Part of good innovation is knowing when to say "no." That 's equally, if not more important than saying 'yes.' In a recent article, Google Senior VP Jeff Huber gave insight into their process for turning things down, and how they are still able to wow the world with their innovative products.
I suggest that you read the article, but here is my take on Google's process:
a. Diligent consumer testing: Know your audience and give them what they want. Any product that repeatedly fails consumer tests is immediately ditched.
b. Diligent listening: Google purposely puts out less than perfect products and then hones them around customer suggestions through their active product blogs.
b. Getting the fans and making the buck: If a new product won't generate ad revenue, the product is dropped. The bottom-line, particularly in this economy, is it should have a lot of fans. By Seth Godin's definition, a fan is someone (in this case a user) who will proselytize on your behalf. Getting more fans gets more ad revenue, which keeps the company growing.
Google's first-line of testing is their large and phenomenally brilliant employee base. If a product doesn't create a fan base among their employees, it probably won't make it in the "real world." Its what the googlers call "eating your own dog-food."
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