In our last blog, we explained what innovation is. The focus of this blog is explaining why you need to introduce innovation into your business. Whether you’re a startup founder, entrepreneur or member of a corporate innovation team, the ability to successfully innovate will help you to survive and hopefully thrive in your markets.
You will lose to competitors if you don’t innovate
We live in the era of digital disruption.
‘Innovate or die’ has become a mantra for many organisations, both large and small. In the age of technology, competitors and customers aren’t bound by geographic constraints like they were in the past.
Competitive threats can potentially come from all around the world in many industries. Consumer behaviour and expectations are also changing rapidly.
Organisations that don’t innovate and keep pace with market developments face extinction. They will lose their customers to businesses who embrace innovation and better cater for their needs.
Innovation can disrupt industries
Innovations from competitors can disrupt the operations or individual organisations as well as entire industries.
Here are two high profile examples of large organisations that have been the victims of successful innovations by either new or established competitors that have changed the way their industries operate.
Kodak was one of the most successful companies of the 20th century, regularly appearing in lists of the world’s most valuable brands. It began to struggle financially in the late 1990s. The growth of digital photography significantly reduced consumer demand for the photographic film products that had previously generated the vast majority of Kodak’s revenue.
The company filed for bankruptcy in 2012.
Amazingly, Kodak had invented the world’s first digital camera in 1975. But it shelved the product for fear it would damage its photographic film business. That fear eventually proved correct, and a number of competitors like Canon, Sony and Nikon led the way in exploiting the digital camera market opportunity, instead of Kodak. In turn, digital cameras were largely usurped by innovations that enabled smartphone users to take high quality images and transfer them quickly to social media platforms.
Borders Group were a major global book and music retailer that began operations as a single store in 1971. It expanded to thousands of stores in countries all over the world over the next four decades.
However, from the late 1990s it began to experience declining sales in its ‘bricks and mortar’ retail stores. Sales were affected by online retailers, like Amazon as well as the development of e-book technology. These developments enabled printed books to be despatched to anywhere in the world within days or e-books to be downloaded instantly.
Borders ultimately filed for bankruptcy in 2011.
It was a stunning fall from grace when you consider that when Amazon sold their first book in 1995, Borders’ annual sales were $1.6 billion.
Companies that have successfully innovated
Take a look around at the most successful companies in the world today. Many of them didn’t even exist two or three decades ago, like Google, Netflix, Facebook, Amazon, Tesla and Airbnb. What they all have in common is that innovation has been crucial to their success.
Takeaways from successful CEO/startup founder innovators
Elon Musk: “Failure is an option here. If things are not failing, you’re not innovating enough.”
Bill Gates: “Innovation is moving at a scarily fast pace.”
Mark Zuckerberg: “People think innovation is just having a good idea, but a lot of it is just moving quickly and trying a lot of things.”
Sergey Brin: “Too many rules stifle innovation.”
Brian Chesky: “A company’s culture is the foundation for future innovation. An entrepreneur’s job is to build the foundation.”
Jeff Bezos: “My view is there’s no bad time to innovate.”
How you can learn more about innovating successfully
Introducing innovation to your organisational culture will be the focus of our next blog.
In addition, Netflix co-founder Marc Randolph is speaking at two events hosted by StartCon in September 2018, one in Sydney and one in Melbourne. At these events you can hear first-hand about innovation from one of the world’s most successful entrepreneurs. You’ll also have the opportunity to ask Marc questions or even participate in an exclusive small-group meeting with him.
Although best known for founding Netflix, Marc has founded more than half a dozen successful start-ups over the past four decades, with his ability to recognise and exploit opportunities for innovation being pivotal to his success. He has also mentored hundreds of early-stage entrepreneurs and invested in many successful tech ventures.