Book Review: The Heart of Innovation

Innovation has always felt like a buzzword to me, but this book gives the first definition that feels tractable. I took some time to try and write a condensed summary of my takeaways, hopefully they are useful to others.

The core idea is that innovation requires that you find authentic demand.
Authentic demand requires three things:

1. A situation where a particular person has to do something.
2. An aspect of that situation where that person wouldn't not do something.
3. A mutually beneficial way for you to help them not do that thing in that situation.
   The main purpose of the book is to help you identify these three things.

The core technique is looking for non-indifference or strong emotions about some potential change to the situation you have in mind. Imagine I ask you "Would you like to try this recipe for dinner?" Indifference would sound like "Yeah, sure, why not." or "Depends on what it is."

If instead I ask "How about we don't eat dinner tonight?" you will probably no longer get indifference. Instead it would be confusion "Why would we do that?" or refusal "No, that's stupid."

This may be a poor example but it illustrates the second requirement well. People don't not eat dinner. They may be indifferent to what they eat but you will see the non-indifference once you push the situation out of their normal frame.

It also illustrates the difficulty that you will have capitalizing on this and why the third requirement is needed. In this situation, to find the authentic demand you would need a way to place yourself in the path of non-indifference. You might have a great pre-made meal that is healthy and delicious, but like the recipe above, you will probably hit indifference. Instead, you probably need to look for people in situations where they may usually skip dinner (working late, traveling, new parents) and making it easy for them to buy and eat a good meal.

The first two chapters and the last few chapters seemed to be the most useful to me, though I do think the cases presented in the middle chapters are worth studying too. The process they lay out in the end involves two things:

1. Making situation diagrams. This just involves taking a situation and dissecting it for its objective components without putting judgement on it. You are looking for these four things:
   1. Actions: what is the person actually doing in this situation?
   2. Relationships: who are they interacting with in this situation?
   3. Equipment/resources: what things do they need to do this?
   4. Channels: what pathway connects people and/or equipment to enable the situation?
2. Performing "Documented Primary Interactions" (they call them DPIs) which are interviews with the people who you suspect are directly involved in the situation that concerns you. These are planned, recorded, and reviewed. The goal is to find the three requirements for authentic demand above.

These two things provide a reliable system for making predictions upfront (situation diagrams) and then testing these predictions against reality (DPIs). After reading this, the real value of this approach is that it helps you iterate in multiple directions.

• You can iterate on your offer/product to tailor it more to the real, specific situation that people tell you about in the DPIs.
• You can iterate on the frame with which to present your offering so that it is not met with indifference. This frame is probably the most important thing because if you can find the language that reliably evokes non-indifference in people, you know have the language you can use in your marketing and sales processes. You may not have to change the product at all as long as you can find non-indifference.

I am very excited to test these ideas out, and the book helps by setting clear expectations around how much work this whole process will take. They say it will typically take 200-400 DPIs to find authentic demand. They also gives benchmarks that a founder should expect to work up to around 20 DPIs per week and expect to take 3-6 months to do this whole process.

I think the whole book is worth a read to get the specific illustrative cases they bring up.