---
title: Monetizing Innovation — the book | RGM® Glossary
url: https://realgrowthmatters.com/glossary/monetizing-innovation/
updated: 2026-06-10
source_html: https://realgrowthmatters.com/glossary/monetizing-innovation/
---

# Monetizing Innovation

/ˈmɑnəˌtaɪzɪŋ ˌɪnəˈveɪʃən/proper noun

Ask what they'll pay BEFORE you build — or join the 72% of innovations that miss their numbers.

Authors
:   Madhavan Ramanujam & Georg Tacke

Published
:   2016, Wiley

Firm
:   Simon-Kucher & Partners

Claim
:   72% of innovations fail commercially

## Forms & parts of speech

willingness-to-pay talk · phrase (from the book)

The early pricing conversation.

"Have the **willingness-to-pay talk** at design stage — not at launch panic."

## What the book says

*Monetizing Innovation* diagnoses why most new products fail commercially: companies design first and price last, praying the market agrees. The Simon-Kucher prescription inverts it — have the willingness-to-pay conversation WITH customers at the design stage, segment by what people will pay for (needs-based, not demographic), configure and bundle features around those segments, choose the monetization model (subscription, usage, freemium, dynamic) as deliberately as the price point, and write the answers into a living pricing strategy. Products built this way launch knowing their revenue physics.

## The ideas people quote

The four failure types — feature shocks (overloaded products nobody can value), minivations (right product, underpriced nerve), hidden gems (game-changers the company can't see), and undeads (products that should never have shipped); the 72% failure statistic; 'the price you can charge IS market feedback'; and the rule that monetization model choice often matters more than price level.

## How to read it now

It is the missing pricing chapter of the lean canon — Ries tests desirability, this book tests PAYABILITY, and the two questions are not the same. For SaaS it pairs directly with Campbell's value-metric research. The cultural shift it demands is the hard part: making 'what will this cost and who pays' a design-stage question requires product, finance, and marketing in one room a year earlier than usual.

**Worked example.** A device maker stuffs its new model with eleven features and plans cost-plus pricing. The Monetizing Innovation pass runs willingness-to-pay interviews at prototype stage — three features drive 80% of payment intent (two of them cheap to build), four are valueless to every segment, and one 'minor' API turns out to be a hidden gem enterprises will pay triple for. The product de-scopes, ships in good-better-best configurations around the gem, and hits its revenue plan — the first launch in company history that did.

**Failure modes to watch.** Pricing at launch with fingers crossed; asking 'would you buy it?' instead of 'what would you pay?'; and shipping feature shocks because every internal stakeholder's pet made the cut.

## Synonyms & antonyms

### Synonyms

Monetizing Innovation

## Origin & history

Distilled from Simon-Kucher & Partners' decades of pricing engagements — the firm Hermann Simon built into the world's largest pricing consultancy — and its global study finding 72% of new products miss revenue targets. Wiley published it May 2016.

Etymology: [source](https://www.simon-kucher.com/en).

## Usage trends

Search interest for this term over the last five years:

[View interest-over-time on Google Trends →](https://trends.google.com/trends/explore?q=monetizing%20innovation&date=today%205-y)

## Common questions

Who wrote Monetizing Innovation?
:   Madhavan Ramanujam and Georg Tacke of pricing consultancy Simon-Kucher & Partners, published 2016.

What is the book's core rule?
:   Design the product around the price — have willingness-to-pay conversations with customers at the design stage.

What are the four failure types?
:   Feature shocks, minivations, hidden gems, and undeads — the four ways innovations miss their commercial potential.

## Related tools & calculators

- tool[CAC calculator](/tools/cac-calculator/)
- tool[LTV-to-CAC ratio](/tools/ltv-to-cac-ratio-calculator/)

## Resources & people to follow

- book*Monetizing Innovation* — Ramanujam & Tacke (the subject)
- referenceSimon-Kucher & Partners — research
- referenceProfitWell/Paddle — the SaaS companion data

Curated, non-competitor resources verified per term.

## Related training

- module[B2B SaaS growth](/training/b2b-saas-growth/)

## Disciplines

Areas of marketing where monetizing innovation is a core concern:

[Growth strategy](/training/growth-marketing-foundations/)[Analytics](/training/marketing-analytics/)

## Read next

## Related terms

[Patrick Campbell](/glossary/patrick-campbell/)[Value proposition](/glossary/value-proposition/)[LTV](/glossary/ltv/)[Product-market fit](/glossary/product-market-fit/)[Freemium](/glossary/freemium/)

## Sources

1. trends[Google Trends — "monetizing innovation"](https://trends.google.com/trends/explore?q=monetizing%20innovation&date=today%205-y)