I have a friend who says that almost everything that is going to be invented has already been invented. I’ve never invented anything (except maybe a new excuse or two for missing deadlines, like I did with this blog post) so I’m not one to pass judgment on the state of invention in the 21st century. I’m guessing that folks at places like Apple or Samsung would argue this point.
What I have noticed in recent years, what seems to me to be a growing trend, is a shift in focus from making new things to connecting and consuming existing things that results in something new and exciting. That sounds a bit esoteric, so let me give you an example.
The story of Netflix, is a story of innovation – but a different kind of innovation. Think about it. Netflix didn’t invent movies, they didn’t invent the post office, and they didn’t even invent DVD’s. What they did invent was a new and innovative consumption model for video, distributing DVD’s through the post office to your mailbox, for a monthly subscription fee. You could watch the video you wanted without the trip to the video store. But Netflix wasn’t done. They didn’t invent the internet or video streaming either, but they took advantage of increased bandwidth and download speeds on the web to create another consumption model. Now you don’t even need to go to your mailbox, and you can get the video you want, when you want, on almost any device you want.
Netflix is a story we’re all familiar with, but there are thousands of innovative companies leveraging recurring revenue models, new technologies, and the Internet of Things, which change the way we consume everyday products. New companies like Mozy, Red Hat, PeopleMatter, Globalstar, Birchbox and ShoeDazzle and some old standbys like Toyota, Ingersoll Rand, Phillips and Apple. All of these companies have redefined distribution and consumption models to create new services and reach new customers, and often with existing products.
So what does it take to become an innovator in this brave new world? If you look at the stories of these companies, you start to see some common traits; creativity, market awareness and boldness immediately come to mind.
It almost goes without saying that the starting point is a creative idea. Most new business ventures start with someone saying something like, “What if we did this…” or “How do I solve this problem…” or “I see a need that is underserved…” That’s the beginning of a creative process that ends in a new product or service. But creativity doesn’t necessarily lead to success – lots of creative ideas end up dead and buried at the side of the road.
That’s where market awareness kicks in. It’s not just awareness of the current market; it’s an understanding of where the market can go. At some point, someone at EMC realized that if there was a huge market for off-site backup for corporate clients, there was probably also a market for personal and small business users. Given how convoluted home backup processing was 10 years ago, once someone followed through with the creative idea, the concept for Mozy probably seemed like a slam dunk. Turns out they read the markets correctly, and today have over 6 million clients and store over 90 petabytes of data. As they say on their web site, a petabyte is a lot of data.
The third trait is boldness. It takes boldness to be first. In the back of my mind I can hear William Shatner talking about companies reaching out, “to boldly go where no company has gone before.” (Trekkies, you’re welcome). PeopleMatter was aware of the market, knowing that there was an unserved need for recruiting, background checks and other HR services for hourly service industry employees. Traditional employment and recruiting services were too pricey to add value in this space. PeopleMatter defined a new consumption model. They boldly stepped out to provide services where no company had previously gone, and now they’re the leader in what has turned out to be a very lucrative market – a market that barely existed before PeopleMatter jumped in.
Who are the innovators? For our purposes, they’re the ones taking strategic advantage of consumption and monetization models to tap new markets and create new revenue streams for their products. Why do we care? Because we can all learn something from them. Perhaps you should be looking to join some of the innovators above. Can you reach new customers via consumption and distribution models? Where can you boldly go, that no one has gone before?
– Bob Harden