The Importance of the Raw Idea in Innovation: Testing the Sow's Ear Hypothesis

Abstract

How important is the original conception of an idea—the “raw” idea— to an innovation's success? In this article, the authors explore whether raw ideas judged as “better” fare better in the market and also determine the strength of that relationship. The empirical context is Quirky.com, a community-driven product development company for household consumer products. The data include descriptions of the raw ideas as originally proposed, the ultimate product designs that resulted from those ideas, and sales figures. In addition, they contain two measures of idea quality: those from online consumer panelists and those from expert evaluators. The authors note the following findings: First, online consumer panels are a better way to determine a “good” idea than are ratings by experts. Second, predictions with samples as small as 20 consumers are reliable. Third, there is a stronger predictive link between raw ideas and consumers’ purchase intent of final product designs than there is between those intentions and market outcomes. Fourth, the commercial importance of the raw idea is large, with ideas one standard deviation better translating to an approximately 50% increase in sales rate.