Innovation–Investor Need Tension
Generate widely, then select innovations that solve verified client needs
- Difficulty
- Moderate
- Time to result
- ~weeks to results
- Steps
- 5
- Confidence
- 96%
The framework treats product innovation as a tension between creative possibility and a verified investor need. Teams first generate a broad portfolio of ideas instead of waiting for one perfect insight. They then test each candidate from three directions: domain experts assess feasibility and investment substance, data reveals actual behavior and unmet demand, and client conversations clarify desired outcomes. Ideas that are novel but solve nothing should be discarded, while known needs without an effective solution become priority opportunities. The process resembles producing an album: create more material than the final release requires, then select and refine the strongest work. This converts innovation from serendipity into a disciplined funnel of generation, validation, selection, and delivery.
Origin
Bryon Lake connected Rick Rubin’s creative process with Goldman Sachs Asset Management’s approach to finding useful financial-product innovations.
Core principles
- 01Creativity requires sustained work rather than a single flash of insight
- 02Innovation creates value only when it solves a real need
- 03Experts, data, and client conversations reveal different parts of the problem
- 04A portfolio of ideas allows rigorous selection
How to run it
- 1
Generate a wide option set
Produce substantially more concepts than the team plans to launch. Encourage variation in investment capability, delivery mechanism, and client experience.
Pro tip Separate idea generation from evaluation so promising unconventional ideas are not killed prematurely.
Watch out Do not mistake the first plausible concept for the best one.
- 2
Name the investor need
State the specific client problem or desired outcome each concept addresses. Reject concepts whose value cannot be explained clearly.
Pro tip Frame the need as an outcome rather than a product feature.
Watch out Novelty without a use case wastes time and energy.
- 3
Triangulate evidence
Consult investment experts, examine relevant data, and talk directly with clients. Look for agreement or productive tension among these sources.
Pro tip Ask clients what they are trying to achieve before presenting a proposed solution.
Watch out A single enthusiastic stakeholder is not sufficient validation.
- 4
Select the strongest ideas
Rank candidates by need intensity, differentiation, feasibility, and expected outcome. Advance only the ideas that survive the evidence.
Pro tip Keep rejected ideas documented because changing technology may make them viable later.
Watch out Do not select solely on internal excitement.
- 5
Refine through repeated work
Iterate on the chosen concepts with experts and clients until the investment capability and delivery mechanism fit together.
Pro tip Expect several revisions before the product is ready.
Watch out Do not interpret necessary iteration as proof that innovation has failed.
In the wild
A product team generates twenty equity concepts. Client interviews reveal that anxious investors primarily need help remaining invested during drawdowns. Options specialists test feasible protection structures, behavioral data confirms demand, and the team advances a buffered strategy while dropping ideas that offered novelty without a clear outcome.
→ The selected product connects technical innovation to a demonstrated investor behavior problem.
Common mistakes
Waiting for inspiration
Breakthroughs usually emerge from sustained generation and refinement, not isolated moments of serendipity.
Building novelty without need
An inventive structure is commercially weak when it does not improve a client outcome.
Using only one evidence source
Experts, data, and clients each expose blind spots that the other sources may miss.
Is it for you?
Best for
It is best for product teams balancing creative experimentation with evidence from clients, experts, and market behavior.
Not ideal for
It is not ideal when regulation, a contractual requirement, or an already-validated specification dictates exactly what must be built.
From the transcript
“You write twenty songs, you pick the twelve best ones”
“what you're trying to do is find the tension between innovation and solving an investor need.”
“You look at the data, You talk to clients and understand what it is that they're trying to achieve.”
From the episode
Transforming ETFs with Bryon Lake of Goldman Sachs Asset Management
Bryon Lake