In the never-ending quest for innovation, companies of all sizes focus their combined knowledge and experience on generating big ideas that could translate into competitive advantage.
Unfortunately, bright ideas have a tendency to blind us from reality. While enterprising companies introduce an impressive and steady flow of new products and services, bankruptcy records and clearance sales document the roster of unsuccessful innovations.
Look closely and you’ll find boundless creativity in the development of innovations. You’ll also find a baffling repetition of proven methods to mess them up. History repeats itself, especially in business. Improve the odds of succeeding with your own innovative ventures by learning from the mistakes of others:
1. Evolution isn’t a one-time event.
Polaroid Corporation, founded in 1937, first caught the public’s eye by manufacturing polarized sunglasses that block glare without casting the world into darkness. In 1948, Polaroid introduced the first instant camera and prospered for the next 40 years.
Throughout the 1990s, Polaroid sales shriveled as one-hour photo shops spread quickly. The company never found comparable success with other product lines. Rendered obsolete by the emergence of digital photography, Polaroid filed for bankruptcy in 2001.
Lesson: As an entrepreneur, you must ensure that your small business adapts more than once. It’s still survival of the fittest.
2. Beware of technology’s bleeding edge.
Introduced in 1993, Apple’s MessagePad was the first personal digital assistant (PDA). Better known by the name of its operating system, the Newton™ was bulky and pricey, starting at $700. As a symbol of technology’s advancing hold on American life, the platform was an easy target for the “Doonesbury” comic strip, which envisioned Newton’s handwriting recognition turning a test sentence into nonsense.
Discontinued in 1998, the Newton truly was ahead of its time. Probably too far ahead. For most people, it felt more like science fiction than a functional device. However, Newton set the direction for subsequent generations of PDAs and smart phones — not to mention Apple’s latest innovation, the iPad™.
Lesson: Sometimes it’s better to be first to market with reliable technology rather than the latest gizmo.
3. Does it fulfill a defined need?
It’s a personal communication and collaboration tool. It’s an online software application product, designed to merge e-mail, instant messaging, wikis and social networking. It’s a real-time computing platform and communications protocol supported by a host of extensions. It’s a floor wax and a dessert topping! It’s Google Wave. When the Web platform debuted in May 2009, the press declared it an “overhyped disappointment.” Users struggled to figure out how to use it and how it related to their daily lives. Add to that a few privacy issues, and Google Wave has made barely a ripple to date. While the application does hold promise, Google has failed to convey that promise to everyday people.
Lesson: Make sure your new product or service targets an immediate need — one that your customers understand.
4. Be true to your brand.
As a leading manufacturer of firearms, Smith & Wesson works closely with law enforcement agencies. That relationship led the company to begin producing a line of mountain bikes for law enforcement and public safety in 1997. After five years of growing popularity among bikers with badges, Smith & Wesson decided to offer its mountain bikes to the general public. Befuddled consumers couldn’t make the connection between guns and spokes, resulting in stunted sales.
Bad things can happen to good brands that slap their name on unrelated products. Brand names have the power to create acceptance of new products within their established category. On the other hand, brand extensions lacking an obvious connection are likely to debut with a thud. Want more proof? On your next shopping trip, try to find Frito-Lay lemonade or Bic underwear.
Lesson: Your brand carries weight only if new offerings are natural extensions of what it does best. If you discover opportunity in another field, consider a different brand tailored to the new venture.
5. Gauge the potential market.
In 1998, Iridium telecommunications service launched 66 linked satellites to support the first phones able to call anywhere in the world. A grand idea made possible by an estimated $6 billion investment in its satellite network.
Nine months later, Iridium was bankrupt, its satellites left circling the globe in silence. The problem was that the company’s investment far exceeded what the market could support. In the first six months, only 10,000 customers were willing to pay $3,000 for a clunky satellite phone and up to several dollars per minute for calls. The rest of us didn’t need satellite technology to phone home or most civilized places on Earth.
Lesson: Do the math. If potential revenue from your likely share of the total market doesn’t cover the cost of developing a product or service, it’s likely not worth the effort.
Business and innovation make a lovely couple — when the innovation is backed by smart business practices. Follow a strong business plan and you should have no fear of failure with your next big idea.
Jon Holten is a writer, an editor and a custom publications consultant based in Bloomington, Minn.
American Express OPEN and FedEx have teamed up to provide discounts and a comprehensive resource for shipping, business and print services. To learn more, go to http://www.fedex.com/opensavings.
OPEN Savings®: Payment must be made with an American Express® Business Card at the time of purchase; savings will be credited to your account. Other restrictions and limitations may apply. Subject to offer terms and conditions located at opensavings.com. Merchant participation and offers are subject to change without notice.
