An effective way to come up with ideas is to start by surveying the market in a familiar industry and asking: What’s missing?
Maybe a potential demographic has been completely overlooked by industry leaders. Maybe there’s been a lack of innovation for years. You don’t have to reinvent the wheel to create a winning innovation.
The question to ask is: How can the products already out on the market be made better? Here are three ways to help you out-design your competition:
1. Examine the dominant brands.
Years ago, I wondered why the shape of the guitar pick had remained unchanged for decades. There were so few designs, even colours, to choose from. I began examining the market and it became clear to me the dominant brands were selling picks that only appealed to serious rock musicians.
Where were the picks for garage bands? Where were the picks for fans? As a result, I started a business that sold novelty picks with designs ranging from Mickey Mouse to vampires to a line with polka dots and leopard print marketed to adolescent girls.
We also targeted different stores from our competitors, including 7-Eleven and WalMart – not the typical retail environment for guitar picks, which were primarily being sold at specialty music shops.
Choose a specific market that intrigues you. Determine what the benefit of each competing product is and get a sense of each producer by visiting their website. Who are they marketing their products to? What message is their brand trying to convey?
What promises do they make to their customers? Are there any obvious holes? Has a potential demographic been ignored? Knowing what is already out there helps identify what isn’t. Use your creativity to envision alternative, superior solutions to the problem their products attempt to solve.
2. Take a good look at packaging.
Don’t underestimate the power of delivery. Packaging is an incredibly important extension of your brand, as it forms a consumer’s initial impression.
Take my guitar pick business. At the time, packaging had not been made to entice customers. Most stores sold picks in tackle-boxes that you had to rummage through to find what you wanted. Picks were viewed as tools, not as accessories or collectable items.
The competitors had successfully been selling picks this way for thirty years. I decided it would be best to package our picks individually and create counter displays to show off the designs – a markedly different approach from the competition.
3. What aren’t customers getting?
It sounds so obvious, but many entrepreneurs don’t take the initiative to find out what consumers want and like. Visit retail stores in person to observe how people interact with the products. What are consumers saying about the products they buy and use?
Read product reviews on Amazon and message boards to learn what’s working and what isn’t.
My interactions with consumers confirmed that there was an untapped market for unique, fun picks. We created a survey and asked store managers to have customers fill it out. We explicitly asked them to tell us which designs they liked best and would buy. We used what they told us to create designs that sold. There was no mystery.
Innovations can come from anywhere. But when you choose to capitalise on existing demand by out-designing the competition, you up your chances of success.
How Netflix Is Now Disrupting The Film Industry By Embracing Short-Term Chaos
One wrong move and Netflix could have been nothing more than a footnote in the history of entertainment. But by staying ahead of the curve and embracing disruption, the company is threatening some very entrenched competitors.
Attendees of the annual Cannes Film Festival are typically not afraid to be vocal in their dislike of a new film — booing and hissing are both surprisingly common — but the recent film Okja possibly set some sort of record. The crowd was booing and jeering before the film had even properly begun. In fact, all it took was the name of the studio behind the film: Netflix.
Why the animosity? Netflix is disrupting the film industry, and the traditionalists aren’t happy. After debuting at Cannes, Okja wasn’t released in cinemas. No, instead it was released right to Netflix, free to stream as long as you have an account.
Of course, few would have guessed a few years ago that Netflix would ever get into the business of making its own television shows and movies. According to industry lore, entrepreneur Reed Hastings launched Netflix because he was annoyed with the exorbitant late fees of video/DVD store Blockbuster.
Instead of having to return a movie once you’ve watched it, he conceived of a business that would ship DVDs right to your door through the mail.
It was a clever idea, but not one that seemed terribly disruptive. The whole process could be a bit of a hassle, and it required you to schedule your entertainment well ahead of time. Blockbuster even had a chance to buy Netflix, but decided that it wasn’t worth it.
The rise of streaming
Even as Netflix was hitting its stride in the early-2000s, the tide was already turning. It was becoming increasingly clear that the Internet was going to be an incredibly disruptive force, but many companies failed to notice. Or, if they did notice, they failed to take adequate action.
By 2007, the potential of streaming TV shows, films, music and books online was clear, but the DVD business was still doing well. However, Netflix decided to prepare for the future (and disrupt its own operations) by launching a streaming service. It did this by going to the traditional movie studios and television networks, and asking to licence their old content.
In the view of these studios and networks, old pieces of entertainment had run their course, so they were pleased with the new revenue stream.
This brings us back to Okja. Netflix has been creating its own content for the last few years because it realised that studios and networks would eventually catch on. At some point, they would understand that they were giving Netflix the ammunition needed to disrupt the industry. Why have Netflix stream your content if you could create your own streaming service?
“The goal is to become HBO faster than HBO can become us,” Hastings said of one of the most popular American cable channels back in 2013.
In a mere 20 years, Netflix has gone from a low-tech operation that sends DVDs through the mail to one that not only streams content online, but is also producing its own content — content from some of the most respected actors, producers and directors in the world. All of this is costing Netflix hundreds of millions of dollars, and it remains to be seen if this strategy will ultimately pay off, but betting against Netflix is risky.
Netflix has shown itself to be uniquely capable in drastically shifting its business model. Here is how Hastings explains it: “Short-term optimisation about being efficient is the death of long-term success and innovation. Building Netflix, we created a company that tolerated some short-term chaos, and we manage right at the edge of chaos. The value of that is keeping and stimulating the amazing thinkers, so when the market shifts, like DVD to streaming, or licence to original content, we have in Netflix all kinds of original thinkers, and that is the long-term optimisation that all of us in organisations want.”
SME Leaders: How You Can Manage Growth
Fresh growth is all around us this Spring – find out how you can powerfully manage growth as you provide leadership to your SME.
In the transition from start-up to scale-up, a critical factor for a growing business is the quality and strength of its leadership team.
Learning to trust and empower staff is a crucial step for SME leaders who wants to grow their business upwards.
As a business grows, one of the biggest challenges for the business founder and leader is the hand-over of an idea from the founder to the people who work there, The brand moves from being one person’s idea to being the professional focus of a whole group of people.
Without effective leadership, small businesses will be held back, more than three-quarters of SMEs provide no leadership development for their staff. What does this mean for you?
If you lead your business with vision and clarity, you set yourself apart from your competition. Here’s how.
Lead the pack
A growing business creates more work than a leader can handle alone.
As the team grows, founders often react by micromanaging the details of their business. In trying to take on everyone else’s job, the founder often leaves the most critical position vacant: strategist and vision-setting.
Learn to trust and empower others in the organisation and you will find you have room to innovate, which is critical for business growth.
Steady the ship
An effective leader will also engage others in the business to embrace and adapt to change as growth continues.
- Vision: First, plot the course for where the business should go in the short term, and the long term.
- Change: Understand what needs to be put in place to grow the business. You might need to source better business operating systems to streamline this growth, or change a few internal business processes, or rethink how you calculate your hourly rates.
- People: Growth equals change, and change equals pain, so if you want growth, budget for pain. Understand that you will need to guide and coach the staff into changing their mindset and adapting to these growth changes.
We Went up Against A Highly Regulated, Entrenched Industry. Here Are 4 Tips For Getting Your Foot In The Door
Focus on creating value, not disruption.
Multibillion-dollar legacy industries don’t make it easy for entrepreneurs to step in and create value. There are huge barriers to entry – licensing, pricing, regulations, and cultural/brand significance – that come with being around for a century or more.
However, those barriers shouldn’t stop you from innovating.
Take the utility sector for example, which is perhaps most frightening of all: A trillion-dollar taxpayer subsidized network of poles and wires set up through franchised municipal monopolies. Otherwise known as, our power and energy industry. It’s a mouthful of protection, and as a result, utilities make for a great investment (just ask Warren Buffet), since the likelihood of disruption is tough to even think about. To most reasonable entrepreneurs, the regulated utility sector, similar to the financial and healthcare industries, is tantamount to a “NO TRESPASSING” sign.
But, that is exactly what makes the effort so worthwhile. If you can successfully work with or alongside a monolith industry and produce value, instead of being focused on “disruption,” you’ll be able to achieve massive results.
When we first started trying to provide consumers cleaner and better energy options, getting to market proved difficult as we were trying to break into a utility-customer relationship (paying a power bill) that hasn’t really changed for the last half-century. But, with a clear mission in mind and the understanding that we would have to work in unison with utility providers, we were able to start making our mark.
Here are a few tips for getting your foot in the door:
1Create value, not disruption
There are some industries where the Silicon Valley catchphrase “disruption” falls flat. Some industries just aren’t meant to be disrupted in the way that people in the tech community are used to. Nearly our entire economy depends on the power grid and we couldn’t come in and totally upheave that. When you’re going after a big industry, you first need to provide value to the customer or the provider.
Show instead of tell that you have a strong customer base and that people need what you’re offering. And build relationships – working together with the big players in the space will get you much faster and better results for your company and your customers.
2Focus on the customer experience
When you’re a startup, you already have the advantage of being years ahead in your digital experience compared to traditional companies in your space. Own that and hone in on it to make it the best customer experience possible. We looked across sectors to bring modern design, UX and data elements to the home energy experience.
Traditional companies aren’t necessarily thinking that way, and you’ll win people over by offering self-service customer tools, easy payment options and notifications they actually understand. Good communication with your customers goes a long way.
3Start small, build toward the vision
A lot of start-ups begin with very lofty goals – disrupting whole industries and changing the entire way a process is done. We certainly had a broad vision to be the trusted home energy advisor for everything from solar to batteries. But, you’ll never be able to achieve anything if you try to tackle everything all at once in a highly regulated and old-fashioned industry. Instead, to get started, focus on one thing.
For us, it was offering clean energy via renewable energy certificates (REC). By starting small, you’ll be able to learn about and understand the space you’re going into, and will be able to see if there’s a market for what you’re offering. As you learn, you can slowly expand step by step and tackle more complex products in the industry.
4Use best practices from other innovative industries.
No industry has a monopoly on good ideas, and the boom in direct-to-consumer brands across apparel, food, finance and healthcare provides a great roadmap for how to build a modern customer experience. Look to other industries that have been there and done it. For example, Mint.com has created an innovation through the consumer interface – in their case to manage finances – while leaving the existing banking and credit card infrastructure in place.
While the thought of breaking into an established industry is definitely intimidating, in today’s entrepreneurial environment it is definitely possible and innovation is desperately needed. Success depends on the ability to shed your typical idea of disruption, and stay patient and persistent.
This article was originally posted here on Entrepreneur.com.
- R33 Million Boost For Job Creation And Innovation In SA
- Win A Business Makeover With Retail Capital To The Value Of R250 000
- How Investors Can Take Advantage Of The Rand’s Currency Trading Rates
- Start-ups Require A Strong Legal Foundation Webber Wentzel Ignite
- Enhance Your Entrepreneurial Flair With An Online Postgraduate Diploma From The University Of Pretoria
- How To Optimise Your Productivity After Quitting Your Job
- Jason English On Growing Prommac’s Turnover Tenfold And Being Mindful Of The ‘Oros Effect’
Start-up Industry Specific2 weeks ago
How Do I Start A Transport Or Logistics Business?
Entrepreneur Profiles1 month ago
10 SA Entrepreneurs Who Built Their Businesses From Nothing
Upstarts4 weeks ago
10 Young Entrepreneurs Under 30 Share Their Start-Up Secrets
Business Plan Advice4 weeks ago
Writing a Business Plan May Not Be Your Idea Of Fun, But It Forces You To Build These 4 Crucial Habits