The article reviews the role of capability innovations, defined as the carrying out of new combinations of capabilities, in human development. Drawing on a recognized social innovation in sanitation - the ikotoilets of Kenya's Ecotact - the article makes a threefold argument. Firstly, indirect conversion factors are an important element in the success or failure of an innovation. In our sanitation case study, these factors help to explain why the public toilets in urban centres are a success story and those in the slums a story of difficulty. Secondly, not to take into account direct and indirect conversion factors is to commit explanatory commodity fetishism. Goods are taken as given. However, they are the product of human design, including options for capability impact, and this accordingly needs to be taken into account. Thirdly, applying the capabilities approach to innovation suggests that it is fruitful to distinguish analytically two different scaling strategies regarding the replication of capability innovations, which the article calls ‘the lab’ and ‘the family’ strategies.