A top, seasoned tenor, Stéfan Louw announced his plans to come up with a new opera company to help bring back the “mysticism” and “singing excellence” of opera. He has named his company Big Wig Opera – because he is so tired of pretentious names that no one understands – and will operate from the Roodepoort Theatre. He has already produced “The Tragedy of Werther” at Roodepoort and hopes to do bigger productions in 2015. Continue reading “Even the top opera singers are in search of new business models”
Start-up businesses differ from existing, established small businesses in that they are still in search of a sustainable business model. This means that a start-up owner has to deal with inevitable failure because not every business model they try out is going to succeed overnight.
One commentator recently said that experts say if a start-up is going to fail, there are two options – it needs to fail fast or learn faster. This may sound cruel or harsh but really all it is saying is that a business needs to learn faster by pivoting, a concept from the lean start-up movement. The business really needs to redesign or change its product or service and go into a different direction where there are better opportunities. Continue reading “How does a start-up owner deal with failure?”
I remember a guy who used to talk about finding “the perfect thing”. He was always talking about coming up with an idea for a product or service and a selling method that would enable him to achieve a lifestyle he had dreamed of.
Slowly he began to form his concept and eventually came up with the idea for a security product in a can. Similar products on the market were not that effective so the entrepreneur obtained various ingredients from the United States where the product was used extensively and was legal. Continue reading “Are you searching for the perfect thing?”
The world’s first mass-produced hardware MP3 player was created in 1997 by Saehan Information Systems, which sold its “MPMan” domestically in 1998. In mid-1998, the South Korean company licensed the players for North American distribution to Eiger Labs, which rebranded them as the Eiger MPMan F10 and F20. The flash-based players were available in 32 MB (about 6 songs) storage capacity.
Saehan was the originator and innovator of this breakthrough new product. But look what happened next. In 2001, Apple Computer unveiled the first generation iPod, with far more memory and a new business model. The company took a product already on the market and radically transformed it. The rest is history.
Researchers have found that imitating products and services can be even more valuable than inventing something new. A researcher who has delved into copycats found that almost 98% of the value generated by innovations is captured not by the innovators but by imitator.
Why’s this? Well, the original idea often faces a hard battle because of the investment it takes to educate potential customers about the benefits of the product or service. Then there’s selling and distribution which requires deep pockets. And without scale, which larger companies are usually much better equipped to handle, manufacturing costs keep the product at a high price making it accessible mainly to a high-end niche market. The costs of imitation are typically 60-75% the costs of innovation.
Pathfinders face the hardest road to market. This old saying pretty much sums it up: “You can always tell who the pioneers are because they have arrows in their back and are lying face down in the dirt.” Pioneers have arrows in their backs but fast followers often have the advantage. Half the pioneering startups entering new markets fail. Fast followers enter much later than the pioneers but achieve far greater sustainable success. Pioneers, who create new markets, generally end up with around 7% of the markets they create. Copycats secure the balance.
Imagine a world in which there are no longer pimps and madams taking their middle cut of the business. Hard isn’t it? Well, some pundits believe these “jobs” will virtually disappear because of disruptive technologies and innovation. Craigslist and other online services, where workers can transact business direct with customers, will chop the middle person.
With the recession, job cuts and dynamically changing markets, many jobs have begun to go into decline or disappear. In the office, filing clerks, typists, telephonists and secretaries have been disappearing. So, too, have assemblers, metalworkers, toolmakers, sewing machinists and printers in the industrial and manufacturing sectors.
Over a long period disruptive technologies and innovation have all but wiped out microfilm professionals, photo lab technicians, photo-typositors, typesetters and stenographers.
Who’s next? Bookstore owners, bookbinders, meter readers, webmasters, flight booking agents, printers and print encyclopedia personnel?
Disruptive technologies and innovation can also lead to new jobs and careers. Some of the job titles predicted for the future may sound strange but think how weird web designer must have been for many in the 1990s. Green jobs may include a “cloud controller” (someone who helps clouds reflect solar radiation), “simplicity consultant” (a person who simplifies and streamlines processes, products and services in companies) and bioinformationist scientist (who combines genetic information with drug development and clinical techniques). Already bioformatician is a job description used in pharmaceutical companies. Continue reading “The dark side of disruptive technologies and innovation”
I’ve been hearing a lot about disruptive technologies lately … at conferences, from small business owners in the web hosting and web design business and companies seeking business advantage in green products.
We’ve all seen technologies such as microwave ovens, memory storage and the Internet change our world whether as consumers or in businesses.
What exactly are disruptive technologies and how does this term differ from disruptive innovation?
Disruptive technology refers to new technologies that provide better performance than existing technologies or replace them. A simple example is that of seven-single records that were replaced by CDs and then by MP3s.
Disruptive innovation is any innovation whether technological or a business model that leads to the creation of a new market. Another simple example: cars were a technological innovation initially but were expensive and a luxury. But the disruptive innovation came about through mass-production of low-cost vehicles, the Ford Model T being the first, which revolutionised personal transport.
Most businesses are focused on incremental improvements, making existing products better, rather than introducing breakthrough products and services. When these larger businesses introduce their improved products and services, they usually aim at selling to their demanding base of existing customers to keep them. Examples could be high performance cars, higher spec smartphones and photocopiers with fast speeds and print-like quality.
A dog day care business faced stiff competition with similar businesses starting up. The owner decided to introduce new services such as caring for older, sickly pets, offering on-site vaccinations and placing webcams in the facility so owners could check their pets anytime. This innovation helped the business expand from 11 locations to 100 franchise outlets and wholly-owned shops.
The perception exists that small businesses are not as innovative as larger companies. Yet while this may be true for common village professionals like shopkeepers, real estate agents, plumbers, lawyers and doctors, many small business owners are highly innovative.
Why is innovation so important to small businesses? Continue reading “How do you turn your small business into an innovation machine?”