Frugal innovation is about making the most out of the resources we have. Frugal innovation is about creativity that does not require much money. It taps into the brilliance of resourcefulness. Ultimately, it requires an emphasis on being able to think outside of the box.
The classic startup story is to raise millions of dollars and burn through it as fast as possible to pursue immediate, scaling growth. That approach can work. But that approach can also destroy companies, teams and founders, throwing them aside like used wrappers.
Frugal innovation is an alternative to that. It’s doing what you can, with what you have. It’s building in real-time, with existing resources, and refusing to be drawn into the hypergrowth game.
What is frugal innovation?
Frugal innovation comes from necessity. We have to be resourceful to innovate. Frugal innovation is the phenomenon where, rather than blow millions of dollars to develop the next cutting-edge technology, a company develops a simpler, cheaper, and more accessible tool.
The word “frugal” has a double meaning―it can mean either prudent or inexpensive. To be frugal, we need to be prudent in how we spend our money, and we need to be clever in how we use it. Frugal innovation is an extension of this idea―innovating ways that use less money and resources while maintaining quality and looking for the creative constraints that can force non-lateral thinking; frugality contributes to resourcefulness and creativity.
Writing for the Harvard Business Review, Navi Radjou Jaideep Prabhu highlighted frugal innovation as a philosophy of building beyond simply an economic approach.
Frugal innovation is more than a strategy. It denotes a new frame of mind: one that sees resource constraints not as a liability but as an opportunity — and one that favours agility over efficiency. Frugal organizations don’t seek to wow customers with technically sophisticated products but instead, strive to create good-quality solutions that deliver the greatest value to customers at the lowest cost.
How to use your creativity to innovate in frugal ways
So how do we bring a sense of creativity to the creative process of creating new ways of doing things? How do we bring a sense of creativity to the creative process of creating new ways of doing things?
Here are a few tips: Analyze the needs and wants of the consumer. Learn from others’ experiences. Look for the smaller opportunities that others don’t see. Connect with the needs of the market. Challenge the status quo. And when you’re ready to build, do it as efficiently, cheaply and cleanly as you can.
From there, you can use the creativity you bring to improve existing processes and make new ones; without the overwhelming costs that we usually associate with building a company.
What that says to me is that maybe you don’t need to create the shiniest and brightest company to develop a paradigm-shifting new product if you can use cheaper materials to make that product. You can build a more accessible, more affordable, and designed for an open world.
In the study Frugal innovation and sustainable business models by Mokter Hossain, the impact of FI on developing communities speaks to the opportunity for founders everywhere.
FI is especially promising in resource-scarce environments because of its emphasis on affordable, quality products. A key challenge here is to develop novel offerings with limited resources, and some enterprises compete without the benefits of resources, core technologies, or market power. This phenomenon is viewed from a composition-based view that emphasizes how ordinary firms with limited resources can generate tremendous results. Hence, specifically understanding local phenomena and generating theoretical knowledge across national boundaries is crucial. FIs embrace context-sensitive approaches to serve low-income customers, and innovations that emerge at the grassroots level of developing countries often serve these customers’ needs.
How much of your resources would it take to make the hypergrowth version of your product versus how likely it is that you will recoup that resource cost?
Frugal innovation can be implemented for consumer devices, and it can be applied to large-scale innovation. The scale of the product’s success and focus is not limited by frugality. It’s the building, selling and executing that is constrained.
Entrepreneurs are the drivers of change, and as the world evolves, so do we. Frugal innovation is the process of using available resources to create new solutions at a low cost. Today, we are living in a world where the resources and infrastructures are running the fuck out.
All the world’s rich resources can’t keep being sacrificed, making products that are too good to be true.
Joan Westenberg is an award winning Australian contemporary writer, angel investor, communicator and creative director. She is the founder of branding and PR firm Studio Self. Her approach to messaging, communication and semiotics has built her reputation as a writer, and she has been named as one of the leading startup voices in Australia by SmartCompany.
Her writing has appeared in The SF Chronicle, Wired, The AFR, The Observer, ABC, Junkee, SBS, Crikey and over 40+ publications. Her regular work can be found on Pizza Party, a blog about creativity, culture and technology. Joan is the creator of Transgenderinclusion.com, an open-source workplace inclusion hack.