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The Innovation Funnel: Bringing Ideas To Life

In the new product development process, an innovation funnel is a common model used by many companies to evaluate ideas and conceptualize products. What are the key parts of an innovation funnel?

innovation funnel

By Tamara Barber

Originally published on the Innovation Evolved Blog

In order to manage the new product development (NPD) process, many companies today employ the model of an innovation funnel. The basic idea is that a marketer or R&D department starts with many product ideas that need to be examined and winnowed down, then shaped into concepts and tested until a final product is selected and launched.

Below are the main parts of the typical innovation funnel in more detail:

  • Opportunity assessment: Here the organization analyzes – through market data, customer knowledge or other information sources – what kind of opportunity exists for a new product line or line extension.
  • Insights-based ideation: Based on what kind of opportunity is a proper fit for the company’s strategy, the next step is to ideate different kinds of products or offerings that could capitalize on this opportunity.  This draws heavily on insights about the market and the target customer and could take the form of brainstorming, co-creating with customers, and conducting market research such as surveys, focus groups, online communities and crowdsourcing.
  • Conceptualization: At this stage, the team designs actual concepts for the top ideas that came out of the ideation stage. This might include packaging mockups, advertising copy or different configurations of product features.
  • Evaluation and benchmarking: Next it is time to go back to the target customers and test the different concepts. This can include choice modeling or even actual user testing (for example, in the case of web sites). Based on feedback from the tests, it may make sense to iterate on the concepts and then re-test.
  • Go/No Go: After testing is completed and feedback is gathered on iterations, analysis reveals the concepts with the best chance for success. Executives must make a go/no-go decision on whether or not the new product should be launched, taking into account not only the evaluation and benchmarking results but also factors such as manufacturing costs, margins, and other items that are unrelated to customer preference.
  • Launch: Assuming at least one concept is given the go-ahead, it is launched into the market! The idea has come to life.

Different versions of the funnel exist in terms of where inputs for innovation come from, but this is a traditional model. Over time other methods such as agile development and open development – both most widely used in technology innovation – have been introduced but the graphical representation of the funnel still remains popular. The simplicity of the funnel concept means it’s widely adaptable across different industries and types of organizations, but it certainly doesn’t capture the details of what it takes to actually bring a new product to market. And, in practice, a funnel-type process is often criticized because it nips creativity in the bud by pruning the truly innovative ideas early on and only moving the ‘safe’ ones through to the next stage.

In a time when we are awash in ideas and information – from internal resources to traditional market research, to social media data – marketers and product strategists are challenged to effectively and efficiently hone in on the best ideas.

Ironically, the innovation funnel itself may be in need of some iteration to account for this explosion in information sources. What changes do you think are required to modernize the funnel in a way that’s still relevant across industries?


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5 responses to “The Innovation Funnel: Bringing Ideas To Life

  1. Tamara – nice post, stating what is undoubtedly the case. I was curious as to your take on the process, which has been in place in many companies to my knowledge for more than a few years – and couldn’t figure it from your article, which was commendaly descriptive but left me hungry for insight/ critique/ suggestion for improvement. Makes me want to write me own piece….;) in terms of how the model is evolving, where it’s weaknesse are etc. Just saying 😉

  2. Edward–Thanks for your comment. You must have been reading my mind, because you nicely teed me up to talk about my follow-on post “Choking The Innovation Funnel”. 🙂 I just published it at, and I would love to hear what you think and either here or on our blog.

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