Is Innovation Important for Business Success

[vangogh]

Yesterday I came across an interesting article, Don't Innovate, Imitate (http://www.fastcompany.com/3000595/dont-innovate-imitate), from Fast Company. We often get questions here from people worried about how they'll protect their ideas. The thinking comes across as though success is dependent on being the innovator, being the first to market with the original idea. Is that really true?

The article looks at two companies, Loveflm and Netflix. Lovefilm is a European company with the same business model as Netflix. While Netflix spent years working out their subscription model for DVDs (initially you paid per movie), Lovefilm saw the later subscription business model, copied it, and is doing well.

A couple of quotes found interesting


Inventors create the technology, but entrepreneurs turn it into something of economic value.

This second quote is the gist of the article


Many successful entrepreneurs have built great businesses by doing what someone else has done, only better. This demonstrates that originality in entrepreneurship is actually an over-rated virtue. Imitation, on the other hand, is not just the sincerest form of flattery. It is one of the shrewdest ways to become a successful rebel entrepreneur.

I know you can find plenty of examples of people who invented something new and built a successful company around it. Is it the rule or the exception? It seems like many more successful companies did so through imitating the first mover. The take away is that you shouldn't feel like you have to invent something new to succeed, but to look where others aren't getting it right and improve on what their doing.

What do you think?

[cheryl]

I do agree. I've seen a few examples of businesses lately where I know the next reincarnation will be better than the last.
In particular, where businesses that were small and had found a niche become more popular, start to forget the core values that made them what they are and begin to change their direction. This has happened a couple of times lately, and each time a new business has risen in place to take over the niche market that the business left behind. Being new, and young, they're able to listen to the audience and redevelop the kind of ideas that made the first business a success, but usually with the base strategy down they can work on improving the existing model.

I like that, but I'm not keen on seeing exact copies of businesses. I generally like to see a business innovating OR jumping on when someone else leaves. As a writer, I don't have to worry about innovation so much - it comes through natural skill and ability. There are thousands of writers around the world, all able to work for the same clients, but ultimately it's our skill and our ability that sets us apart from others. We don't have a shortage of clients. Everyone needs content, and more and more people are realising that it's important to call in the professionals. On one hand, that's great because it also means I can network with other writers and even give away a few tips and tricks without being worried about competition. After all, nobody can copy my years of experience and knowledge based on one tip. On the other hand, it does mean I rely on effective marketing rather than a 'nice new shiny idea'.

[KristineS]

I think you see this in a lot of industries. Take the industry in which I work, garment decoration. We sell supplies for garment decorators. We have a few products others don't have, but essentially we're selling what everyone else sells. Where we've differentiated ourselves is in speed of service and the fact that we only sell products that we also use. The speed of service, whether it's shipping or replying to a question has earned us lots of satisfied customers because most companies take longer and people are tired of waiting. The fact that we use what we sell has also positioned us as the go to company if you need help and information and we've been able to convert many of the people with questions into customers.

So, we didn't start out with a new product, but we were able to offer things in addition to the products that set us apart.

[vangogh]

I like that, but I'm not keen on seeing exact copies of businesses.

Yeah I wouldn't want to see exact copies either. I don't think that's what the article was suggesting though. I think it's more that you improve on what someone else is doing. Company A invents a new product. Company B sees how it could be better, makes it better, and ultimately has the better selling product.


So, we didn't start out with a new product, but we were able to offer things in addition to the products that set us apart.

I think that's the more common route to success. It's not that I think you shouldn't innovate. That's the more interesting part to me in many ways, but it's the company that does it best, that gets it right, and offers what the market wants that's most successful. No one really cares who invented the thing. They just want the one that works for them.

I think being the innovator can give you a market lead and if you can continue to improve on what you've done you can stay as the market leader, but that first quote I posted suggests the skills for inventing something aren't the same ones needed for making money from the invention. You see a similar thing where someone creates a new business that takes off and then gets replaced at the top when the company starts to mature. The skills that were required during start up are different than the skills required beyond.

[billbenson]

Well think about the cell phone. Mobil phones prior to the cell were large transponders that were powerful and sent a signal a long ways. You can see rich people talking on car phones in old movies. Somebody got the bright idea of putting cell towers or transponders closer together so the phone didn't need to be so big and powerful. Somehow this slowly migrated into towers being all over the world and cell phones getting smaller. Meanwhile, miniaturization was going on in electronic circuitry making the phones smaller. Then better circuitry and newer ideas improved the capabilities of the cell phone into what we have today.

If the word innovative in this thread means inventing something new, this is a classic example of the opposite. It's just adding value to what already exists.

[Harold Mansfield]

None of the leading companies today were the first to do what they do. They just do it better or perfected it.

Amazon, GM, Apple, Microsoft, Samsung, Google, HP, Facebook, Motorola and on and on. None of them were first. And many of them license patents from the companies that were the innovators...such as Motorola.

If there is anything I learned from watching Shark Tank, it's that the money is in the licensing.

[kimoonyx]

Geographic location... presents an amazing opportunity to make loads of money by just porting an already successful idea to a new market. Having the good fortune to be well traveled I have witnessed this time and time again, to the extreme of even specific brands literally copied logo and all and erected in nations on continents external to the parent brand and launching a crushing presence. The notion that an idea can be owned by its conceiver is novel, but not realistic, and certainly not the practice. In my idea the best an innovator can hope for is some kind of royalty once an idea is released to the public.

In school I saw a very interesting case (forgive me I cant remember the names) where the creator of a type of package for carrying (bagging) drinks in South Korea had local and international patents on his idea, and was generating handsome royalties on the sale of the packaging (essentially a plastic bag with a divider in the middle to slip cups into and when carried they remain upright. A Chinese traveler, copied the idea and began to make money off of the idea in the exact same way. The South Korean investigated and was able to prove that the "other" guy had stolen the idea from him. The Chinese government at the time was defending itself from these types of accusations and ordered the national to pay royalties of his sales to the South Korean. The Chinese Business Man simply began to sell his version of the packaging to companies in the Philippines and Japan outside of the reach of this regulation and continues to this day to be successful and has surpassed the sales of his south Korean competitor. We watched a video interviewing both gentlemen and admittedly the genius of the Chinese businessman to me was impressive. He saw a product that was ingenious, and offered it to other areas that had a need for it, and has cleaned up.

To me, this is an excellent way to make money. sometimes a businessman's ability to connect the dots is what makes him truly innovative.

[vangogh]

If the word innovative in this thread means inventing something new, this is a classic example of the opposite. It's just adding value to what already exists.

I think that's how the article I linked to meant it. Your cell tower example I would see as building a better mousetrap as opposed to inventing the mousetrap. It's an interesting topic I think. Sometimes the innovation is in making something better. I think a lot of the improvements that make something better are innovation, though maybe not when compared to the original invention.


None of the leading companies today were the first to do what they do. They just do it better or perfected it.

I think that was the main point of the article. Most of these companies took the ideas of another and figured out how to make them work for the market. I guarantee all the companies you mentioned would describe themselves as innovative and in many ways they have been. Most of their success though comes from improving on the ideas of others.


To me, this is an excellent way to make money. sometimes a businessman's ability to connect the dots is what makes him truly innovative.

I agree. Again I think the article meant innovate in a different way, but I'm with you in connecting the dots sometimes being the innovative part. Good example too and good point about bringing an idea to a new market. Geography is one way. There are others.

[Wozcreative]

I've heard that there is kind of a rule of thirds when it comes to making a business successful. It's not so much the invention, but how you make it work. The rule of thirds is that you need to take an existing idea and build upon it. Often times it's the third time it is attempted, that sticks. For example: Friendster (first to do it), Myspace (Second best), Facebook (third, to do it, but made it stick). Google is the same way with WebCrawler, Yahoo, and google. Take a business that did "ok", and run with it, and make it better.

[BNB]

Innovation and imitation are equally important. Nearly everything we do in life is learned one way or another, there is nothing wrong with imitating as it's just a way of learning. I constantly look for people who are better than I am, and see what they are doing better and apply this to my business.

However, I have had a lot of success in innovation - whether through unique processes or products, pricing structures, etc.

Someone good in business will know exactly when to innovate and when to imitate and apply this to their unique situation.

[vangogh]

a rule of thirds

Every time I hear rule of thirds I think of grids, usually overlaid on my camera's screen. I must spend too much time designing. :) With your examples I guess it's third times the charm.


Someone good in business will know exactly when to innovate and when to imitate and apply this to their unique situation.

Good point. Even though I posted the article pointing to imitation being more important, I do believe both are important. I think you're exactly right that there are times when each one makes more sense and part of success is knowing which.