The 3 dimensions of Innovation Architecture

A practical framework for innovators or investors playing with risk

In my experiences as a startup founder, NGO leader, and investment strategist I’ve been contemplating on “what makes innovation effective?”.
I recently came across one of the most practical and useful framework to design or validate innovation projects. I just had to share it!

We will explore the 3 dimensions of innovation as follows:

1. Overview of the Innovation Risk Cube.
2. Examining 3 interesting innovations applying this framework.
3. Further reflections on its applicability (Contextual prerequisites and execution principles).

Due credits and thanks to Prof. Virginia Cha for innovating upon the Innovation Risk Cube framework and sharing it with us during our ISB MBA immersion at NUS B-School. Also credits to Terry Opdendyk of ONSET ventures and Jerry Engle of UC Berkeley and all of the other beautiful minds for developing this framework.

Architecting Innovation: The Innovation Risk Cube

As you can see in the image, the Innovation Risk Cube evaluates Innovation Risk based on the 3 dimensions: Product, Market, and Business Model.

In Prof. Cha’s words Innovation Architecture is “the art and science of building a new business whose core value proposition is based on innovation”.

Let’s apply this framework on the following startups:

1. Neeva (A start-up challenging Google)
2. Labster (An edTech upstart)
3. Amazon Care (A failed experiment?)

Neeva — Popularly known as the Startup challenging Google is an interesting example of both product and business model innovation. Founder by ex-Googlers Neeva offers a superior Search experience without the Ads and without collecting unnecessary customer data. Even before launching Neeva had been making the rounds in global tech circles.

Neeva falls squarely in to the R3 cube :

1. Existing Market: Search is very much an existing market. With Google enjoying the dominant share (83% as on June ’22) followed by Bing and Yahoo.
2. Incremental Product: Search engine is quite different from Google’s in that it does not collect user data. However there’s nothing radical about this product.
3. Untested Business Model: A subscription fee based search engine is untested.

Labster — A success case in R4

Labster is a Copenhagen based startup with 250+ virtual science simulations, immersing students across ages in an interactive learning environment where they practice lab skills and visualize theory. Although Labster was founded in 2011, it seems to have really taken off post COVID19 (google searches have 99xed ever since) proving the criticality of timing for innovation. Labster had raised over $150M in funding so far.

Existing Market: Laboratories for education or training purposes have a large existing market.

Radical Product: Virtual Laboratories with advanced simulations are. Labster had successfully timed it.

Untested Business Model: Labster is providing schools, universities, and training centers which have traditionally used their own infrastructure for laboratory requirements.

Amazon Care — Struggle in R8

Amazon’s experiment to offer primary care and urgent care virtually to its employees and enterprise clients is a bold attempt at innovating on a new service.

In hindsight we know that it has been cancelled after 3 years. We can argue that this falls in the R8 of the innovation risk cube for the following reasons:

1. Radical product: They did aim for a frustration free experience where consumers can “Access a clinician 24/7, 365 days a year. No more waiting rooms, no more travel time”. While TeleHealth is not radical the entire value proposition that Amazon Care tried to achieve is radical, I argue.
2. New market: Care was not delivered via enterprise employers before and Healthcare is definitely not Amazon’s forte. (Insurance coverage and other benefits were of course the pre-existing offerings.)
3. Untested Business Model: Wholly virtual telehealth was an untested model at least 3 yrs ago (before the pandemic) when Amazon started the initiative.

So what went wrong? That’s for another article I suppose!
Amazon later released a statement that this Care model does not work in the long-term (I wonder why!) although many of the users really enjoyed the services. Notwithstanding this setback, Amazon is continuing to make strategic acquisitions of the likes of One medical and Ginger etc.

While its easy to criticize but it is commendable how Amazon made the bold choice to innovate. Perhaps they could avoid the double whammy of new market and untested business model in the future. R8 seems like a black hole even for the likes of Amazon!

Anyways, moving on to conclusion now!

Reflections on execution of risky innovations

1. It doesn’t have to be the shiny new thing everytime. While I have not presented any success cases on R1 or R2, there are many if you simply look out for them. Off the cuff, I’d dare say Stripe (the $95 Bn startup) is R1. They had great timing and stellar execution all the while with incremental innovation on pre-existing payment gateways and APIs. Pat Collin’s also attributes much to “luck” in an interview with Tim Ferris. Another one that seems like an R7 or R8 innovation but really is an R2 (Radical product in an existing market via a tested business model) is the Apple iPod. It was just radically designed.
2. Timing is still vital. Technology Advancement Chart or the S-Curve are interesting models to evaluate if the timing is right for the Market. Being ahead of time can be as painful as being behind in time.
3. R5 to R8 is for the BOLD (or insane). I’m really curious to hear on success stories from this dimension. Please share in the comments. Would love to have a virtual coffee with you.

Thanks for reading this all the way through! It’s 100% human written.
Do leave a comment on your thoughts or get in touch over LinkedIn/Twitter!

Happy Innovating!