I've been struggling with the trade-offs between disruptive innovation and incremental innovation for a long time. Literature will tell you there are two types of products: new solutions to new problems, and better solutions to old problems. The former is usually referred to as "disruptive innovation", while the latter "incremental innovation".

Both, however, must be based on a deep understanding of need. At some abstract level, I think human needs are eternal. We want love, respect, intimacy, comforts, riches and so forth. When a new innovation comes around, it usually presents an entirely new way to satisfy these needs. But if it doesn't unlock a way to satisfy a deep desire, it will never be successful.

When customers express their need it is often tempting to dismiss them as wrong. "Oh they don't know what they need, we know better." That's a slippery slope I've been down many times. While there is a major difference between how customers express their need, and what their actual need is - there is always a legitimate need!. Your job as an innovator and product developer is to reflect deeply about the nature of their need, filtering through everything they are saying to find what they really, really care about. It's about listening and thinking deeply. There is so much bias, noise and confusion getting in the way of understanding what people really want.

You need to learn to shut out everyone else's opinions. Tons of people will share opinions: team members will try to simplify their work, investors will push for what they think increases market cap short-term, leaders will ask for what grows their powers, and so forth. Don't let all that noise get in the way of listening deeply to customers needs.

Once we have established the nature of the true need, you have to decide how radical you can be when innovating. That's about risk preference. There are no universal truths when talking about risk, it's all about preference. Action always comes with two costs: time and capital. The more radical the solution, the more time and capital it usually takes, and the more likely you are to fail.

Allocate based on risk-adjusted reward. There are times when companies will choose to spend 80%+ of their resources on incremental innovation. Perhaps their market position is exposed to a lot of competition, and they need to secure what they have. Others may have a very strong position in their core market, and can afford to take more risk. Such companies may spend only 20% of their resources on core products, and 80% on new, disruptive products. Some may be facing extinction, and choose to bet everything on a new, hail mary idea. Some have just started and have nothing to lose. Ultimately, the choice between risk and reward is a deeply personal one. Companies will be reflections of their founders and shareholders. Some prefer to play it safe, compounding for decades through incremental innovation. Others are bored easily and regularly bet everything. I think it's important to think about success on a risk-adjusted basis. I've started to think about "risk-adjusted emotions". If I make a bold bet and fail, I'm less sad than if a sure bet goes sour. Personally, I think most people would benefit from taking more risk, but that's just me.

Don't go about things in the wrong order. Don't start with a cool technology, or a cool solution. Always start with a deep, powerful need. I've started thinking in terms of virality: how likely is it that someone with this need will be so excited about your solution that they share it with their friends? It takes a lot for someone to recommend a product. You want to find a desire so powerful that once solved it makes people really, really excited.