Company leaders pride themselves on their ability to make critical decisions to drive their business. Yet, sadly, most companies don’t use hard data to make innovation decisions. The result is an 85- to 95-percent failure rate in innovation. 

Why don’t leaders use data to make more decisions? It’s because they don’t know that they can! 

Leaders aren’t stupid. They would use data to aid their decision making if they had it. The reason why they don’t is that they believe they can’t gather data to help them make decisions. Ten to twenty years ago, they were right. It was not cost-effective to use data to make smarter decisions. 

Fortunately, discoveries and technologies now make it possible to gather data to support 100 percent of critical decisions cost-effectively. For example, a long-term marketplace tracking study by the Eureka! Ranch’s MERWYN Decision Support Group found that the Truth Teller research methodology was seven times smarter at making go/no go decisions than company leaders.

The new generation of data-driven decision support is based on three principles that have been proven to work for industrial, business to business, consumer, services, nonprofit, and even government innovations. These principles include:

1. Testing at the speed of decision making. Old world research methods were practical, prudent, and pondered. Leaders often relied on judgment because it wasn’t possible to get data in the time available to make a decision. In the new world, research timing and cost is diminished by up to 90 percent. One multinational found that the new methods helped cut costs by some 93 percent. Speed and cost savings are a result of utilizing 100 percent digital systems for design, fielding, and analysis of research. The result is a statistically reliable single product and paired comparison tests in 60 to 90 minutes. 

2. Measure twice or three times — decide once. When facing challenging decisions, there’s often no “magic test” that can be run. In these situations, the new speed mentioned above makes it possible to use two or three distinct methods to triangulate on Decision Support data. A few of the ways that can be utilized include: 1) Rapid Research with key stakeholders, customers, etc., 2) Digital Delphi calibrated quantification of those with domain expertise, 3) Idea Coach artificial intelligence idea evaluation, and 4) Truth Teller benchmarking of new ideas versus 50 validated success factors. 

3. Confront reality with risk-adjusted forecasting. Multiple measures and the inherent uncertainty of forecasting assumptions introduce risk that’s often minimized or ignored. The new mindset is to embrace the uncertainty/variance in a problem and to model them. Tools like Monte Carlo simulations and five-year trial, Repeat, and Diffusion Models quantify the uncertainty enabling leaders to know the high-risk issues. Importantly, risk-adjusted forecasting can be applied to 100 percent of crucial decisions.

Over the years, the application of these principles, alone and in combination, has enabled Procter & Gamble, American Express, Reckitt Benckiser, J&J, Kraft, Nestle, and many others to make smarter decisions on genuine New to The World Innovations. 

To create, communicate and commercialize an innovation requires a lot of money. The money can come from your existing company, from outside investors or from your own savings. Note: When it’s from your own savings, it’s not uncommon that decisions won’t be fully your own. You may have a spouse or partner who has a financial and emotional stake in the investment. 

I’ve spent over 40 years selling companies, outside investors, family and friends on investing in ideas I’ve created or helped create. I’ve sold multi-national corporations, small companies, non-profits and even governments on investing in my ideas. 

From this I’ve learned three secrets that I believe are nearly fool proof. As I describe them, I’ll use the experience of attracting investors to my business, Brain Brew Whisk(e)y Academy, to share how it unfolds in practice. 

1. Make it real. Secret One is to make your idea real. By this I mean you must craft two prototypes:

Concept Prototype: This is ideally one piece of paper that presents your idea in the way you’d show it to a possible customer. When you don’t have the actual innovation, use illustrations to help potential investors see your idea as you envision it.

Functional Prototype: This is a works-like demonstration of the “magic” that’s your innovation. It doesn’t matter how ugly it is; it just needs to help potential investors see, feel and experience the Wow! you envision.

When meeting with investors for Brain Brew Whisk(e)y, nothing was more powerful than putting a bottle with a label on a table and offering a taste to potential investors. Depending on where you live, it may or may not be legal to make your own whiskey. In this case, find a local craft distiller where you’re able to make your pitch under his or her distilled spirits production license. 

This is what I did when I started Brain Brew. A local distillery registered my company name under his permit. I produced and sold product this way for a couple of years until we got our own DSP permit.

2. Show the numbers. If you want investors to invest you must have the numbers. Numbers include: 1) Customer research on your prototypes, 2) Sales and cost forecasts, and 3) R&D, production and marketing investment needs. No math = no project. This is what I tell inventors inside and outside of companies.

Connecting with a local craft distiller was helpful in putting numbers together for Brain Brew Whisk(e)y. Scott Schiller with Thoroughbred Spirits Group — craft spirits experts — knows the numbers behind craft distilleries inside and out. Consult with experts to help you figure out the numbers.

3. Protect your invention. Define in writing how you can protect yourself from being copied. Investors like to “own” something and know that no one else owns anything close to it. 

The easiest way to protect your invention is to file a patent. You can also use trade secrets, specialized supply chain or, in some cases, trademarks. 

With a product like Brain Brew Whisk(e)y, this was a bit tricky. You need to have something in your product offering that’s protectable. Protection is relative to what size market you’re thinking about. It can be protectable in your town, region or state. Or, if your goals are larger, protectable in your country or the world. Local protection includes: product, location, brand. Broader protection requires a patent or a truly secret recipe that can’t be copied because of special raw materials or method. 

Do not try to claim that your larger protection is your “brand.” That’s only the case after you’ve created it. To claim it at the start is just foolishness.

When you can make your innovation real with prototypes, share your math and your proprietary protection, then you have what you need to get investors to write you a check to support your innovation. In my personal experience over the years, this process works with both inside corporations and outside investors.