Balancing an Innovation Portfolio: The Importance of Being Both a Catalyst Maker and Follower
On our innovation teams, we often ask ourselves a question — are we the Catalyst Maker or the Catalyst Follower?
One look at our trend radar and you’ll see some items in our strike zone that may look strikingly different from one another. Some trends feel perfectly aligned to Fintech & Retail innovation — embedded finance, headless commerce, and verified payments are all clearly linked to our industry. Even without defining the terms, many people could infer that it’s a space where we can influence change. But other trends might leave you scratching your head — why do we care about Web 3.0, the metaverse, or quantum computing?
The differences you’re noticing are not attributable to whether the trends are applicable to Fintech and Retail, but rather which trends players in our industries will be Catalyst Makers of, and which trends we’ll be the Catalyst Followers.
Being able to identify the difference will make it simpler to explain your body of work and prioritization decisions to key stakeholders within your organization.
What is a Catalyst?
In technology and product development, I view a catalyst as a driving force that spurs innovation. When a catalyst trend emerges or a major event occurs, progress and transformation accelerates — often at a multiple.
In many instances, a catalyst will be an enabler for teams across the industry to build new products. Enablers make it possible for people to build new products that wouldn’t exist otherwise. For example, the smartphone and its associated technology was an enabler for mobile applications.
Are You the Maker or the Follower?
A Catalyst Maker is going to create the change that others will build upon. Often they have unique domain expertise and a perceived right to win in a category. In the case of the Metaverse, for example, some clear catalyst makers are Meta, Roblox, and Decentraland among others. Those leaders are breaking through with technology that will enable others to build upon it. In the Fintech and retail space, we’re mostly Catalyst Followers for the Metaverse. As far as I understand, no one in our industries are building their own metaverse, but if the trend gains enough momentum, we would expect to see organizations follow the trend and build products or capabilities within the Metaverse to meet the new expectations of our customers.
We can look at another trend with the opposite effect; embedded finance. Loosely defined as the integration of financial services into non-financial platforms, this trend has been accelerating for some time. To enable this trend, Fintech players need to deploy capabilities that their non-financial partners can use to build their own products. The Fintechs are the Catalyst Makers — without them the trend is unlikely to gain momentum. The products that will be built as a result of this trend are enabled by the catalyst that the Fintechs start.
As with everything, there will be times where the answer of “who will spark the catalyst?” is less clear. Web 3.0 is certainly one of those times. For Web 3.0 to get a foothold, you’ll need digital properties to build for it, but at the same time, those digital properties will need peer organizations who have capabilities people will want to use. Imagine a use case where Fintechs can provide better payment or identity verification leveraging Web 3.0. Helping consumers own and transfer their data around the web has little value if other sites don’t leverage the capabilities.
Crafting a Balanced Mix
Most importantly, having a mix of trends where you can be the Catalyst Maker and the Catalyst Follower will balance your portfolio. Trends where you’re the Catalyst Maker will ultimately take greater time to develop, have more pivots than other products, and require you to exert great effort painting the picture of what could be. Your “Catalyst Follower” trends, on the other hand, will give your team shorter term projects aligned to trends that others are evangelizing. Prioritization for some of these trends will allow you to capitalize on the disruption of others, and ultimately result in some quick wins that keep your team engaged.
