TESTING AN INNOVATION'S FEASIBILITY PROJECT

Learning Outcome:In this project, you will demonstrate your understanding of feasibility considerations necessary to launch and carry out an innovative initiative. You'll demonstrate this competence by building your own personal innovation feasibility tool and applying it to a selected innovation.

Guidance: Your analysis will assess the technical, customer/user, economic, and competitive feasibility of a specific innovation in a selected business. You may select an innovative business of your own choosing. For your selected business or organization (and an identifiable innovation in that business), explain the key feasibility considerations that would be important for a venture team (or a top management team) to consider before launching the innovation. Some of the categories for your evaluation criteria would include technology (stability, simplicity, etc.); economics (profitability, scalability, fit with venture mission, value chain dependence, etc.); or marketplace acceptance (novelty, usability, differentiation, accessibility, etc.), among others you may choose to include for the innovation you'll analyze.

Advice: You may select an existing innovation or you may select a potential (or hypothetical) innovation and test with the feasibility tool you create. Factors to consider in your evaluation tool can be drawn from the resource materials in this course. Drawing upon the criteria in the Merrifield article in the resources for this module will be helpful.

Selected examples of parts of the Innovation Feasibility assignment: mentions that markups in this industry can range between 40-50% and are even higher after a mattress crosses the $1,000 mark (Dholakia, 2015). The Innovation and its Business Background / Challenges Casper, the online bed-in-a box maker launched in April 2014. The New York City As previously mentioned I had a good background in the oil and gas industry having worked business had a simple concept "produce the best mattress possible at an affordable price, sell a alongside some of the smartest people in the business and by leveraging this access to my own single model, and deliver it quickly, for free, with a 100-day trial period" (Welch). Their concept company I was able to incorporate this model of looking for innovative products and services worked so well that in their first month they made $1 million dollars in sales (Welch). In their to improve existing processes. There was an opportunity and a niche in the industry and one first year, they made $100 million in revenue (Upson, 2017). Presently, they have expanded particular area of interest to improve on was Amine filtration. internationally, entering in Canada, Germany, Austria, Switzerland, and the U.K (Ringen, 2017). To facilitate and develop an innovative solution required collaboration with suppliers and Since their launch, Casper has released several different products from bed sheets to customers around a common goal and pain point. We found this pain point with one of our pillows and most recently dog mattresses. Their mission is to "make sleep a lifestyle and build existing customers who were experiencing lost gas production and the incurred expenses that sleep environments that become part of [one's] life" (Bertoni, 2016). They do this by spending were associated with this reduced processing capability. We traced this to using the existing "a lot of money on a great product development team" (Bertoni, 2016). inefficient bag filters and the buildup of contaminants in the amine system. The Casper, their most popular mattress, took 9 months of pure research and idea Of course to get acceptance to trial our new filter innovation would be a challenge as there building. After their research, it took 3,240 hours of testing and 108 prototypes developed to are many levels of hierarchy that have to be convinced that we have a "better mousetrap" and finally have a product (Designing the Casper). They expanded quickly through viral videos skepticism is always in the forefront when something new is being proposed. You have to get of customers happily unwrapping their mattresses from a box. Casper cut overhead cost by buy in from procurement, operations and maintenance, engineering, safety, upper management conducting all its business online. Furthermore, they cut cost by compressing the mattresses to name a few and this can be a daunting task at the best of times. which allowed them to deliver via UPS at a 10th of what would have costed them to deliver an uncompressed mattress (Welch). Finally, they cater to their customers by sending anniversary This was something our innovative group had to overcome but was not insurmountable as we gifts, dog beds, and inviting their customers to come to events and test prototypes (Welch). had the benefit of core competence with "high quality of the collective learning and knowledge- base within the firm and ability to coordinate diverse skills and integrate multiple streams of The Innovation's Marketplace Context technology." (2) An irony was that the oil company would probably be seen as "Mechanistic" The mattress industry is a $14 billion industry; Casper and other similar rivals account in structure and ourselves as "Organic" based on our organizational differences. (6) We were for about 2% or $300 million dollars of industry sales (Gottfried, 2016). Every 10-15 years, however able to leverage our competence and experience to build customer trust that we had consumers buy a new mattress (Dholakia, 2015). According to IBIS World, the largest their interests as the basis of our goal in the developing of this prototype innovation. competitor is Mattress Firm which accounts for 27.1% of the market share followed by Select Criteria for Innovation Evaluation Comfort Corporation at 8.5% (Palmer, 2016). There are a total of 12, 175 businesses and annual growth is expected to rise at 3.2% between 2016-2021 (Palmer, 2016). Consumer Reports 1. Improve Process Operations (Less Labor Maintenance)2. Reduce Filtration Costs A simple app that caters for user login, picture uploads, request distribution, payment facilitation 3. Reduce Mechanical Costs Production time and notifications should take between a month and 6 months to implement depending on resource 5 availability. This is a considerably low production time and would elicit a high score of around 4. 4. Improve Plant Throughput (Increased Gas Sales Revenue-Finished Product) Having searched through patent databases and trawled the web for existing companies providing 5. Extraneous Variables (Reduced Chemical Costs-Less Replacement Solvent Costs) similar offerings, I have not encountered any legal mandates that would prohibit the launch of the business. One regulatory consideration is that any business selling edible items to the public is 6. Less Disposal Costs (Used Product Disposal) Legal concerns 10 required to undergo a health inspection and obtain a health certificate. (Entrepreneur, 2016) This 7. Improved Safety will need to be enforced and verified when bakers sign up to the app. The app would get a score of 8. The market for baked goods is large and steady. (Palmer, 2017) Reality baking shows and a. Criteria #3- Simplicity Target market size Pinterest has lead to increasing popularity in custom cakes. (The Chef (UpServe), 2012) On the 10 and stability other side of the spectrum, the health conscious have created a rising demand for low carb and 1. When evaluating this innovation, one of criteria's that I believe to be highly important is low calorie baked goods. (Palmer, 2017) I would score this at an 8 the simplicity of this technology. In a "2012 poll, the Consumer Electronics Association By designing a user-friendly app and employing UX design principles, we should be able to create Usability an easy to use order management experience for both the customer and the baker. By making it 10 discovered that 87% of people said ease of use is the most important thing when it comes available on smartphones, it should be easily accessible to all and simple to use. Score: 8. to new technologies" (Tischler, 2017). The app will provide a new and modern way of ordering baked goods. By utilizing familiar and 2. In another study conducted by Harvard, Patrick Spenner and Karen Freeman found that Novelty popular concepts such as social media and Pinterest, we will be able to offer the user a unique 5 method of ordering cakes with the reward being elimination of the quote finding hassle and the what made consumers "sticky -that is, likely to follow through on an intended purchase, receipt of delicious baked items. Score: 3 To set up this app, for me personally will require minimal capital investment for hosting buy the product repeatedly, and recommend it to others", was "decision simplicity" Capital Outlay fees, maybe licensing fees, and my own time investment. This is because I have development 10 (Spenner, 2014). The study found that "the easier a brand makes the purchase-decision experience. To outsource the development may require slightly more capital outlay, but of a moderate quantity. I would rate this a 6 journey, the higher its decision-simplicity score" (Spenner, 2014). Thus, the higher To make money from this innovation, we would charge a small service fee or take a minimal 5- amount sales, repeat business, and recommendation to others. 10% commission on sales. Since the expenses to run the app are low, we should be able to break Profitability even within the first 20-30 sales in a month, using an estimate of R400 per sale. This scores a 7 10 3. This is extremely important because unlike a purchase made at a brick-and-mortar, e- in profitability - it will be profitable but the scale of profit will be determined by the number of commerce sites cannot persuade the consumer or justify why a certain purchase is best sales Scalability The innovation offers a range of up-scaling opportunities, such as expanding globally, offering to made there. Instead, they have one opportunity and that is why it is important that the 5 other food products, offering catering services, etc. It would score a 4 for scalability. site is simple and easy to navigate through. External Logistical The innovation has one external logistical dependency and that will be the ability to partner with 10 4. Lastly, I would say that the product itself should be simple to understand. This goes hand dependencies Uber/Taxify for deliveries. This is not critical to the core deliverable however, so I would score this at an 8. in hand with product differentiation. Fortunately for software solutions today, maintainability has been made simple and fixes can be Maintainability implemented with little to no downtime. Updates can be rolled out as often as necessary and code 5 changes are not complex to implement. Score: 5 The bakery landscape is characterized mostly by local bakeries. By using these bakeries in the business model, we actually reduce the competitive impact of consumers choosing to buy from Feasibility Evaluation of the Custom Baked Goods Mobile App Competitive businesses they are already loyal to. We simply provide an alternative and more convenient channel for doing so. From a baker perspective, companies such as Candywasted and NetFlorist 10 Landscape Custom Baked Goods Mobile App do recruit bakers to bake on their behalf, but for a baker wishing to establish their own brand, the Innovation Feasibility Applicability to this Innovation app would be the preferable option. Score: 8 Weighting Total Weighting of all Criteria: 100% Criteria Technical The mobile app will be a moderately complex item to implement. For experienced developers complexity it would be simple, for novices it would be slightly more challenging but do-able using the 10 abundance of tutorials available online. I would score this at a 7. End of document