# How Innovation Happens — Lesson #7: Invest in Experiential Capital
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## Article Content
I've been covering the link between future trends and innovation strategies for 30+ years. I went back through my blog posts, stretching to 2002, to dig out the nuggets of innovation insight I've discovered along the way. This series revisits those stories, tests what still holds up, and turns them into practical lessons for what comes next. "Do things that have a vague objective, unknown potential for success and an absolutely uncertain payback, simply to boost your experiential capital." I've come back to this idea repeatedly in my work because the mindset behind innovation usually changes before the results do. What people notice, question, challenge, and act on determines how ready they are for what comes next. Most organizations understand financial capital. Far fewer understand experiential capital: the stockpile of knowledge you build by doing things you have never done before. The future rarely arrives with a clean business case attached. New technologies, new business models and new customer behaviours usually begin in a fog. If you insist on certainty before you experiment, you guarantee that someone else gets the learning first. Small projects with uncertain returns can be extraordinarily valuable because they build the skills, intuition and scar tissue you will need when the trend suddenly becomes real. Experiential capital compounds. Each experiment gives you a little more confidence about what to do next, and just as importantly, what not to do. So what does that mean in practice? It means challenging the assumption, habit, or hesitation that is keeping you anchored to the present. Here are three places to start. Action Items: Set aside a small budget specifically for experiments with uncertain payback. Measure what a project taught you, not only what it earned. Ask where competitors are accumulating experience faster than you are. Explore the full How Innovation Happens series.

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Source: https://jimcarroll.com/2026/10/how-innovation-happens-lesson-007/