an

Innovation Manager, specialising in fuzzy front end and

business model innovation. Now, as Head of Innovation, he is

responsible for the entire project management.

+

The author.

A P A P E R F R O M F R A N Z

E M P R E C H T I N G E R .

Agile innovation

management

Lean processes, work like in a start-up - that

is the motto of Eric Reis's method. The aim of

the approach is to create innovation with as

little investment as possible. This is achieved

by replacing long-term planning with a

learning-by-doing approach that focuses on

testing hypotheses and customer feedback.

This way of working is also suitable for

established companies. While developments

of controllable innovation types and degrees

of innovation can usually be handled well in a

classic stage gate process, an adaptation is

necessary for innovations with a high degree

of innovation, since the rigid, linear process

often has a counterproductive effect. Agile

innovation management brings flexibility and

speed to your development projects through

its iterative and customer-centric approach.

In this paper you will learn how to apply

agile innovation management in your

company. 

Build - Measure - Learn. 

The validation process

2. Problem Solution Fit1. Problem Validation 3. Product Market Fit

If the identified

problem really exists

Validate the

importance for your

customer.

Does your idea solve the

problem? Generate

multiple solution variants

and validate which benefits

for your customers.

Is sustainable

monetization possible?

Validate whether you can

sustainably and

measurably represent this

value proposition.

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AEvaluate in a first step whether the identified

target group actually has the collected needs.

Understanding the customer what he wants is

decisive for success or failure. The better you know

your customers and their needs, the easier it is for

you to create a solution that creates benefits. 

There are many ways to evaluate customer needs.

The most common variant is to speak directly with

the customer.

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Validate problem

Why is this important?

Validate the customer's problem

1. Problem ValidationIs there a problem?

1. Understand your customer's challenges

Find out how the problems are currently being

solved

Identify the most frustrating problems with

the current solution

Understand how much your potential

customers want to have the problem solved. 

Get to know your customers' willingness to

buy

Choose those customers who have the greatest

desire for a solution. These are usually people who

tend to test products or technologies before anyone

else - which makes them early adopters.

Keep in mind that the goal of a qualitative survey is

to find out how your potential customer solves

problems. It is also important to understand why

there are certain problems. Open questions are

therefore best suited for the survey.

Let your customers know who you are and what the

reason for the interview is.

"Hello, my name is Franz Emprechtinger. We are

currently working on a project with Wiener Linien.

We would like to find out more about how people in

Vienna come from A to B. Getting to know your needs

helps us to create a service offering that adds

significant value for you and others. If that is all right

with you, I would like to start the discussion. This

will take about 15 minutes."

2. 3.

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1. Define the hypothesis to be validated

clearly and unambiguously. 

2. Select the relevant customers for

calls.

Create a list of questions

3. Create an interview guideline.

The order of the questions influences the result

significantly. Be sure to start with general

questions and give your customers the

opportunity to share their thoughts and

experiences with you. Afterwards, it is advisable

to go into more detailed questions before the end.

Don't give your customer the feeling of an interview,

but rather a conversation. Create a relaxed

atmosphere and focus on active listening. Do not

influence by your own thoughts and allow free

opinions and thoughts. Your client should speak at

least 80% of the interview.  

Follow his answers, ask for examples and motivate

customers to tell more about it. Make sure you

understand your customer.

Organize your questions

During the interview

Create a summary 

Summarize the interview with a concrete activity to see

if your interlocutor is really interested in your

project:"Would you be interested in registering for our

free trial month? Who in your network could you

recommend us to?"

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Search your notes and summarize the most

important findings. If you have gathered sufficient

information, use the validation forms to make a

decision. Mark your hypotheses as confirmed or

unconfirmed. 4. 4. What did you find out?

Reflect on the discussion with your customer and

revise your guidelines if necessary.

One of the main reasons why ideas fail is that the

solution is over-engineered. The new product or

service contains many features, but they are not

useful in solving the problem. 

The challenge is to find a suitable solution as quickly

and efficiently as possible. The matching concept is

called "Minimal viable product (MVP)" and is

characterised by the fact that it solves the

customer's problem with few but essential

features. 

Can you deliver what you promise to your customer?

To check this, it helps to create a prototype of your

product or service. 

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2.Why is this important?

How do you find the right solution?

Finding a solution

2. Product Solution Fit.What solutions do exist?

The average bathroom measures about 5-7 square

meters. It is usually not possible to place a

bathtub and shower on this area. In addition to

the "all-in-small" trend, accessibility was also an

important topic. 

Artweger developed the solution for a

bathtub/shower combination using the LEAD User

method.

After brainstorming, Artweger worked on the

implementation and produced several prototypes

in different variants.

Bathing and showering is comfortably possible

with one product. Thanks to the space-saving

solution, it is also possible to place this solution in

small bathrooms.

Innovation Paper

Issue

Solution

Prototype

Value promise

1. Would someone buy the bath/shower

combination?

2. Is the price adequate?

3. Is the additional benefit given?

Learnings

Example: Artweger Twinline combination

bathtub

3.A

Make your activities measurable, expand your

business while continuing to satisfy existing

customer needs. Make this profitable and

sustainable. 

The solution must make sense from a business

point of view. Consistent, data-based decisions

ensure objectivity.

Check the current cost structure and the existing

business model to see whether they are suitable

for new products or services. Identify, measure

and verify key figures such as customer acquisition

costs (CAC) and customer lifetime value (LTV).

The following applies: CAC > LTV. 

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Product Market Fit

Why is this important?

How to Get Product Market Fit

3. Product Market Fit.How do I market this solution?

It is important to know and understand your

customer funnel in order to gain the right key

figures. It reflects the Customer Journey from the

first contact to the purchase.

1. Create a draft of your Customer Funnel from the

first contact (e. g. website) to the completion of the

purchase.

2. Fill the funnel with first customers.

3. Follow your customers through the funnel until

you have 10 customers in the final phase (purchase

agreement). 

This key figure shows how many of your customers

do not return to you to make further purchases.

Contact those customers you couldn't motivate for

another purchase and try to find out why they

stopped using your products. 

What percentage of potential customers becomes

actual customers? This depends very much on your

business model - do you work with a Freemium

business model, pay-per-use, a monthly subscription

system or is your service free of charge?

This key figure describes how many of your

customers will return to you for another purchase

activity. How can you make your customers

happier?

Once you have calculated the key figures for your

company, screen them regularly - at best, weekly.

It is important to understand what influences

your key figures. 

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1. Design your customer funnel. Churn Rate 

2. Measure your key figures along

the funnel

3. Optimize your process based on

your learnings

Advertising expenditure/month

New subscribers

Customer Acquisition Rate (CAC)

Average revenue per user/month

Average subscribers Duration

Customer Lifetime Value (LTV)

€ 750

15

€ 50

€ 25

10

€ 250

Example:

Customer Conversation RateLTC > CAC

Retention rate

Create a measurable business

First define your core hypotheses. What don't you understand

and what do you need to know to develop your business? This

list provides an overview and ensures that you keep track of

everything.

Always record your activities and learnings. Survey and

observe your customers, experiment and record them. 

To confirm an acceptance, you should have collected sufficient

information. Do not make the results dependent on a customer,

but stop the tests as soon as you notice that you do not gain any

new knowledge. Once you have a clear picture of your

customers' needs, it's time to make a decision. 

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1. List the hypotheses to be tested

2. Performing the tests

3. Evaluation of Tests & Learnings

Build, Measure, Learn

in practice

List the test items to be

tested suppositions

affirmed

unconfirmed

We think that ...

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affirmed

unconfirmed

We think that ...

affirmed

unconfirmed

We think that ...

affirmed

unconfirmed

We think that ...

affirmed

unconfirmed

We think that ...

affirmed

unconfirmed

We think that ...

affirmed

unconfirmed

We think that ...

Performing the tests

Customer talk

Notes:

Learnings:

Prototype testing Observation Other

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Evaluation of the tests 

& Learnings

affirmed

unconfirmed

Hypothesis

We found out that ...

That is why we have decided to ...

Customer talk

Notes:

Learnings:

Prototype testing Observation Other

Innovation Paper

Agile innovation

management

Do you have any questions? Talk to

our expert: 

Franz EMPRECHTINGER

Head of Innovation

+43 1 929 40 38 16

emprechtinger@lead-innovation.com

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