From my own experience, I can say that founding a startup is not always the easiest thing to do. Especially in times of crisis, as we are currently experiencing, raising funds from investors is an extreme challenge. But a crisis can also be an opportunity for innovation, because some of the best ideas of our time came about because of an urgent need to change something.
But what to do when the market is there, but resources are scarce? This is where “Frugal Innovation” comes into play. “Frugal Innovation” is a process to achieve the maximum with the least amount of resources. Startups can use it to stretch their resources and achieve greater impact. The method originated in the 2012 book “Jugaad Innovation coined: Think Frugal, Be Flexible, Generate Breakthrough Growth” by Navi Radjou and Jaideep Prabhu, who took a closer look at innovation in a resource-poor context.
Here, there are many ways frugal innovation can help a startup grow.
The basic idea of frugal innovation is to stretch resources as far as possible. Especially product development and marketing need the most resources for the start of a young company. But to reach the maximum it usually needs money.
In Frugal Innovation, however, companies forgo traditional marketing and resort to guerrilla techniques to promote their product without spending enormous amounts of money on traditional marketing, where they would need resources for social media advertising, campaign budgets, and more. In product development, a stronger focus on open source software and tools is a good solution to get the most out of the little money.
None of this sounds very beneficial right now, but when you have little, you have to focus on the essentials and that brings some benefits. Startups are forced to think more strategically in Frugal Innovation than they would have to with enormous resources and money in the background. The focus of each member is on the essentials and thus the unnecessary waste of money is saved. Also, you have to get creative.
When companies are forced to do more with less, creativity is required and this can lead to the very innovative mindset that brings final growth and success. Breaking out of traditional methods and ways of thinking is the core of innovation and therefore a great way for founders to offer the maximum for themselves and their customers.
But one thing is the absolute advantage of “Frugal Innovation”, not only the founders feel like they lack resources, but also the customers. This builds a commonality that allows customers and companies to build a future together.
Many more examples of frugal innovation and the building blocks are also available in this article.
