Years ago, I led a team of brilliant young developers and together we created the first electronic automotive parts catalog with pictures. Searchable and compact, manufacturers and car dealers using shelves of paper catalogs or awkward microfiche said it was the greatest thing since sliced bread.
Sliced bread itself was a bold innovation in 1928. Bread companies and consumers resisted the idea at first, fearing the bread would dry out. But innovations in bread wrapping solved the problem, and consumers loved the convenience. Within five years sliced bread was outselling whole loaves. Industrial bread slicers were selling like hotcakes. And soon appliance manufacturers were making more dough, too, as toasters began popping up on kitchen counters.
Innovation Doesn't Sell Itself
Panasonic thought they had a product that was the greatest thing since sliced bread when they began selling a home breadmaker. The innovative device effortlessly produced the wonderful aroma of fresh-baked bread, and turned out a golden-brown unsliced loaf. Slow to sell at first, Williams-Sonoma used an innovative marketing technique to move the $275 device off shelves. They introduced a $415 model to establish a value perception. Slowly, sales of the “lower priced” kitchen appliance began rising, and decoy pricing found its way into the advertising lexicon.
But you don’t have to be a big corporation to find innovative ways of doing things to create a competitive advantage.
Small Business Innovations
One of our local restaurants replaced the traditional wine list, which is often intimidating and inscrutable to non-oenophiles, with iPads. You use the device to read about the different vintages with user-friendly descriptions and images and then place your order automatically, so you don’t have to wait for a waiter to order a glass or bottle.
An innovation doesn’t have to involve technology, though.
Another restaurant my wife and I enjoy has a Yes/No sign on the table. Yes means you need something, and any waiter will stop to get you what you need. No means we’re happy, leave us alone. A simple, yet effective, process innovation.
Here are a few more simple and effective innovations to consider.
- A local pool-service company began offering water quality monitors. The innovation moved them from a fee-for-service business model towards a leasing model.
- Another local company put their screen-door shop on a trailer, and now they come to your house to fix or replace a screen.
- A friend used to buy FAA data on a big magnetic tape, run it through a computer program to sort and format the information, and then a printer published a thick book that listed all the aircraft registered in the U.S. Unavailable in any other form, the book listed aircraft by registration number, owner, make and model, and city/state. But when innovations in storage technology resulted in the CD-ROM, I began publishing the same data, and much more, at a fraction of the cost and made it keyword searchable. Surprisingly, we’re still friends.
Innovations Come in Several Flavors
Most entrepreneurs dream of making the kind of disruptive innovation that not only lifts their business but also changes the world. Apple’s iPod and the iTunes service changed the music industry. Netflix changed the movie rental business. Starbucks changed coffee from a beverage to an experience. Each of those companies started out as a small business with a big idea.
But innovations can also come in baby steps. Consider incremental improvements which can extend the life of a product. Two- and three-blade safety razors are an example. A local bottled-water company that delivered big jugs for office coolers came up with a successful innovation: gallon jugs with taps for home refrigerators.
Thinking outside the box can lead to complementary innovations that can expand your market. A company that grows flower bulbs could offer picturesque flower field tours. The brothers Michelin offered free tourist guidebooks to encourage turn-of-the-century use of automobiles and thus successfully increased sales for their start-up tire company.
But innovation (usually) doesn’t just happen. You have to foster an atmosphere of creativity and experimentation, and you have to be willing to make mistakes and accept failures. Most of all, you have to be able to move beyond the bright idea stage and turn the concept into a new product or service that’s the greatest thing since sliced bread.
What innovations–process, product, business model–have you made in the course of running your business?
Tom Harnish is a serial entrepreneur. Always on the bleeding edge of technology, he learned what works (and what doesn't) leading projects, products and companies to success (mostly). He can't play a lot of musical instruments.
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