In Monetizing Innovation: How Smart Companies Design the Product Around the Price , Madhavan Ramanujam and Georg Tacke assert: “The most successful product innovators we know start by determining what the customer values [verb] and what they are willing to pay, and then they design the products around those inputs and have a clear monetization strategy that they follow through with.” They reject a number of myths and misconceptions that, they claim, help to explain why so many innovations fail:

1. “If you simply build a great new product, customers will pay fair market value for it. ‘Build it and they will come’ is the mantra.”

2. “The new product or service must be controlled entirely by the innovation team working in isolation.”

3. “High failure rate of innovation rate is normal and is even necessary.”

4. “Customers must experience a new product before they can say how much they will pay for it.”

5. “Until the business knows precisely what it’s building, it cannot possibly assess what it is worth.”

As Ramanujam and Tacke would presumably agree, there are exceptions. Moreover, Steve Jobs has been perhaps the most outspoken among those who believe that most (if not all five) of these myths and misconceptions are, in fact, true; especially the first two.

With regard to #3, most experts seem to agree that a high number of low-risk experiments (using prototypes) rather than a high failure rate is desirable. The mantra “fail fast” should be subject to reasonable limitations. If DOA, bury it.

The wisdom of the Lakota advises against feeding a dead horse.

Monetizing Innovation was published by John Wiley & Sons (May 2016).