What are Incremental Moonshots in Innovation?
In the realm of technology, not all groundbreaking changes emerge from sudden, radical shifts. Contrary to popular belief, the vast majority of advancements—98% in fact—are born from incremental innovation. This approach, often overshadowed by its more glamorous counterpart, disruptive innovation, is no less critical in shaping the landscape of markets and industries.
However, what is often missed is targeting of larger, more disruptive innovations while following an incremental approach. At Gaussian, we call these Incremental Moonshots—and they represent a paradigm shift in how we perceive and pursue innovation.
Incremental moonshots stand at the intersection of ambition and prudence, embodying the pursuit of disruptive, large-scale goals through steady, manageable steps. This approach is more sparing with the typical high-risk, high-reward scenarios associated with press-worthy innovation, opting instead for a path characterized by sustainable growth and improved likelihood of success. In today’s fast-paced and often unpredictable business environment, the incremental moonshot strategy offers a compelling alternative. It provides a framework for companies to innovate and grow, not through massive leaps, but through a series of calculated, strategic steps. As we delve deeper into this concept, we will explore its philosophy, key elements, challenges, opportunities, and real-world examples to illustrate its impact and significance in modern business innovation.
Key Elements of Incremental Moonshots
At the core of incremental moonshots lies a methodology that challenges traditional hype of innovative processes. The fact that the vast majority of innovation is incremental is a testament to the power of gradual, consistent steps, rather than relying solely on disruptive leaps. Incremental moonshots do not seek to replace “growth-at-all-costs” innovation but to complement it, offering a more sustainable and less risky path to significant achievements.
The key elements of incremental moonshots revolve around sustainable growth, risk management, and continuous innovation, with the imperative of remaining financially viable and ideally profitable. At its heart, this approach is about creating products and services through incremental wins that improve financial positioning and boost unfair advantages (particularly around customer knowledge and relationships), thereby guaranteeing an improved strategic position at every increment. The key elements include:
- Moonshot Vision: Having a bold or disruptive multi-year vision and mission. This is crucial for motivation, alignment, and checking progress. Example: “Go to the moon”.
- Continual Growth: Focusing on consistent steps to always be moving in the long-term direction.
- Gradual is OK: Market dominance and “blitzscaling” are not required to yield optimal outcomes for innovators and parent companies. (See the linked article for why blitzscaling is not a universally optimal approach.) Together with “Continual Growth”, this means that the venture is continuously growing, but without any external requirement of how fast.
- Customer-Centric Innovation: Continuously building and adapting products and services based on customer feedback and market trends to result in services that are always creating more total customer value at each iteration. Embracing a culture of ongoing learning, feedback, and adaptation to drive innovation.
- Focus on Cashflow: Targeting profitability and cash-generation early on, both as a financial input and as a mark of customer success. It’s hard to argue with whether you’ve created customer value if customers are paying. (Note hat this limits the use of certain tactics like “blitzscaling” which have a probability of success in some B2C scenarios.)
- Snowballing Unfair Advantages: Seeking to increase unfair advantage (particularly strength of customer relationships, and depth of customer understanding) with each success.
- Financial Stability and Risk Management: Achieving cashflow positivity to reduce operational risks and maximize flexibility (versus running out of cash and having no options). This is particularly important when market conditions change or when unpredictable disasters occur, which would require financial resilience. This also means minimizing gambling, and maximizing the expected value of the outcome, as opposed to the maximum upside. This is critical given that somewhere between 99% and 99.99% of new ventures fail, depending on definitions.