This formula is a pretty widely used one, and it can hold true both for a corporation, and an individual. At the intersection, where individuals are employees, it is doubly true, as failure can impact not just on the corporate coffers, but on the individuals prospects for advancement when the corporate culture frowns on failure.
However, the formula disregards the simple fact that many successful product innovations have the breath of life given to them for purposes other than what made them ultimately successful.
Consider that the oil industry was built originally on the use of kerosene as a lighting fuel during the 18oo’s, petrol was a valueless by-product until the internal combustion engine came along to make use of it, Velcro was developed so US astronauts would have a way of stopping things floating away in space flight.
There are thousands of examples, all pay little heed to the formula, as it is really hard to imagine all the uses for something new before the “crowd” gets their hands on it and exercises their ingenuity, so many products fail in their stated objective, only to succeed elsewhere.