incremental innovations

there is a difference between incremental innovations and radical innovations. for an individual entrepreneur, incremental innovations may mean something simple like a better way to operate a business or a better way of producing a product. these are often seen as positive developments because they improve on what was already available in the market. on the other hand, radical innovations can offer completely new methods of doing things.

in order to differentiate one type of innovation from another, we have to look at all the four types of innovation as they pertain to the real world. 

most products involve either physical products or intangible services like digital services that satisfy customer demand and are therefore acquired by the consumer. a physical product that is used in a single transaction usually has no further opportunities to be improved on unless it is altered or customized. therefore, if a manufacturer wants to come up with a better mousetrap, it does not make sense for him to try to invent a better mousetrap; instead, he will probably look to improve on what he already has.

on the other hand, radical innovations are usually started by someone who is aware of a missing link in the current s-curve. for example, the current s-curve of online shopping contains about seven different platforms. however, the lack of platform diversity creates significant inefficiencies within the supply chain. as a result, an entrepreneur may come up with an idea to change this by creating a new platform or even improving on one of the existing platforms. all this is done using incremental innovation--innovations that are the building blocks of the new generation of internet business models.

back-end product development processes also create opportunities for incremental innovation because the innovations required to support the back-end ideas can be brought forward as well. however, this does not mean that the original idea is sacrificed in favor of the new idea. the key here is to understand that even the best-established markets have their share of stagnant or declining markets. in such cases, an entrepreneur needs to come up with fresh innovations to capture the market when it is on its rise and bring it down when it is declining.

however, before an entrepreneur can start off with the brainstorming session required to identify and capitalize on incremental innovations, he must first look at his product development budget. he should also look at the market that he is targeting. if he is targeting to enter a relatively new market segment, he will need to look at other competitors in that segment to look at their respective strategies and see how they have tackled those problems. a key advantage of an incremental innovation strategy is that it involves a minimal risk on the part of the innovator.

on the other hand, when it comes to tackling declining markets, radical innovations like disruptive innovation are more risky. this is because the targeted market is already shrinking. therefore, what an innovator needs is an innovative solution that can turn that shrinking market into a booming one. this requires a different set of skills like market thinking and technology innovation along with the financial backing.