A large part of success, both in business and more generally, comes from innovative ideas. Ideas come from a wide array of places. Movies would have us believe that these ideas come directly from the mind of geniuses, usually from a ‘Eureka’ moment. Unfortunately, Hollywood sometimes plays fast and loose with the truth, and this is one of those cases.
Important ideas don’t usually spring into existence all by themselves. Generally the process that gets an idea from conception (having the idea) to market (selling the idea) is more like passing on the idea, refining it and improving it, then having the idea all over again. More than that, ideas are shaped properly by people with the capability, capacity, time, contacts and creativity to turn it into a business proposition.
Yes, they have a starting point with a single individual, but they are the end result of many discussions and considerations between people with different backgrounds, knowledge and experiences. They each add their own ideas which link together to form a chain, which can in turn be used to perform an action in the real world.
What exactly is Innovation?
“Innovation is the process of translating an idea or invention into a product or service that creates value or for which customers will pay.
To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. In business, innovation often results when ideas are applied in order to further satisfy the needs and expectations of the customers.” – Business Dictionary
Know Thyself – Understand Clearly What You Have and What You Want
The quality of an innovation is judged on its replication at economy (or scale) and its ability to satisfy a single or set of needs. A good entrepreneur gets ahead by understanding that individuals are critical to forming links in the chain and each person builds strength in taking the idea to the next step. The next step, in the business sense, is building a concept which can be conveyed simply and realistically to another person – an investor. They have capital to get the idea to the place it can be sold.
There are good and bad Entrepreneurs in the world. Those who are skilled and successful are those who recognise the power of ideas specifically in generating money. They are adept at spotting the potential to generate sustainable income. They are also masters at seeing flaws in their products and services, and are able to expand by using opportunities and recognising blockers – those things which could halt progress. They often think methodically and are honest with themselves, and ask others to be honest with them in return.
A SWOT Analysis is a business term used to describe a methodical approach to evaluating business ideas. It encapsulates the ability for a business to bring an idea to the market.
What advantages does your organization have? What do you do better than anyone else? What unique or lowest-cost resources can you draw upon that others can’t? What do people in your market see as your strengths? What factors mean that you “get the sale”? What is your organization’s Unique Selling Proposition (USP)?
Consider your strengths from both an internal perspective, and from the point of view of your customers and people in your market.
What could you improve? What should you avoid? What are people in your market likely to see as weaknesses? What factors lose you sales?
Again, consider this from an internal and external perspective: Do other people seem to perceive weaknesses that you don’t see? Are your competitors doing any better than you?
What good opportunities can you spot? What interesting trends are you aware of?
Useful opportunities can come from such things as:
- Changes in technology and markets on both a broad and narrow scale.
- Changes in government policy related to your field.
- Changes in social patterns, population profiles, lifestyle changes, and so on.
- Local events.
What obstacles do you face? What are your competitors doing? Are quality standards or specifications for your job, products or services changing? Is changing technology threatening your position? Do you have bad debt or cash-flow problems? Could any of your weaknesses seriously threaten your business?
2. Know Everything Else – Get To Grips With The Innovation Lifecycle
Entrepreneurs that get ahead also understand that innovation has a specific lifecycle. It has a trend over time, which follows a curve which can be tracked, especially if their product is new. This means they are able to spot if their product or service is on the right track or changes need to be made.
This kind of graph, while quite a good general representation of the innovation lifecycle, differs slightly for every business. What good entrepreneurs realise however, is that while this type of graph is a good measure of success, it fails entirely to consider the likelihood that some innovations are better than others, and indeed that many potential innovations simply do not succeed.
Very often, a new product or service will face issues or require changes in the early stages to become a commercial success. This is called maladaption. In these cases the graph looks more like this:
3. Know What The Market Wants – Talk To Your Customers
The way good entrepreneurs get ahead is by always trying to ensure they are responding effectively to ensure their idea is properly adopted. This process takes careful attention and research but it also means stepping back and allowing things to run smoothly if things are going well. This can sometimes be difficult for entrepreneurs who want to be constantly improving or updating their ideas. It can also be difficult if a company grows too large too quickly and cannot change their product or service to meet consumer or market demand.
The best way to understand whether things are going well or need adjusting is using market research. Back in the 90’s this would often mean using a focus group to get responses and change obvious features, but with the age of the internet and the ability to get instant feedback, and with most new products and services having a digital aspect, it makes sense to utilise this tool instead.
There are now dedicated company who can field test products and services. Using this route, companies can also test different locations and cultures, testing them to see where the opportunities might be and understanding how to meet any negative feedback.
The internet can also give insights into other technologies and academic findings that can complement any solution, especially digital solutions, for almost no cost. The only downside is that innovation can fundamentally change the world, turning stable markets become volatile arenas, where a company or idea can gain huge ground, and swallow (or sink) profits from other areas.
4. Understand Responsibility – Know That Actions Have Consequences
Good entrepreneurs understand that, like Prometheus, those who blindly give fire to the masses will be punished in the long term by the world. Turning a highly profitable market into one which has a completely free alternative, such as happened with the music industry, the news media industry and the publishing industry, means you will be sure to create powerful enemies.
While new technologies or ways of doing things may seem like a radical and therefore important move – blindly releasing a product or service that offers widespread change without considering the consequences can destabilise the foundations of a market and remove other investment from the area. Good entrepreneurs understand that ethics and reasonableness are important in business, and understand that their projections about profit are based on stable markets – if the market investment vanishes, so too does the stability in that market. It can also force other companies to become more threat focused and actually increase the number of risks which the business faces including legal challenges.
“We live in a society where technology is a very important force in business, in our daily lives. And all technology starts as a spark in someone’s brain. An idea of something that didn’t exist before, that once they have invented it —brought it into existence — could change everything.”
– Nathan Myhrvold, CEO, Intellectual Ventures
This idea, that technology has the power to change ‘everything’ is perhaps why we are becoming so brave and bold in pushing these technologies into new undiscovered places – challenge is important for creating a competitive environment where quality and integration increases.
More than that, the sensible introduction of new technologies rather than the destabilising nature of non-profit focused technologies can ensure people keep their jobs and entire industries do not get decimated overnight.
5. Accept The Need to Proceed – Know That Change is Inevitible
The most well understood thing about innovation is that it is not an option. It must happen. It can either happen from the top down, or from the bottom up, but either way progress must be made. The idea that consumers demand new products and services is well understood, but the idea that the stickiness of a product or service also contributes to success is also a factor.
Nir Eyal, writer for TechCrunch, Forbes and Psychology Today is a specialist in this area. He believes the requirement for significant change through innovation is not simply a case of a product or service being ‘better’. To stick, and to continue being successful, an innovation must form a habit.
“A company can begin to determine its product’s habit-forming potential by plotting two factors: frequency (how often the behaviour occurs) and perceived utility (how useful and rewarding the behaviour is in the user’s mind over alternative solutions).
Googling occurs multiple times per day, but any particular search is negligibly better than rival services like Bing. Conversely, using Amazon may be a less frequent occurrence, but users receive great value knowing they’ll find whatever they need at the one and only “everything store.”
― Nir Eyal, Hooked: How to Build Habit-Forming Products
When we compare something new directly against something we already understand, we can immediately see the benefits or downsides. This is called the framing effect, and depending how its used it can be useful or extremely detrimental to a product. Good entrepreneurs understand how to use elements like this to instantly demonstrate why their product or service is a stronger long-term alternative and why it better meets the needs of consumers or clients.
People have a limited amount of cognitive ability and it is very rare. If you are bringing in a new change, it is unreasonable to expect a customer or market to spend all of their energy to learn something completely new. Instead, good entrpreneurs know that in order for real change to happen, it needs to give people the ability to expand their potential and grow what they already know rather than starting from scratch.
How Good Entrepreneurs get Ahead – A Summary:
- Innovation does not always come from an individual having a ‘Eureka!’ moment – it often comes from discussing, refining and improving ideas with other trusted individuals.
- The innovation lifecycle is a simple chart based on perfect circumstances. Life is rarely simple, and never perfect. Adjustments to approach will be necessary.
- Understanding what people want and how to achieve that aim while making a profit is the single most important task that an entrepreneur will undertake.
- To work an innovation must successfully solve a problem. To stick, high frequency of use of the product / service must be exceptional compared to others.
- Many companies, and the employees within, recognise that one of the most important ways for their business to grow is technological innovation, yet not many of them actually do it.
- Commercial success often requires complimentary inventions or production methods to make a new product or service viable. Timing is a crucial aspect of any innovative business.
Have an idea? Get it to your market – FAST!
Testing the potential for new ideas is a complex and multi-faceted process, but it becomes simple when a business has a knowledgeable digital team behind them. KJL work with companies to take their ideas to market fast, offering a fast-turnaround service for existing companies to create brands and test innovative products and services.
Using our Business Setup package, we are able to fast-track the creation of a business website, logo, branding, social media, advertising and a wide array of additional services. We created this process specifically for those who hold the entrepreneurial spirit and have an innovative idea that they fully believe in.
We offer this service because we love bringing ideas, especially important ideas, to life.