There is a phrase I've become fond of recently- Innovation tax.
The 'tax' you pay when designing a new solution for your customers. It's a tax as there are no incumbents to take reference from. Basically a new idea that has yet to be validated. This 'tax' would include everything from customer interviews, proposition validation, MVP's, pivots, etc. A lot of time and money goes into validating a new idea and finding an angle that works.
Innovating on an entirely new product is inherently risky. Is there demand? Is the solution one that your customers will use and pay for?
It can be like trying to find water in the desert- a pretty huge challenge.
Instead, why not look where there's existing, proven demand? Perhaps like finding water under a waterfall.
Sure, there are more competitors. But that's equally a good sign the demand is there.
When looking to the market for examples, Instagram is a recent example that comes to mind. With TikTok short videos booming, and the app recently exceeding 3 billion downloads, Instagram needed to do something fast. As such, the instagram reels feature was released. It's fair to say that it's pretty similar to TikTok, targeting a similar audience, with a similar experience and even some familiar UI elements.
Sometimes, execution can be the differentiator. 'Execution' could be a slight shift in the way the solution works, the distribution channel, aesthetics, etc. There is always room to innovate, it just doesn't have to be on the foundational solution.
Next time you're looking at a solutions, maybe ask not what's a cool new idea to explore, but what existing solutions are out there that can be innovated upon.
