What Is Innovation? And 61 More Terms, Defined & Explained.

What counts as Adjacent Innovation?

Adjacent innovation is how a company grows by extending what it already does well into new markets, customer segments, or use cases — without abandoning the core business.

Innovation that leverages the core business and its existing capabilities to expand into new markets, customer segments, or value propositions. Adjacent innovation sits between incremental improvements and radical breakthroughs — extending what works into new territory.

Related: Three Horizons of Growth · Covered in Innovation Mode 2.0, Chapter 1

What is Agile Engineering?

Agile engineering is software development built around short cycles, real user feedback, and the assumption that you'll learn faster by shipping than by planning.

Software development practices and methods that embrace change, engage with customers early, and deliver incremental value frequently. Characterized by fast iterations, user feedback loops, continuous learning, and improvement.

Related: Rapid Prototyping for Engineering Teams · User Stories in Agile

What is AI Readiness?

AI readiness is the honest answer to a single question: can this organisation actually run AI in production, or just talk about it? It is the prerequisite for any credible AI strategy.

An organization's preparedness to adopt and scale AI across its operations — measured across data maturity, talent, infrastructure, tooling, and leadership alignment. AI readiness is the essential first step in any AI strategy; without it, AI initiatives produce pilots that never reach production.

Covered in the AI Strategy Advisory program · Innovation Mode 2.0, Chapters 4 & 6 · Data & AI Innovation Hub

What is an AI Strategy?

An AI strategy is a structured plan defining where AI will create real competitive advantage — which use cases to pursue first, and how to move from pilot to production without stalling. It begins with an honest AI readiness assessment. The AI Strategy Advisory is built to produce one — prioritised use case portfolio, AI product concepts, and a phased roadmap.

A structured plan that defines where AI creates competitive advantage for an organization, which use cases to pursue first, and how to move from pilot to production. A credible AI strategy starts with an honest readiness assessment and ends with a phased implementation roadmap — not a slide deck listing technologies.

Related: AI Strategy Advisory — 10-step methodology · How to Transform a Company into an AI-Powered Organization · 2026 Innovation Trends · AI Agents That Shop For You · Data & AI Innovation Hub

What is Blue Ocean Strategy?

Blue Ocean Strategy is the idea that the smartest competitive move is to avoid competition entirely — by creating uncontested market space rather than fighting for share in a crowded one.

A business theory that suggests companies are better off searching for ways to gain uncontested market space rather than competing head-to-head with similar companies. The term contrasts with "red oceans" where competitors fight over shrinking profits.

What is Business Model Innovation?

Business model innovation is changing how a company creates and captures value — not what it sells, but the logic underneath: pricing, packaging, who pays, who delivers.

A business model is the set of elements and mechanisms that allow a company to pursue its overall purpose — offerings, value proposition, cost structures, pricing, and monetization models. Introducing new logic to any of these components constitutes business model innovation.

Related: Wikipedia: Business Model

What is a Business Experiment?

A business experiment is a structured way to test whether an idea works in the real world — with real users, in real conditions, generating real evidence rather than opinions. We publish a free template you can adapt to your context.

The practice of testing hypotheses by obtaining insights and signals under real-world conditions. Business experiments involve actual customers interacting with realistic prototypes in real market conditions — capturing both implicit data (telemetry, interaction patterns) and explicit data (direct feedback, surveys). The objective is to draw evidence-based conclusions and inform related decisions.

Definition: The Innovation Mode · Covered in depth in Chapter 7 (Opportunity Validation) · Related: The Problem Statement Template

What is Centralized Innovation, and how is it different from decentralised?

Centralised innovation is when a single team owns the innovation agenda — setting direction, controlling resources, and deciding what gets built. It offers coherence but can become a bottleneck. The opposite of decentralised innovation.

An innovation model in which the agenda and outputs of innovation are controlled by a single entity within the organization. Offers coherence and strategic alignment but risks bottlenecking ideation.

What does a Chief Innovation Officer do?

A Chief Innovation Officer is the senior executive responsible for making innovation happen — setting strategy, building culture, and delivering measurable results, not running workshops. Available as a fractional engagement when a full hire isn't the right move.

A senior executive responsible for managing the organization's innovation function — setting innovation strategy, building innovation culture, managing the innovation portfolio, and delivering measurable results. The role varies widely across industries; some organizations use the title formally, others distribute the function across leadership.

Related: Who Should Lead Corporate Innovation? · CInO Mission & Responsibilities · Skills & Talents · How to Become a CInO · The Evolving Importance of the CInO · How to Select a CInO · CInO as a Service

What is Decentralized Innovation, and how is it different from centralised?

Decentralised innovation is when ideas can originate anywhere in the organisation — every team, every business unit, every function — rather than being routed through a single innovation hub. Sits opposite centralised innovation; the practical hybrid is federated.

An innovation model in which innovation can originate from any team within the organization. Knowledge is diffused across the company, enabling broader participation but requiring stronger coordination.

What is Design Thinking?

Design thinking is a way of solving problems by starting with the people who have them — observing real needs, generating ideas in response, prototyping fast, and testing with users before committing. See the Design Sprint Guide for a structured five-day implementation.

A human-centered approach to innovation that integrates the needs of people, the possibilities of technology, and the requirements for business success. Emphasizes empathy, ideation, prototyping, and iterative testing.

Related: Solving Complex Problems Like Innovation · Design Thinking Grows Up · Design Sprints: Risks & Success Factors

What is Digital Transformation?

Digital transformation is the integration of digital technology into every part of a business — but the real shift is cultural: how people work, decide, and adapt to change.

The integration of digital technology into all areas of a business, fundamentally changing how it operates and delivers value. It is also a cultural shift — requiring organizations to continually challenge the status quo and experiment.

Related: Digital Transformation, Explained · Digital Transformation or Digital Fluency?

What is Disruptive Innovation, and how is it different from sustaining?

Disruptive innovation is when a simpler, cheaper solution takes root at the bottom of a market, then moves upmarket over time — eventually displacing the incumbents who dismissed it. The opposite pattern is sustaining innovation.

A process by which a product or service takes root in simple applications at the bottom of a market — typically by being less expensive and more accessible — then relentlessly moves upmarket, eventually displacing established competitors.

Source: Clayton Christensen, Christensen Institute

What does Experimentation mean in business?

Experimentation in business is the discipline of testing hypotheses with real evidence rather than betting on opinions — and treating failure as data, not career risk.

A business attitude that promotes hypothesis testing and learning through experiments and feedback loops. Requires technology, culture, and a mindset that treats failure as a learning opportunity — not a career risk.

Definition: The Innovation Mode

What is Fail-Safe, Fail Fast?

Fail-safe, fail fast is the discipline of bringing bad news forward — surfacing what isn't working early enough that you can still act on it, before resources, expectations, and dependencies pile up.

An approach in product development that encourages experimentation by bringing decisions early: an unsuccessful result is accepted as soon as it happens early enough (fail fast), before significant resource allocation and before dependencies or expectations are created (fail-safe).

Definition: The Innovation Mode

What is Federated Innovation?

Federated innovation is the hybrid model — a network of semi-autonomous innovation cores across the organisation, each operating independently but sharing common methods, language, and tools.

An innovation model based on a network of "innovation cores" established across the organization, which operate independently while orchestrated by an overall innovation program. The power of this model lies in adopting a consistent basis — innovation language, methods, and tools — across all cores. Combines the centralized model's strategic alignment with the decentralized model's local relevance and inclusiveness.

Covered in Innovation Mode 2.0, Chapter 1 (section 1.6.3)

What is a Go-to-Market Strategy?

A go-to-market strategy is the plan for actually getting a product into the world — who it's for, how you'll reach them, what you'll charge, and in what order you'll do everything.

The plan for launching a product or service into a market — covering target customer definition, positioning, pricing, channels, and the sequence of actions required to drive adoption. A GTM strategy bridges the gap between product development and market traction.

What is a Hackathon?

A hackathon is a short, intensive event — usually 24 to 72 hours — where cross-functional teams turn ideas into working prototypes under real time pressure. Done well, it produces validated prototypes, internal champions, and a measurable shift in innovation culture. See the full framework for the five-phase lifecycle, design parameters, and scoring models — or get the deployable system in the Hackathon Toolkit.

An intensive, software-centric ideation, prototyping, and presentation challenge on known or unknown problems or opportunities. Hackathons bring together cross-functional teams to collaborate intensively and produce working prototypes under time pressure. The book defines four phases — Design Time, Lead Time, Runtime, and Pitch Time — and covers the AI-powered hackathon as a new format.

Related: Corporate Hackathons in the AI Era · How to Run a Successful Corporate Hackathon · 50+ Hackathon Ideas That Work · How to Win a Hackathon · Brainstorming Workshop Tools · Wikipedia

What is the difference between Invention and innovation?

Invention is a novel, workable idea — proven on paper or in a lab. Innovation is what happens when that idea actually reaches users and creates value. The two are routinely confused.

An idea or solution to a problem that is novel and proven workable — without necessarily being implemented. It may be a detailed, validated technical description of a new, non-obvious way to achieve a goal. The key requirement: it must be "something that has never been made before." Unlike innovation, inventions may occur independently of production or commercialization plans.

Covered in Innovation Mode 2.0, Chapter 1 (section 1.2)

What is Ideation?

Ideation is the structured process of generating and capturing ideas as potential solutions to a problem — and the real work is in the framing of the problem, not the brainstorm itself. Formats like hackathons and design sprints exist to make ideation produce something usable. See the free Workshop Guide for facilitator patterns.

The process of generating, capturing, and post-processing ideas as potential solutions to a problem or opportunities for business value. Input is typically one or more problem statements along with business context that helps innovators frame the problem and get inspired.

Related: The Power of Ideas · Streamlining Ideation — the Idea Model · Idea Management: Key Principles · How to Build a Great Ideation Platform · The Business Idea Template

What counts as Incremental Innovation?

Incremental innovation is the steady improvement of existing products and services — small enhancements, new features, better performance, lower cost. It is the most common form of innovation in mature organisations, and often the most undervalued.

Innovation at a smaller scale — frequently on top of existing products or services. A continuous process of improving existing offerings, either by releasing enhanced versions of known features or by adding new ones. The most common form of innovation in mature organizations.

What counts as Progressive Innovation?

Progressive innovation sits between incremental and radical — it preserves the core architecture of an existing product but delivers a meaningful leap, often by recombining existing technologies in new ways.

Innovation that targets significant advancements while preserving the core architecture and structure of existing products. It often involves new applications or combinations of existing technologies that customers recognize as better and more innovative. Less disruptive than radical innovation but requiring significant investment beyond incremental product improvement cycles — typically powered by a dedicated product innovation team with increased autonomy.

Covered in Innovation Mode 2.0, Chapter 1 (section 1.6.2)

What is Innovation Culture?

Innovation culture is the collective mindset that decides what happens when someone proposes something new — whether it gets explored, dismissed, or quietly killed. Visible rituals like hackathons and demo days are the most reliable cultural signals — what an organisation actually celebrates.

A special, collective mindset that encourages the exploration of novel ways to improve business outcomes. It reflects how people perceive the innovation process and how they feel about it collectively — the dominant mindset, the general attitude toward change, and the willingness to try new things in order to serve the organizational purpose. Culture is the only innovation ingredient that cannot be acquired; it must be developed through inspiration and leadership.

Related: What a Great Innovation Culture Really Is · The Innovation Culture Defined · The Ingredients of Innovation Culture · How to Establish an Innovation Culture · Why Companies Fail to Foster It · Innovation Mode 2.0, Chapter 3

What is an Innovation Deficit?

An innovation deficit is a structural gap that stops an organisation from innovating effectively. Innovation Mode 2.0 identifies six — leadership, organisational design, capabilities, real-world connection, talent and culture, and venture building — and most companies suffer from three or more at once.

A structural gap or weakness that prevents an organization from innovating effectively. Innovation Mode 2.0 identifies six Innovation Deficits as a diagnostic framework: (1) Leadership Deficit, (2) Organizational Design Deficit, (3) Innovation Capabilities Deficit, (4) Real-World Connection Deficit, (5) Talent and Cultural Deficit, and (6) Venture Building Deficit. Most struggling organizations suffer from three or more simultaneously.

Covered in Innovation Mode 2.0, Chapter 2 · Related: Why Corporate Innovation Fails · The Challenges of Corporate Innovation

What is an Innovation Ecosystem?

An innovation ecosystem is the network of organisations, institutions, and individuals — corporates, startups, universities, investors, governments — that together create the conditions for innovation to happen at scale.

The interconnected network of organizations, institutions, and individuals that contribute to innovation — including corporates, startups, universities, investors, and government agencies. An effective innovation ecosystem creates conditions for knowledge exchange, collaboration, and commercialization across boundaries.

Related: Essential Digital Tools for Innovation

What does an Innovation Function do?

The innovation function is the always-on system inside a company that produces innovation — processes, tools, talent, and knowledge — rather than a one-off project, an annual event, or someone's job description.

An always-on system of processes, services, technology tools, knowledge, and talent — aiming to maximize the ability of the organization to discover and pursue opportunities. Beyond opportunities, the innovation function produces, accumulates, and diffuses knowledge and innovation assets throughout the organization.

Definition: The Innovation Mode · Chapter 4 · Related: The Innovation Dream Team · The Innovation Tech Stack · Corporate Innovation Hub

How does an Innovation Funnel work?

The innovation funnel is the structured pipeline that takes raw ideas through screening, validation, and refinement — narrowing at each stage until only the strongest opportunities advance. Hackathons are a common way to feed the top of the funnel with validated prototypes rather than slides.

The structured process through which ideas are captured, screened, evaluated, and progressively refined into viable innovation opportunities. The funnel narrows at each stage — from broad ideation to focused prototyping and validation — with decision gates that determine what advances.

Related: Innovation Portfolio

What is an Innovation Lab?

An innovation lab is a dedicated space — physical, organisational, or both — where teams can experiment outside the constraints of day-to-day operations. It works when paired with a real connection back to the core business; without that, it becomes innovation theatre. For the physical-prototype variant, see the Makerspace Guide.

A dedicated space or organizational unit designed to foster experimentation and develop new ideas outside the constraints of day-to-day operations. Labs typically focus on exploring emerging technologies and business models.

Related: 25 Digital Tools to Accelerate Innovation

What is the Innovation Masterplan?

The Innovation Masterplan is a sequenced roadmap of interventions designed to build or rebuild an organisation's innovation capability — 70+ moves organised across six transformation phases, calibrated to the organisation's current maturity level.

A sequenced, actionable roadmap of interventions designed to build or transform an organization's innovation capability. The Innovation Mode framework defines 70+ interventions organized across six transformation phases — Power-Up (→ Level 2), Spark (→ Level 3), Connect (→ Level 4), Empower (→ Level 5), Scale-Up (→ Level 6), and Embed (→ Level 7, the Innovation Mode).

Covered in Innovation Mode 2.0, Chapter 10 · Delivered through the Innovation Advisory

What is the Innovation Maturity Index?

The Innovation Maturity Index is a seven-level diagnostic that measures how deeply innovation is embedded in an organisation — from Level 1 (talk, no action) to Level 7 (innovation is how the company operates). See the full framework for level definitions and assessment criteria.

A 7-level diagnostic scale that measures an organization's innovation capability — from Level 1 (Inactive) to Level 7 (Native). At Levels 1–3, leadership talks innovation but doesn't operationalize it. Levels 4–5 introduce dedicated teams and measurement — most companies plateau here. At Level 6, AI augments every stage. At Level 7, innovation is indistinguishable from how the company operates.

Covered in Innovation Mode 2.0, Chapter 2 (section 2.3)

What are Innovation Metrics?

Innovation metrics are the measures that show whether an innovation function is producing real capability — pipeline velocity, time-to-validation, conversion rates, business impact — not how many ideas were submitted last quarter. The Innovation Performance Framework defines them as a system, not a wish list. For measuring innovation events specifically, see the Hackathon Scorecard.

Quantitative and qualitative measures used to track the performance of an organization's innovation function. Effective innovation metrics go beyond vanity indicators (number of ideas submitted) to measure real capability: pipeline velocity, conversion rates, time-to-validation, and business impact of launched innovations.

Covered in Innovation Mode 2.0, Chapter 9

What is the Innovation Mode?

The Innovation Mode is the state where innovation has become organic — fully embedded in how the company operates, no longer a programme or department but the operating system itself. It is Level 7 of the Innovation Maturity Index.

The ultimate state where innovation happens organically. Innovation techniques, methods, and processes are fully embedded and adopted as part of the organization's operational core. Innovation is no longer a distinguishable program or activity — it is seamlessly integrated into essential business processes. Getting to the Innovation Mode requires both intelligent design and evolution: initially architected into the organizational design, it then evolves naturally through fast adaptation and learning loops.

Definition: The Innovation Mode

What is an Innovation Opportunity?

An innovation opportunity is a validated, well-defined, novel solution that is technically feasible, economically viable, and impactful enough to matter — anything short of that is just an idea waiting for evidence. The free Business Idea Template is the standard format for capturing an early-stage opportunity.

A well-defined, validated, novel solution that is estimated to be technically feasible, economically viable, and impactful for a critical mass of users. This definition allows non-implemented, early solutions to qualify as innovation — enabling experts to assess concepts through the lens of innovation and evaluate their potential.

Definition: The Innovation Mode · Related: The Product Concept Template

What is an Innovation Playbook?

An innovation playbook is your organisation's operating manual for innovation — definitions, methods, decision rules, templates, and shared language, all in one branded document that the whole company can actually use. The Innovation Advisory programme delivers one custom to your organisation.

Your organization's definitive manual on "how to innovate." As described in Innovation Mode 2.0: a branded strategic document providing a comprehensive guide containing all essential elements needed to drive innovation — from foundational definitions and methods to practical resources, tools, and templates. It maps problem and opportunity spaces, details decision processes, and establishes the shared innovation language that enables the entire organization to engage.

Delivered as a core output of the Innovation Advisory program

What is an Innovation Portfolio?

An innovation portfolio is the managed collection of innovation initiatives an organisation is running. The point of treating it as a portfolio is to balance risk, time horizons, and ambition — rather than concentrating every bet in one zone.

The managed collection of innovation initiatives an organization pursues — balanced across risk levels, time horizons, and innovation types. Effective portfolio management ensures the organization invests across incremental, adjacent, and transformational innovation rather than concentrating resources in one zone.

What is an Innovation Strategy?

An innovation strategy is the plan that defines how innovation will serve the business — where you'll focus, how much you'll invest, and what kinds of innovation you're willing to pursue. The Innovation Advisory programme produces one as a board-ready document in 8 weeks.

A plan that defines how an organization will use innovation to achieve its business objectives. Includes decisions about where to focus innovation efforts, how much to invest, and what types of innovation to pursue.

What is Intrapreneurship?

Intrapreneurship is what happens when someone acts like an entrepreneur from inside a large organisation — owning the outcome, taking real risks, building something that didn't exist before, usually with the company's resources behind them. Many intrapreneurs first surface in hackathons, where the format compresses what would otherwise take months into a weekend.

The act of behaving like an entrepreneur while working within a large organization. Intrapreneurs take hands-on responsibility for creating innovation, often with dedicated resources and executive sponsorship.

What is the Jobs to Be Done framework?

Jobs to Be Done is a framework for understanding what customers are actually trying to accomplish — the progress they're seeking — rather than describing them by demographics or product features.

A framework for understanding customer needs by identifying the "job" a customer is trying to accomplish — the progress they seek in a specific circumstance. JTBD shifts product thinking from features and demographics to outcomes and motivations, revealing why customers switch between solutions.

Popularized by Clayton Christensen, Tony Ulwick, and Bob Moesta

What is the Lean Startup methodology?

Lean Startup is a methodology for building products in tight cycles — hypothesis, experiment, validated learning, repeat — designed to shorten the time it takes to find out whether an idea actually works.

A methodology for developing businesses and products that shortens development cycles by combining hypothesis-driven experimentation, iterative product releases, and validated learning. Build, measure, learn — in tight cycles.

Related: Startup Innovation Hub

What counts as Marketing Innovation?

Marketing innovation is a significant change in how a product is designed, packaged, placed, priced, or promoted. It is not a clever campaign — it is a new method of presenting commercial offerings, large enough to open new markets or reposition existing ones.

The implementation of a new marketing method involving significant changes in product design or packaging, product placement, product promotion, or pricing. The purpose is to present commercial offerings in a better way — opening new markets, positioning products more effectively, and driving sales and growth. To qualify, the method must be new and represent a significant departure from existing marketing approaches.

Definition: OECD · Covered in Innovation Mode 2.0, Chapter 1 (section 1.6.1)

What is an MVP?

An MVP — Minimum Viable Product — is the simplest version of a product you can put in front of real users to find out whether the idea is worth building further. Different from a prototype (built to learn internally) and a proof of concept (built to prove technical feasibility).

The version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least effort. A product with just enough features to satisfy early customers and provide feedback for future development.

Covered in depth in Innovation Mode 2.0, Chapter 8 (Opportunity Realization) · Term coined by Frank Robinson; popularized by Steve Blank and Eric Ries · Wikipedia · Related: The MVP Explained · MVP FAQs for Startups · The MVP Recipe · Prototype vs MVP vs POC

What does Novelty mean in innovation?

Novelty is the quality of being new — but in innovation, what matters is how new: new to the world, new to the industry, new to the company, or new to the product. The level you choose to operate at signals how ambitious your innovation portfolio really is.

The state or quality of being novel, new, or unique. Essential for innovation — the verb "innovate" itself means to introduce new methods, ideas, or products. The book defines four levels: New to the World, New to the Industry, New to the Company, and New to the Product. Tracking novelty helps identify patent opportunities and balance innovation portfolios.

Covered in Innovation Mode 2.0, Chapter 1 (section 1.1) · Related: Defining Novelty and Innovation

What counts as Organizational Innovation?

Organisational innovation is innovation aimed at the company itself — new ways of operating, communicating, structuring teams, or making decisions — rather than at the products or services it sells.

Innovation that targets the organization itself — introducing changes in how the company operates, communicates, and makes decisions. May refer to new means of organizing work, executing and measuring progress, or new patterns of collaboration. Examples include new processes for sharing information, connected-building experiences, or AI-powered systems that diffuse knowledge across the enterprise.

Covered in Innovation Mode 2.0, Chapter 1 (section 1.6.1)

What is Open Innovation?

Open innovation is the model where a company deliberately uses external knowledge — partners, startups, universities, customers — as part of its own innovation process, rather than relying only on what's invented in-house.

A model enabling companies to utilize both internal and external knowledge as part of their innovation process. Allows economic entities to connect, selectively exchange knowledge, form partnerships, and accelerate the innovation process in ways that create mutual benefit.

Related: Open Innovation & Ideation Powered by Blockchain

What is Opportunity Discovery?

Opportunity discovery is the structured process of finding innovation opportunities before they become obvious — through needs analysis, market scanning, competitive intelligence, and increasingly, AI agents that surface ranked opportunities autonomously. We publish a free Problem Statement Template for the framing step.

The systematic process of identifying innovation opportunities through needs analysis, market scanning, idea assessment, and competitive intelligence. The book introduces a novel AI-powered setup where AI proactively and autonomously discovers opportunities in the organization's context — scanning patents, research, competitor filings, and consumer sentiment to synthesize ranked business opportunities without prompting.

Covered in Innovation Mode 2.0, Chapter 6

What is Opportunity Validation?

Opportunity validation is the structured process of testing an innovation opportunity against feasibility, viability, desirability, and strategic fit — before committing real resources to building it.

The structured process of testing an innovation opportunity against multiple dimensions — feasibility, viability, desirability, and strategic fit — before committing to full development. Validation transforms assumptions into evidence and reduces the risk of building the wrong product.

Covered in Innovation Mode 2.0, Chapter 7 · Ainna.ai automates multi-dimensional scoring

What does it mean to Pivot a startup?

A pivot is a deliberate change in direction based on what you've actually learned — not abandonment, not motion for its own sake, but a structured response to evidence that the current plan isn't working.

A structured course correction designed to test a new fundamental hypothesis about the product, strategy, or engine of growth. Pivots are common in startups when initial assumptions prove incorrect.

What counts as Process Innovation?

Process innovation is a significantly improved way of producing or delivering something — new techniques, new equipment, new software — focused on how things get done, not what gets done.

A new or significantly improved production or delivery method — including significant changes in techniques, equipment, and software. The focus is on how things are made or delivered, not what is made.

Definition: OECD Oslo Manual

What counts as Product Innovation?

Product innovation is a new or significantly improved good or service — better specifications, new components, improved usability, fundamentally different capabilities. The most visible kind of innovation, and often the most expensive. The Product Concept Template is the standard brief used by product teams to spec a new build.

A good or service that is new or significantly improved — including improvements in technical specifications, components, materials, software, user friendliness, or other functional characteristics.

Definition: OECD Oslo Manual · Related: Product Innovation Hub · Product Discovery Documentation

What is Product-Market Fit?

Product-market fit is the moment the market starts pulling the product out of you — organic growth, high retention, customers who'd be genuinely upset if you took the product away. It is the only thing that matters for an early-stage product.

The degree to which a product satisfies a strong market demand. Signs include organic growth, high retention, and customers who would be "very disappointed" if the product disappeared. Marc Andreessen described it as "the only thing that matters" for startups.

Related: Product Discovery Documentation · Startup Innovation Hub

What is the difference between a Prototype and an MVP?

A prototype is a deliberately incomplete version of a product, built to explore an idea, test an assumption, or learn something specific — without committing to building the whole thing. Most working prototypes inside a corporate setting get built in two places: dedicated product teams, and hackathons.

An intentionally incomplete instance of a product that can be used as a means of exploration, experimentation, and learning. The book distinguishes static prototypes (wireframes and mockups), functional prototypes (working but limited implementations for business experiments), proofs of concept (small-scale technical feasibility tests), and MVPs (market-ready first products). The goal: learn quickly and cheaply before committing to full development.

Related: Rapid Prototyping Practices · Software Prototyping: When, Why, and How · Prototype vs MVP vs POC

What is a Proof of Concept?

A proof of concept (POC) is the smallest possible demonstration that something can work — that a technology is feasible, a design is plausible, or a business idea is worth taking seriously. Smaller in scope than a prototype and far smaller than an MVP.

Evidence — typically derived from an experiment or pilot project — demonstrating that a design concept, business proposal, or technology is feasible. A POC is typically smaller in scope than a prototype or MVP.

Related: Prototype vs MVP vs POC

What counts as Radical Innovation?

Radical innovation is innovation that introduces a fundamentally new idea or technology — often replacing what came before, rather than improving on it. The opposite of incremental innovation, and far rarer than most companies admit.

Innovation that brings a major change in something established — usually as a breakthrough idea or technology. In some cases, it replaces existing solutions or technologies entirely. The opposite of incremental innovation.

What is Rapid Prototyping?

Rapid prototyping is the practice of building cheap, fast versions of a product or system — from static visualisations to clickable interfaces to functional artefacts — to learn before committing. Inside a hackathon, rapid prototyping is the entire point.

The process of building inexpensive instances of a product or system in a streamlined fashion, extremely fast. Prototypes may range from static visualizations and clickable interfaces to functional, usable artifacts.

Related: Software Prototyping: When, Why, and How

What is Scenario Planning?

Scenario planning is a structured way to prepare for multiple plausible futures — exploring how different forces might combine, and stress-testing strategy against each one rather than betting on a single forecast.

A structured method for exploring multiple plausible futures based on key uncertainties and driving forces. Rather than predicting a single outcome, scenario planning helps organizations prepare for a range of possibilities — stress-testing strategies against different conditions.

What counts as Social Innovation?

Social innovation is innovation focused on societal impact rather than commercial return — new approaches to education, health, community development, or working models, often driven by non-profits, activists, or self-organising communities.

Innovation that prioritizes impact and value at the societal level — focusing on improvements in working models, education, access to health services, and community development. May be driven by non-profits, activism, volunteers, or self-organizing communities.

Related: Social Innovation Hub

What is Sustaining Innovation, and how is it different from disruptive?

Sustaining innovation is innovation that improves existing products along dimensions existing customers already value — better, faster, more reliable. It strengthens the incumbent's position rather than threatening it. The opposite of disruptive innovation.

Innovation that improves existing products along the dimensions that existing customers already value — better performance, more features, greater reliability. Unlike disruptive innovation, sustaining innovation strengthens an incumbent's position rather than threatening it.

Source: Clayton Christensen, Christensen Institute

What is the difference between TAM, SAM, and SOM?

TAM — Total Addressable Market — is the total revenue opportunity available for a product or service if you captured every possible customer. SAM (Serviceable Addressable Market) narrows it to who you can realistically reach; SOM (Serviceable Obtainable Market) narrows it again to what you can realistically win.

The total revenue opportunity available for a product or service. TAM helps prioritize business opportunities by serving as a quick metric of underlying potential. Related metrics include SAM (Serviceable Addressable Market) and SOM (Serviceable Obtainable Market), which narrow the focus to realistic targets.

What is Technology Transfer?

Technology transfer is the process of moving scientific findings, knowledge, or technology from where it was created to where it can be developed and commercialised — most often between universities and industry.

The process of transferring scientific findings, knowledge, or technology from one organization to another for further development and commercialization. Common between universities and industry.

What is the Three Horizons of Growth framework?

Three Horizons of Growth is McKinsey's framework for balancing the innovation portfolio across time — Horizon 1 sustains the core business, Horizon 2 develops emerging opportunities, Horizon 3 explores transformational bets.

A strategic framework (developed by McKinsey) for managing innovation portfolio balance across time horizons. Horizon 1 covers the core business (incremental innovation), Horizon 2 addresses emerging opportunities (adjacent innovation), and Horizon 3 explores transformational ideas. Often paired with the 70-20-10 resource allocation rule.

What is a Value Proposition?

A value proposition is a clear statement of the tangible benefit a customer gets from a product — what it does, who it's for, and why it's better than the alternatives. A good one passes the senior-buyer test in 15 seconds; most don't.

A clear statement of the tangible benefit a customer receives from a product or service — what it does, who it's for, and why it's better than alternatives. A strong value proposition is the foundation of product-market fit and the starting point for any go-to-market strategy.