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Ideas Are Dime a Dozen


 
 

 

Click here for a Slide Show "Will Your Ideas Work?

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January 10, 2006

The Art of Innovation

I'm getting tired of writing about lies, so today I'm covering truths. Specifically, the truths of innovation. I hold these truths to not be self-evident; hence we see so little innovation.

  1. Jump to the next curve. Too many companies duke it out on the same curve. If they were daisy wheel printer companies, they think innovation means adding Helvetica in 24 points. Instead, they should invent laser printing. True innovation happens when a company jumps to the next curve--or better still, invents the next curve, so set your goals high.
  2. Don't worry, be crappy. An innovator doesn't worry about shipping an innovative product with elements of crappiness if it's truly innovative. The first permutation of a innovation is seldom perfect--Macintosh, for example, didn't have software (thanks to me), a hard disk (it wouldn't matter with no software anyway), slots, and color. If a company waits--for example, the engineers convince management to add more features--until everything is perfect, it will never ship, and the market will pass it by.
  3. Churn, baby, churn. I'm saying it's okay to ship crap--I'm not saying that it's okay to stay crappy. A company must improve version 1.0 and create version 1.1, 1.2, ... 2.0. This is a difficult lesson to learn because it's so hard to ship an innovation; therefore, the last thing employees want to deal with is complaints about their perfect baby. Innovation is not an event. It's a process.
  4. Don't be afraid to polarize people. Most companies want to create the holy grail of products that appeals to every demographic, social-economic background, and geographic location. To attempt to do so guarantees mediocrity. Instead, create great DICEE products that make segments of people very happy. And fear not if these products make other segments unhappy. The worst case is to incite no passionate reactions at all, and that happens when companies try to make everyone happy.
  5. Break down the barriers. The way life should work is that innovative products are easy to sell. Dream on. Life isn't fair. Indeed, the more innovative, the more barriers the status quo will erect in your way. Entrepreneurs should understand this upfront and not get flustered when market acceptance comes slowly. I've found that the best way to break barriers is enable people to test drive your innovation: download your software, take home your hardware, whatever it takes.
  6. “Let a hundred flowers blossom.” I stole this from Chairman Mao. Innovators need to be flexible about how people use their products. Avon created Skin So Soft to soften skin, but when parents used it as an insect repellant, Avon went with the flow. Apple thought it created a spreadsheet/database/wordprocessing computer; but, come to find out, customers used it as a desktop publishing machine. The lesson is: Don't be proud. Let a hundred flowers blossom.
  7. Think digital, act analog. Thinking digital means that companies should use all the digital tools at its disposal--computers, web sites, instruments, whatever--to create great products. But companies should act analog--that is, they must remember that the purpose of innovation is not cool products and cool technologies but happy people. Happy people is a decidedly analog goal.
  8. Never ask people to do what you wouldn't do. This is a great test for any company. Suppose a company invents the world's greatest mousetrap. It murders mice better than anything in the history of mankind--in fact, it's nuclear powered. The problem is that the customer needs a PhD to set it, it costs $500,000, and has to drop off the dead, radioactive mouse 500 miles away in the middle of the desert. No one at the company would jump through those hoops--it shouldn't expect customers to either.
  9. Don't let the bozos grind you down. The bozos will tell a company that what it's doing can't be done, shouldn't be done, and isn't necessary. Some bozos are clearly losers--they're the ones who are easy to ignore. The dangerous ones are rich, famous, and powerful--because they are so successful, innovators may think they are right. They're not right; they're just successful on the previous curve so they cannot comprehend, much less embrace, the next curve.

Written at: Marriott Hotel, San Francisco, California


Using Video to communicate "Serious" content -New Idea Targets Wall Street

A few years ago, a video on the stock performance of Jack in the Box might have involved a sit-down interview with the fast-food restaurant’s chief executive, dryly discussing its fundamentals.

 

Today, it is just as likely to be a music video with a leggy brunette licking a French fry and a hedge fund manager wearing a massive gold chain necklace, both singing an homage to a recent “Saturday Night Live” sketch.

Welcome to Wallstrip, a three-month-old Web site that mixes stock news and pop culture.

 Featuring an actress, Lindsay Campbell, as a host, the site offers a short daily video featuring a stock at a 52-week high, as well as financial bloggers who discuss the companies at the heart of each episode.

“We saw a huge space between Jim Cramer and the bottom of the market,” said Howard Lindzon, the manager of a small hedge fund who helped create the show and is now its executive producer.

The popularity of Wallstrip — it claims to have an average of 10,000 views a day — is only the latest sign of the growing use of video on financial Web sites. Sites like CNBC.com and TheStreet.com have increased their video offerings, for example.


 

Solve a Problem

Richard Branson/Virgin Example:

The Virgin Group empire spans planes, trains, spaceships, and even comic books. But on Feb. 1, 2007, Virgin Group founder Richard Branson made one of his boldest moves yet with the creation of the Virgin Health Bank, which enables parents to bank the stem cells of their newborn child's umbilical cord. These primitive cells are capable of developing into any one of a number of different cell types and are currently being used to treat 75 rare blood and immune system disorders, including some forms of cancer. "There is huge potential to be gained from the collection and storage," Branson says. Visit this link for a slide show on all the entrepreneurial efforts the zany Branson is involved in.


Web Sites With Inventions

 The Quick View Valve - The Built-In Tire Pressure Gauge!   Now you can quickly and easily view the air pressure in each of your tires with the Quick View Tire Pressure Gauge Valve.  The Quick View has a permanent, built-in tire pressure gauge that you can easily read in seconds.  The Quick View eliminates the need to squat down and remove dirty caps and apply a tire pressure gauge (which is often inaccurate at filling stations).  This revolutionary new valve stem is installed permanently and is theft proof.  Proper tire pressure insures better gas mileage, safety and prevents unnecessary wear and tear on your vehicle.  Patented.  

 

The example above is but one of many Inventions for sale by inventors on http://www.inventionshowcase.com/. Another is shown below.The Sarah Bra - Designed for Those With Injuries or Paralysis.  The Sarah Bra by Wear Ease® is designed for women who have trouble dressing.  Whether you have a minor wrist injury or a severe and permanent paralysis from stroke or spinal cord injury, you can achieve total upper body dressing independence with the Sarah Bra.  The Sarah Bra is designed to provide dressing independence with gentle support and maximum comfort. The design of the bra and the stretch of the fabric allow the bra to accommodate a range of sizes and specific needs. Not only is the Sarah Bra easy to put on, it is very comfortable to wear.  


 Blogs

Blogs can be a very interesting place to troll for ideas. It is often difficult to keep your mind on what you started looking for, as it is easy to drift off into the bloggers world of comment and counter-comment. Do a general search on Google on "idea blogs" and you will be surprised at the results. ME "Liz" Strass's blog is an example. If you are interested in keeping up with the latest in technical companies and technical trends, try the following sites:

  • TechCrunch is a Group-edited blog about technology start-ups, particularly the Web 2.0 sector. This blog often provides the first look at sites and technologies in their alpha or beta stages provided a heads-up for entrepreneurs. The site has a compnay index where companies that have had previous coverage may be looked up, and a "dead-pool" for companies that have gone under.
  • Venture Beatis a Silicon Valley-based blog that also provides an early look at both tech trends, tech news, and new companies. It has a bias towards where VC money is being spent, which in and of itself provides entrepreneurs an open window on where the "smart" money is going.
  • GMSV (Good Morning Silicon Valley) runs in competition to a certain extent to the two blogs just mentioned, but with a lighter, more personal touch. It is a good complement to them.
  • ValleyWag Provides a social "who's doing what to whom" kind of coverage, like People Magazine for Silicon Valley. Here's an example of what they had to say about the recent (ended Jan 30) DEMO: "The consensus pick for hottest company? eJamming, an online service which allows musicians to jam together, remotely. The hottest commentator, Shel Israel, who picked seven of the top nine ventures, and none of the also-rans. Now, eJamming does sound absolutely cool, and the CEO's singing presentation was a hit. But, if a project so quirky is the most significant venture to emerge, from tech's most prestigious startup showcase, may the gods help us all."

Diversity

The Global:Ideas:Bank (link here) provided the provacative comment below, and provides many more. Think about it.

"Innovation provides the seeds for economic growth, and for that innovation to happen depends as much on collective difference as on aggregate ability. If people think alike then no matter how smart they are they most likely will get stuck at the same locally optimal solutions. Finding new and better solutions, innovating, requires thinking differently. That’s why diversity powers innovation."


 

Devour Business 2.0

Over the years, tech-industry based magazines have come and gone; Business 2.0, owned by CNN, has defied this trend. Month in and month out, and now available online with a blog, Business 2.0 provides insights into new business ideas and trends that are generally ahead of the curve. Good stuff!


Keep Periscope Up

Play kids video games, listen to them. They are the next generation of buyers, and they have lots to tell the entrepreneur who is willing only to listen. Often trend setters, the "kids" generate ideas upon which may be built very successful businesses.

 
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Special Report: InnovationHow? To Be A DisrupterClayton? M. Christensen and Scott D. Anthony 01.23.07, 6:00 AM ET

You’ve got a business model that larger, well-established rivals sneer at. Plus, you’ve developed a product that sacrifices pure performance for lower prices but is substantially more flexible. Sounds like a classic recipe for disruptive success, right?

Not for Internet phone pioneer Vonage, whose stock price sank close to 60% in the six months following its May 2006 initial public offering. Our research shows that companies that follow the tenets of disruptive innovation can sharply increase their chances of success.

Yet Vonage’s struggles are a poignant example of how seemingly disruptive beginnings don’t always translate into happy endings.

How can you ensure that your disruptive doesn’t turn into a disappointment? Companies hoping to maximize the chances of realizing their innovative potential should seek to “fumble forward” down the disruptive path while constantly assessing how all competitors will respond to their approach.

What is disruptive innovation?

Across the sweep of history, companies have used disruptive innovation to transform existing markets and create new ones. As described in our books, The Innovator’s Solution and Seeing What’s Next, disruptive innovations trade off pure performance in favor of simplicity, convenience or affordability. Disrupters target customers who find existing solutions too expensive or too complicated. They offer “good enough” solutions at a lower price.

An emerging player in the advertising industry--Spot Runner--fits the disruptive pattern nicely. Spot Runner targets small companies that have historically found advertising on television complicated and expensive. Spot Runner's clients can use stock footage, along with Spot Runner’s Web-based interface, to piece together a television advertisement. Then they can use Spot Runner’s proprietary algorithms to place the ad on a local cable channel.

The resulting ads aren’t visually stunning, but they are cheap and simple. And powerful incumbents--the big advertising firms on Madison Avenue--aren't motivated to respond, because Spot Runner is targeting non-consumers, companies that wouldn't have used television advertising if the cheaper product hadn't been available.

This pattern has played out in dozens of different industries, and powered phenomenal success stories like Southwest Airlines, YouTube?, the University of Phoenix and Wal-mart.

Fumbling forward

But for every successful disrupter, dozens have tried and failed. Every executive knows that a strategy that looks great on paper can crumble upon execution. Companies moving in a disruptive direction need to manage a delicate balance: they need to constantly change their strategy while constantly pushing forward.

A steady stream of research suggests that innovators have at best a 10% chance of starting with the right strategy. That means companies must constantly adapt and experiment to find the right path to success. For example, search king Google didn’t have it right from the beginning. It had to fundamentally rethink its business three times before it built the auction model that now powers its success.

But while fumbling is acceptable, standing still is not. That's because dozens of other companies are also looking for the keys to disruptive innovation in every industry imaginable. Google had to top competitive offerings from Yahoo!, Overture, Lycos, Ask and numerous others.

To successfully fumble forward, companies should seek early wins while planning for their second and third acts. By pushing for early wins, firms can gather feedback to adjust inevitably flawed strategies. Planning for follow-on acts ensures that companies don’t get “stuck” in a foothold market. Imagine if Apple had stopped with its “first generation” iPod instead of introducing minis, nanos, shuffles and video players.

Consider all competitors

Companies are always evaluating their products through customers’ eyes. But firms also need to ensure that they evaluate their approaches from the perspective of existing and potential competitors.

Vonage is a telling example of the trap that awaits companies that ignore this principle. From its customers’ perspective, Vonage offered a picture-perfect disruptive innovation. Customers tolerate the Internet-delivered telephony service’s occasional glitch to enjoy its flexibility and low price.

At first glance, the competitive portion of the innovation equation looks good too. Fighting Vonage off would require incumbents to sharply lower their prices. Not many companies seek out opportunities to lower their prices.

However, a closer examination of Vonage’s competitive set highlights significant challenges. Cable companies consider Internet telephony highly attractive. Growth-seeking companies like Comcast and Time Warner Cable have set their sights on the billions of dollars that reside in the local telephony market. With wires that already run into the home and strong Internet service offerings, Internet-delivered telephony is a natural add-on for cable companies.

Meanwhile, traditional telecommunications players like Verizon and AT&T aren’t sitting idly by. These companies recognize that their high, largely depreciated fix costs mean that lower marginal revenues from a customer are preferable to no marginal revenues from a customer.

As players have poured into the market, Vonage has had to heavily invest in marketing and customer service. Indeed, analysts have pounded Vonage because the bigger it gets, the more money it seems to lose.

What options are there for a would-be disrupter facing potential competitive response? One approach is to shape the strategy so it looks less attractive to potential competitors. Another tactic involves shifting to target markets that are less meaningful for existing and potential competitors. For example, Vonage could have started on college campuses or among groups of immigrants who wanted to communicate with relatives overseas.

Finally, the disrupter could seek to help the competitors win their own battles. Imagine if Vonage had partnered with cable companies to help them in their battle with telephone companies. Selling bullets to combatants can be a very profitable strategy.

The innovation game can be brutal. Create a new market and other companies flood in. Parry one threat and up pops another hungry entrant or deep-pocketed incumbent. Companies that fumble forward while vigilantly looking for ways to disarm existing and potential competitors can enhance the chances that their disruptive story will have a happy ending.

Clayton M. Christensen is a professor at Harvard Business School and the founder of Innosight LLC (www.innosight.com), a Watertown, Mass. innovation consulting company. Scott D. Anthony is the managing director of Innosight. The two co-authored Seeing What's Next (with Erik A. Roth). Innosight and IBM are currently co-leading an innovation survey with the APQC. To take the survey and be eligible to get a copy of the results, click here.



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