7 Myths About Innovation Every Product Manager Should Know

Business model innovation sounds like a big, complex term – and for good reason. It’s not just about adding a shiny new feature or tweaking your pricing; it’s about rethinking how your product delivers value to users and generates revenue.

But here’s the thing: most of us approach innovation armed with myths and assumptions that do more harm than good.

For product managers, these myths can be especially dangerous. Why? PMs are at the crossroads of product strategy and business impact. If you’re chasing the wrong idea –whether it’s being the “first mover” or relying solely on tech breakthroughs – you risk wasting time, resources, and opportunities to build something that truly resonates with your users and drives the business forward.

In this post, we’re taking a closer look at seven common myths about business model innovation, inspired by the St. Gallen Business Model Navigator.

These myths have tripped up even the smartest companies, and understanding them can help you avoid falling into the same traps. Whether you’re refining an existing product or exploring a game-changing new idea, busting these myths will set you on the path to smarter, more effective innovation.

#1 You Need to Be the First Mover

... They say, but what they forget to mention is the risk of getting caught in the downpour before the sun even rises.

Reality check: In business, that bird often gets caught in the storm. While first movers can gain initial advantages, such as brand recognition and market share, they also face significant challenges:

• High R&D Costs: First movers often invest heavily in research and development to create new products or services.

• Market Education: They pay the initial cost of educating consumers about the newly created market – a luxury many products can’t afford.

• Risk of Imitation: Competitors can learn from their successes and mistakes, allowing them to enter the market with improved offerings.

In many cases, “fast followers” – companies that quickly enter the market after the first mover – can capitalize on the groundwork laid by first movers, refining the product or business model to better meet consumer needs.

Case Study: Facebook vs. MySpace

An example of this myth is found in the early days of social networking: MySpace was among the first social networking sites to gain widespread popularity after its launch in 2003.

However, Facebook, which launched a year later in 2004, quickly surpassed MySpace by focusing on a cleaner user interface, exclusive networks (initially limited to college students), and a more robust platform for third-party developers.

So, what went wrong with MySpace? Cluttered, overly customized profiles created inconsistent and overwhelming experiences. Prioritizing personalization over usability, combined with scalability issues and a lack of clear product vision, left the door open for Facebook’s simpler, more focused approach to take over.

By learning from MySpace’s shortcomings Facebook became the dominant platform, illustrating that being a fast follower can lead to greater success than being the first mover.

How to Avoid the First-Mover Myth

1. Focus on Value, Not Timing: Instead of rushing to market, concentrate on solving your customers' problems better than any other competitor. First doesn’t matter – better does.

2. Study First Movers: Watch early entrants closely. Analyze their successes and failures. What user needs are they missing? How can you refine the concept to provide a superior experience?

3. Prioritize Execution Over Hype: Even if you’re entering a crowded market, flawless execution can set you apart. It’s not about being the first to arrive – it’s about being the first to do the job right.

4. Iterate and Adapt: Leverage the groundwork laid by first movers and iterate based on user feedback and market trends. Continuous improvement is often what wins the race.

5. Avoid Over-Engineering: Don’t overcomplicate your product to “beat” the first mover’s feature set. Stick to core functions that deliver value. Features can come later.

For product managers, this means prioritizing execution, customer understanding, and adaptability over the rush to be first. Just ask Facebook.

#2 Innovation Must Be Big

These ideas are inspirational – but also dangerously misleading. The belief that every innovation must shake up the entire market often leads to overambitious plans, bloated products, and missed opportunities to address real user needs.

Reality check: Many game-changing innovations started small. Netflix didn’t begin by revolutionizing streaming; it mailed DVDs to your doorstep. Amazon wasn’t the “everything store” on day one—it just sold books. These companies scaled by focusing on specific user needs and refining their models incrementally.

Case Study: Airbnb’s Modest Start

In 2008, Airbnb wasn’t a global hospitality disruptor. It was a scrappy solution from two roommates struggling to pay rent. Their idea? Rent out air mattresses in their living room during a conference in San Francisco.

Airbnb didn’t “think big” by setting out to replace hotels. Instead, they validated their concept, focused on a niche market, and iterated based on user feedback. Over time, this humble idea evolved into a platform that disrupted the entire hospitality industry.

The key? They solved a real, immediate problem for their target audience. By starting small and scaling strategically, Airbnb avoided the traps of complication and grandiosity.

How to Avoid the Think Big Trap

1. Start Small, Learn Fast: Solve a specific user problem, even if it’s niche. Validate your concept, test quickly, and build momentum with early wins.

2. Focus on Incremental Impact: Instead of aiming for “industry disruption,” measure success through achievable outcomes: improving retention, increasing satisfaction, or streamlining workflows.

3. Solve Real Problems: Big ideas often fail because they solve theoretical problems. Address concrete, existing pain points, and let your innovation grow from there.

4. Keep Scalability in Mind: Starting small doesn’t mean staying small. Once you validate your core idea, plan for growth and adaptability.

5. Stay User-Centric: Continuously listen to your users. Their feedback will help you identify when to iterate, expand, or pivot. Let their needs guide your scaling decisions.

Thinking big is exciting, but as a product manager, the real magic lies in small, focused wins. Solve today’s problems while planning for tomorrow’s growth. Small steps can lead to giant leaps. Just ask Airbnb.

#3 Cutting-Edge Technology Is the Key to Success

Many assume that breakthrough products must rely on fancy new technology. In reality, it’s not the tech itself that drives success: It’s how well that tech solves a user’s problem, or fits seamlessly into their life.

Reality check: Some of the most successful innovations aren’t tech-driven at all. Instead, they use existing technologies in new ways or focus on improving user experience. Starbucks didn’t disrupt the coffee market with new brewing tech; it created a “third place” where people loved to hang out. Similarly, the iPod wasn’t revolutionary hardware; it succeeded because it seamlessly integrated with iTunes to deliver a superior experience.

Case Study: Uber’s Simple Tech, Big Disruption

When Uber launched in 2009, it didn’t rely on groundbreaking technology. Instead, it used three existing tools: GPS for location tracking, smartphones for user access, and digital payment systems.

What set Uber apart was how they leveraged tech to solve a real problem: Unreliable, inconvenient, and expensive taxi services. By offering cashless payments, transparent pricing, and ride tracking, Uber created a frictionless experience.

Uber’s innovation wasn’t in the tech itself but in its application. They used readily available tools to deliver a better, more user-friendly solution to an age-old problem.

How to Avoid the Technology Trap

1. Solve for the Job, Not the Tech: Focus on the problem your users are hiring your product to solve. Don’t chase tech trends – use tools that directly address their needs.

2. Reimagine Existing Tools: Most great innovations come from creative applications of what already exists. Look for ways to leverage current tech to solve problems more effectively.

3. Prioritize Practicality Over Novelty: Tech should simplify, not complicate. If it adds friction or confuses users, it’s not helping.

4. Validate Before You Scale: Test your ideas with minimal technology to confirm they solve the problem effectively. Build up from there.

5. Keep It Simple, Scalable, and Sustainable: The best tech solutions are easy to adopt, scalable for growth, and don’t overwhelm your team or users with complexity.

As a product manager, your role isn’t to chase the latest shiny tech trend. Your superpower lies in knowing when and how to use technology as a tool to solve real problems. Tech is just a tool. Practicality, creativity, and problem-solving always come first. Just ask Uber.

#4 Innovation Is Mostly About Luck

This myth suggests that innovation is purely a stroke of luck. It’s a tempting narrative, but it undermines the discipline, strategy, and effort that actually drive most successful innovations.

Reality check: While timing and serendipity can play a role, they aren’t the whole story. Behind every “lucky” success is a foundation of preparation, strategic decision-making, and a willingness to adapt. Luck may open the door, but hard work gets you through it.

Case Study: Instagram’s Lucky Pivot? Not Quite.

In 2010, Instagram wasn’t born as the global photo-sharing giant we know today. Its origin was an app called Burbn, a clunky location-based check-in tool with way too many features. The founders, Kevin Systrom and Mike Krieger, realized Burbn wasn’t resonating with users.

They analyzed what users actually liked about the app: photo sharing. They stripped everything else away and rebuilt the product around simple, filter-enhanced photo sharing. The result? Instagram quickly gained traction and became one of the most successful social media platforms of all time.

How to Avoid the Random Chance Trap

1. Prepare to Pivot: Luck favors the prepared. Be ready to change direction when user feedback or market trends indicate a better path.

2. Focus on User Insights: Collect and analyze user data to understand what’s working and what’s not. Patterns and insights, not random guesses, often guide successful pivots.

3. Create Conditions for Opportunity: Success isn’t about waiting for luck; it’s about building systems that make opportunities more likely. Test ideas, iterate, and keep experimenting.

4. Stay Agile and Open-Minded: Don’t fall in love with your first idea. The ability to let go and evolve your vision is what separates lucky guesses from calculated success.

5. Be Relentlessly Curious: Ask questions, seek feedback, and explore new possibilities. Curiosity is often the hidden driver of breakthroughs labeled as “luck.”

Innovation might look like luck from the outside, but it’s almost always the result of preparation, adaptability, and user-centered decision-making.

As a product manager, your job isn’t to hope for the stars to align – it’s to build the systems, processes, and mindset that turn challenges into opportunities. Just ask Instagram.

#5 Only Geniuses Can Innovate

This myth paints innovation as a rare gift bestowed upon a select few. While it’s romantic to imagine that all great innovations spring from moments of individual brilliance, the truth is far more practical.

Reality check: Most successful innovations are the result of collaborative efforts, iterative processes, and disciplined problem-solving. Steve Jobs didn’t design the iPhone by himself. It was the collective effort of Apple’s designers, engineers, and product teams, fueled by a culture of innovation and a deep understanding of user needs.

The genius myth can be paralyzing for teams. Waiting for a single groundbreaking idea or relying on one person’s “lightbulb moment”, means missing the real driver of innovation: structured creativity and cross-functional collaboration.

Case Study: Post-it Notes – No Stroke of Genius

The creation of Post-it Notes is often seen as a fluke, but it was anything but. In the 1970s, 3M scientist Spencer Silver invented a weak adhesive that wasn’t suitable for the intended use of bonding surfaces. The invention could have died there, but his colleague, Art Fry, saw an opportunity: using the adhesive to create a sticky bookmark for his choir hymnal.

What followed wasn’t an instant success. The team iterated on the product, tested it in various markets, and slowly built demand. It took years of collaboration, user testing, and persistence to turn Post-it Notes into the iconic product we know today.

The genius wasn’t in the initial idea; it was in the team’s ability to nurture it, adapt it, and bring it to life.

How to Avoid the Einstein Trap

1. Build Collaborative Teams: Great ideas rarely come from a single person. Foster collaboration across disciplines to bring diverse perspectives and spark new insights.

2. Encourage Experimentation: Don’t wait for a perfect idea to strike. Innovation thrives when teams test, learn, and iterate in a safe-to-fail environment.

3. Enable for Execution: A good idea is worthless without great execution. Make sure your team is equipped to turn ideas into reality.

4. Embrace Iteration Over Perfection: Big breakthroughs are often the result of small, incremental improvements. Create a culture that values progress.

5. Celebrate Team Wins, Not Individual Heroes: Shift the narrative from “who had the idea” to “how the team made it happen.” Recognition reinforces collaborative innovation.

Innovation isn’t about being a lone genius – it’s about building systems, fostering collaboration, and empowering your team to execute. As a product manager, your role is to cultivate an environment where ideas can grow, evolve, and thrive.

Remember: It’s not the lightbulb moment that drives innovation; it’s the teamwork that keeps the lights on. Just ask the folks at 3M.

#6 Bigger Projects Mean Bigger Impact

This myth suggests that the scale of an innovation determines its importance. Many believe that the only way to make a real impact is through ambitious, massive projects with huge budgets and extensive resources. But the truth is, impactful innovation doesn’t always require scale; it requires focus.

Reality check: Some of the most transformative innovations started small and focused. They solved a single problem exceptionally well, gained traction, and scaled over time. Think of Stripe, which simply made payment processing for developers simple, fast, and reliable.

The “bigger is better” mindset often leads teams to overlook small, meaningful opportunities that can deliver real value to users.

Case Study: Amazon’s $300 Million Button Fix

In the early 2000s, Amazon noticed that many customers were abandoning their carts at checkout. Instead of launching a large-scale initiative to overhaul the entire checkout process, Amazon’s team focused on a single, specific problem: requiring customers to create an account before purchasing. They added a simple option: “Continue without creating an account.”

The result? A significant reduction in cart abandonment and a reported $300 million increase in annual sales. Amazon focused on solving one pain point in the user journey instead of overhauling the entire process, proving that even small changes can drive big results.

How to Avoid the Bigger is Better Trap

1. Solve One Problem Well: Don’t aim to solve everything at once. Identify one high-impact problem and dedicate your resources to solving it well.

2. Stay Lean: Big projects often mean big inefficiencies. Embrace small, nimble teams that can iterate quickly and stay focused on delivering value.

3. Remove Friction: Small barriers can have a massive impact on user behavior. Focus on removing friction from your user journey.

4. Deliver Value First, Scale Second: Your first goal should be to create value for a specific group of users. Once you achieve that, scaling becomes a natural next step.

5. Resist the Urge to Overbuild: Complexity often creeps into large projects. Focus on simplicity without unnecessary features or bloat.

As a product manager, you don’t need a massive project to make an impact. Sometimes, the smallest changes—like a single button—can drive the biggest results.

Focus on removing friction, delivering value, and solving real problems. It’s not about the size of the project—it’s about the value it creates. Just ask Amazon.

#7 More Budget, More Innovation

This myth equates innovation with R&D spending, as though every breakthrough depends on a huge research budget or cutting-edge lab facilities.

Reality check: While R&D can drive technological advancements, it doesn’t automatically guarantee impactful innovation.

Some of the most successful innovations didn’t emerge from expensive R&D initiatives: They came from understanding pain points and creatively solving problems. The myth misleads teams into thinking innovation is purely about technological invention rather than practical application.

Case Study: IKEA’s Flat-Pack Revolution

IKEA didn’t invest in groundbreaking technology to revolutionize the furniture industry. Its innovation came from solving a practical problem: making furniture easier and cheaper to transport.

In the 1950s, an IKEA employee noticed how much space a table took up during shipping. His solution? Remove the legs for transport and let customers reattach them at home. This simple idea evolved into IKEA’s flat-pack furniture model, cutting costs and making it easier for customers to take their purchases home the same day.

How to Avoid the R&D Trap

1. Observe Your Users: Innovation starts with understanding your users’ real-world challenges. Spend time observing how they interact with your product or similar solutions.

2. Focus on Practical Solutions: Instead of chasing cutting-edge technology, ask: “What simple changes could solve a major pain point?” Sometimes, the best solutions just require a fresh perspective.

3. Reframe the Problem: Instead of asking, “What can we invent?” ask, “What can we improve?” A well-reframed problem often reveals opportunities for impactful, low-cost solutions.

4. Leverage Your Existing Strengths: You don’t need to create everything from scratch. Look at your existing resources, processes, or technology and ask how they can be reimagined to deliver value.

5. Drive Cost-Effective Innovation: High spending doesn’t equal high impact. Prioritize solutions that deliver maximum value for minimal investment. Constraints often lead to the most creative breakthroughs.

As a product manager, remember that innovation doesn’t always need a massive R&D budget. Often, the most transformative ideas come from observing users, simplifying processes, and focusing on practical, scalable solutions. Just ask IKEA.

Conclusion: Turning Myths into Mindsets

Do you ever wonder how legends like Facebook, Airbnb, or IKEA actually pulled it off? Spoiler alert: it wasn’t magic or luck. They didn’t blindly chase shiny tech, massive projects, or impossible ideals – they shattered myths, focused on real problems, and delivered value that stuck.

As a product manager, your challenge is to do the same: recognize the traps these myths create and turn them into stepping stones for smarter innovation. Here are the seven most important lessons to take with you:

1. Prioritize Execution Over Speed: Being first doesn’t matter if you’re not the best. Focus on refining your product and delivering exceptional value.

2. Start Small, Think Big Later: Grand ideas are great, but scalable success often begins with solving a single, specific problem.

3. Solve the Problem, Not the Technology: It’s not about how shiny the tech is; it’s about how well it works for your users.

4. Luck Favors Preparation: Serendipity is great, but preparation, observation, and adaptability make it work for you.

5. Innovation Is a Team Sport: The lone genius narrative is a myth. Collaboration and execution win every time.

6. Small Changes, Big Wins: Big impact doesn’t always come from big projects. Small, focused tweaks can drive massive results.

7. Practicality Over Spending: Throwing money at a problem won’t solve it. Observing users, reframing challenges, and staying creative will.

Innovation is about rewriting myths. Now go ahead, turn these myths into mindsets and start building the next great thing. If it worked for Airbnb and Amazon, why not for you?

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