What happens when the sharks spot your new business idea?

English: Great white shark at Isla Guadalupe, ...
 (Photo credit: Wikipedia)

The shark spotters have spotted sharks in False Bay with the authorities confirming that they had spotted a shark near Fish Hoek beach. One of the shark spotters says when you see a lot of bird activity, seals or dolphins in the area this means there are fish about that attract the sharks.

The small beach of Fish Hoek has been struggling over the past few years because of the number of sharks that regularly enter the bay. Media coverage of shark attacks, which have occurred between Clovelly and Jagger’s Walk along Fish Hoek beach, has been prominent. The number of shark sightings and shark attacks led to the Western Cape authorities to introduce a shark net for the first time at Fish Hoek beach. Only time will tell whether these measures are effective. Continue reading “What happens when the sharks spot your new business idea?”

Pioneers get arrows in their backs while copycats steal the lion’s share of the market

the shot
the shot (Photo credit: buddhasit)

I am trying to dispel the myth that brand-new, original products are the only thing for the start-up or small business owner. I risk being shot down by the innovation priests who turn up their noses at copycats but pirating ideas is the backbone of small business.

I probably shouldn’t even bring this up but a lot of small businesses use imitation as their main business strategy. Take a look around your local business community and see how pervasive copying really is.

Some examples: holiday accommodation, computer stores, antique shops, coffee shops, hair salons and even fish and chip shops. All part of imitation clusters.

Continue reading “Pioneers get arrows in their backs while copycats steal the lion’s share of the market”

Can imitation mean innovation?

I-5 Design & Manufacture | Continual Product I...
(Photo credit: I-5 Design & Manufacture)

With small business owners struggling in these recessionary times and many plunging into debt and being forced into bankruptcy, it would seem reckless to encourage new ideas for products and services.

Essentially, if you are going to start implementing new products and services, you’re in effect starting a new business. But then it can be said that when you pursue and secure a customer with any product or service you are actually in business.

Many people are being forced into creating a business of their own because of losing their jobs. This week we have seen how Pioneer Foods is retrenching 1,500 senior and middle managers, 10% of their 15,000 employee complement. Continue reading “Can imitation mean innovation?”

A new twist on imitation

If imitation were that simple, small business owners could come up with knock-offs of other products and services and ring their cash registers.

Imitation crab
Imitation crab (Photo credit: DBduo Photography)

Imitation can be a more important source for new products and services than the original concept or innovation. In fact, researchers claim that copying ideas can be more valuable than inventing something new. Up to 98% of the value from innovation is realised by the imitators rather than the innovators. Continue reading “A new twist on imitation”

Come on! It can’t be this easy to get ideas can it?

Ideas for recycling

A reader asked me this question after reading “Creativity sucks. Or does it?” last week:

QUESTION: I read your blog post on “Creativity sucks” and wondered whether you are for imitation rather than generating original ideas. What gives?

CHESNEY: First off, I don’t want to offer any stuffy definitions about original ideas and imitation. Let’s be clear: Imitation doesn’t mean wholesale or complete copying of someone else’s idea. You still need to generate ideas to come up with a product or service that is different from those already introduced or you will just be giving customers what they can buy elsewhere. You need a distinct point of differentiation.

What I tried to get across was that imitation can involve creativity. Duplication or direct copying is not. Let’s face it; imitation is not about mindless copying of others ideas, products and services. The fast follower needs creative imagination to come up with a product or service that is similar but different what’s already on the market. Continue reading “Come on! It can’t be this easy to get ideas can it?”

Creativity sucks. Or does it?

English: Apple iPod mini grey.
Apple iPod (Photo credit: Wikipedia)

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. MpMan F-10 (1997)

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.

Continue reading “Creativity sucks. Or does it?”