Reducing Innovation Risk: How to Validate Ideas, Build MVPs and Test Your Way to Success

Why Organisations Must Actively De-Risk Innovation

Most organisations want to be innovative, or at least be seen as innovative. Yet over 95% of new innovations miss the mark, making innovation an expensive, time-consuming, and often frustrating endeavour. This isn’t just a challenge for smaller or inexperienced teams. Even global leaders like Google, Coca-Cola and Colgate have launched high-profile failures.

Those companies can absorb costly missteps. But what if your innovation budget is far smaller, or virtually non-existent? This is where strong innovation management becomes a genuine competitive advantage. With rising market uncertainty, regulatory shifts, digital transformation and the rapid growth of AI, innovation is no longer optional. It is essential for long-term resilience and growth.

Start with Evidence: How Targeted Market Research Reduces Innovation Risk

Many innovations I work with begin with a research breakthrough or promising technology aimed at a broad societal challenge; health, climate, energy or food security. These are important issues, but they often come with a fundamental question: who is the actual customer, and what is the real beachhead market?

The only way to answer this is through high-quality customer conversations with the right people. These should explore:

• Real needs and priorities

• Validated pain points

• How the innovation fits with existing workflows, regulation or care pathways

At this stage, we don’t need to mention the innovation itself. The focus is gathering evidence that a meaningful problem exists, and understanding how the innovation may need to evolve to address it. Doing this early saves enormous time and cost by preventing organisations from building something no one wants.

Learn Before You Build: MVP Approaches That Minimise Cost and Maximise Insight

Once a clear value proposition is defined, it’s time to test it. A Minimum Viable Product (MVP) allows you to validate assumptions quickly and cheaply. An MVP should represent the most basic form of your innovation, whether it’s a product, service, or internal improvement.

There are many effective MVP formats, including:

• Mock-ups or prototypes using no-code tools such as Colab or Manus

• Fake door tests, where you measure clicks and sign-ups for a product that hasn’t been built yet (to be used sparingly to protect brand trust)

• Concierge MVPs, where you manually deliver a service before automating it

The right approach depends on what evidence you need. But getting something in front of users early dramatically reduces risk compared with building a polished, fully engineered solution before anyone has validated it.

Test Quickly and Test Often: The Role of Agile Methods in Reducing Uncertainty

Agile methodologies are built on short development cycles and frequent testing. This stands in contrast to traditional waterfall approaches, where a near-complete solution is presented to the market only at the end.

By using agile methods and A/B testing:

• You test assumptions early

• You iterate based on real user behaviour

• You identify blockers and friction points

• You learn whether people are genuinely interested

This rapid feedback loop improves the innovation itself and strengthens strategic confidence that the solution will be adopted.

Use Traction as a Risk Indicator: What Genuine Market Signals Look Like

Ultimately, traction is the clearest indicator of whether an innovation will succeed. People are busy, both in B2B and B2C contexts, so if they are willing to spend time or money engaging with something new, they are seeing value.

Traction should act as a stage gate. Diffusion of innovation theory tells us that only around 16% of people (innovators + early adopters) will engage early. Your goal is to demonstrate value to this group first.

Traction indicators include:

Traction Type	Example
Interest	Responses to outreach or content
Engagement	Discovery calls or demos booked
Willingness to spend time	Testing early prototypes
Willingness to pay	Committing actual budget

If traction is low, revisit the value proposition, or consider pausing the innovation. Finding innovators and early adopters and involving them as co-development partners is often the most effective route to early traction, especially for organisations aiming to “be second rather than first”.

Design a Balanced Innovation Portfolio: Spread Risk and Protect the Strategy

Even the best innovators fail more often than they succeed. Evidence gathering, MVPs, agile methods and traction can de-risk the process, but external forces, market timing, regulation, and competition will always add unpredictability.

That’s why a portfolio approach is essential. Risk reduces significantly when no single innovation can jeopardise the strategy.

A strong portfolio:

• Avoids over-reliance on a few high-risk bets

• Makes multiple small, evidence-led bets

• Assumes a realistic level of failure

• Prioritises fast, cheap validation

This doesn’t mean investing in every idea. The portfolio should be anchored in a clear strategic hypothesis, aligned with the organisation’s purpose, starting point and long-term goals.

Share the Risk: How Partnerships, Co-Development and Outsourcing Accelerate Validation

Innovation risk can be reduced dramatically through partnerships, outsourcing and external funding. Partners often bring skills, tools or technologies that are too costly or slow to build internally. They may also be early customers who co-develop solutions and eventually adopt them.

In my experience, partnerships thrive when each party gains clear value. For pre-competitive innovation, industry consortia and joint industry projects can accelerate progress while sharing cost and risk.

External grants—from organisations such as Innovate UK, NIHR or UKRI—can also reduce financial exposure, particularly for early-stage technical validation.

Outsourcing market research, validation and customer testing ensures that these critical activities run in parallel with development, freeing core team members to focus on execution while benefiting from an independent “voice of the customer”.

Embedding De-Risking into Your Innovation Culture and Governance

By using these methods consistently, leaders can create a culture, governance structure and set of behaviours that make de-risking a natural part of innovation. When organisations rely on evidence, balanced portfolios and trusted partnerships, they reduce wasted effort, improve learning and ultimately accelerate time to impact.

No innovation should ever be considered a failure. Even if a project isn’t adopted, the evidence generated should guide future strategy and support adaptation—because the only constant is change.

At Bright Rhino Innovation, we help leaders build the evidence, strategy and partnerships they need to reduce risk and deliver meaningful impact. If you want to innovate with confidence, and turn insight into results, let’s talk.

Get in touch to explore how we can help you de-risk your innovation portfolio and set your organisation up for long-term success.