Innovation starts with a problem. Solving a problem requires deep understanding of customers who experience it. That can happen only in two cases: you are the customers or you understand customers well.
Customers you connect with and understand will define your innovation.
In reality companies stop talking with new customers and focus on legacy customers and internal stakeholders – distributors, sales, engineers, owners. But without the contact with new customers companies can not make highly competitive innovation.
Open innovation opens up companies to new customers with problems which are more profitable to solve. It motivates the company to talk to new people which results in new products, more competitive innovation, and new revenues.
Before finding a problem, understand the type of customer you want to help. Working only for legacy customers or internal stakeholders will result in less competitive innovation.