P-Type and S-Type Innovation Scan
Improve both the product and the strategy that carries it to market.
- Difficulty
- Moderate
- Time to result
- ~weeks to results
- Steps
- 5
- Confidence
- 98%
The P-Type and S-Type Innovation Scan divides innovation into two complementary search spaces. P-type innovation changes the product itself: its capability, design, performance, or underlying technology. S-type innovation changes strategy around the product: where it is sold, who receives it, how it is priced, what it is bundled with, or which partner and channel carry it. Teams naturally favor the dimension that matches their identity, so engineers may repeatedly polish the product while commercially oriented teams may repackage an unchanged weak offer. Audit both lists explicitly, identify the neglected side, and design small tests for each. Then test promising combinations, because a stronger product with a novel channel or pricing model can create an outcome neither change produces alone. The output is a balanced innovation portfolio rather than a one-eyed product roadmap.
Origin
Bahcall contrasted product breakthroughs such as the telephone, transistor, personal computer, and jet engine with Sam Walton's strategic choice to serve rural America through a differently located and priced retail store.
Core principles
- 01Product improvement and strategy improvement are distinct innovation paths.
- 02Strength in one path can create blindness to the other.
- 03Small changes in channel, pricing, bundling, or partnership can transform outcomes.
- 04The strongest businesses improve both what they offer and how it reaches people.
How to run it
- 1
Audit the product
List ways the offer itself could become more useful, effective, reliable, or distinctive. Keep these separate from marketing and distribution ideas.
Pro tip Tie each improvement to a customer outcome.
Watch out More features do not automatically make a better product.
- 2
Audit the strategy
List alternate customers, channels, partners, bundles, locations, and pricing models. Look for small changes that competitors overlook.
Pro tip Ask who wants the current value but cannot access it through the current model.
Watch out A strategy change cannot rescue a product that solves no real problem.
- 3
Find the blind side
Compare the depth and frequency of ideas on both lists. Identify which type the team habitually dismisses or delegates.
Pro tip Review recent projects to see where resources actually went.
Watch out Stated balance is less informative than the experiment history.
- 4
Test both dimensions
Run a bounded product experiment and a bounded strategy experiment with clear measures. Preserve enough separation to learn which change drove the result.
Pro tip Use a simple matrix of current/new product and current/new strategy.
Watch out Launching both changes everywhere at once destroys attribution.
- 5
Combine the winners
Pair the strongest validated product improvement with the strongest strategy change. Measure whether the combination creates an additional lift.
Pro tip Keep a control using the current strategy or product.
Watch out Do not scale a combination before each element has produced credible evidence.
In the wild
Sam Walton did not invent retail merchandise. He located a larger, lower-priced store in an underserved rural area near several state borders, discovering demand that established approaches overlooked.
→ A small strategic shift in location and market created a major retail opportunity without a new product category.
Common mistakes
Polishing and waiting
Making the product incrementally better and then sitting back ignores how channel, partnership, pricing, and bundling shape adoption.
Calling promotion product innovation
Mixing the two categories hides the team's blind side and produces an unbalanced search.
Is it for you?
Best for
Entrepreneurs, product leaders, and managers reviewing why a capable offer is not reaching its potential.
Not ideal for
Teams that have not yet established a real customer problem or cannot run a credible test of either dimension.
From the transcript
“p-type is a product loon shot or a product innovation something makes your product better”
“strategy might be a new way to market it a new person you can partner with a new channel you can use to get the…”
“the ones who really do great are the ones who can do both who can make their product better and come up with a new…”
From the episode
Safi Bahcall: Shoot Your Loonshot
Safi Bahcall