The Innovation Fallacy: Understanding When Startups Shouldn’t Innovate.

There is a proven formula for successful startups: identify a niche, offer something better than existing providers, and communicate your differentiation to the people who care enough to pay you.

Within this formula, founders must choose where to be innovative and where it makes more sense to follow the well worn path. Choosing to unnecessarily innovate will waste precious time on features that add no value. Choosing the wrong things to innovate will leave you without any appealing differentiation. The key is to innovate only where it adds value for customers.

When we launched OpinionX in late 2020, we made a mistake. We convinced ourselves that we needed to design our own onboarding experience because our survey format was very different to existing tools. After weeks spent designing multiple onboarding pages and rewriting the text for every paragraph and button, drop-off was still stubbornly high. We set up usability tests and watched as people got lost and confused along the way.

The key realisation for us was that - despite our unique survey format - our users still considered OpinionX a survey tool. People have been building survey tools for decades and there are established norms that users expect, especially in onboarding. After replacing our custom onboarding for a standard version used by industry leaders, onboarding success improved dramatically.

Understanding which part of your product mix will be your point of differentiation helps you to understand which areas to copy, like dashboards, acquisition channels and landing page structure (landing page structure should almost always be familiar to visitors). Like survey onboarding, these are user experience challenges that other people have been working on for years. Therefore the problem you are trying to solve within these builds likely has a better quality solution that’s been refined through multiple cycles of iteration.

Choosing to innovate multiple parts of your product wastes precious time as a startup and risks implementing a confusing user experience that will take weeks to optimize. However, there is an even riskier alternative; picking the wrong innovation as your main point of differentiation.

For example, a new search engine with customisable background colours is unlikely to be something that many people care enough about to pay for. A faster search engine that puts less strain on your device's memory, like that of startup Mighty, is something that many people care about and are willing to pay considerable money to have.

A good framework to identify which ingredient in a startup recipe should be the point of differentiation is to find the problem that customers care most about solving - otherwise known as Customer Problem Stack Ranking. Changing the colour scheme of Chrome is a mild inconvenience but your laptop freezing during an important presentation is a burning problem. Understanding the relative importance of these two problems is what determines successful product strategy of a company like Mighty.

With this point of differentiation solidified, companies like Mighty use the same landing page format, billing flow and Notion hiring board template as every other startup. Not because they want to copy others — they're just too busy focusing the spotlight on the things they uniquely do best.

Now we want to help you understand your customer’s problems so that you can understand your unique point of differentiation. It only takes a few minutes to set up a free Customer Problem Stack Rank on OpinionX. If you want some help, request a free call so that we can make sure that you get set up properly and answer any questions you have.

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