Why Innovation Matters for Entrepreneurs by Peter Nguyen

Every business dreams of leaving a legacy. These days, making it past your first year is tough enough. Many forward thinkers have ideas they hope will change the world, but hardly any will ever see their dreams come true. Hard work and focus is the vehicle that might get you there, but innovation is the gas necessary to keep your engine running.

Boston Consulting Group recently surveyed 1,060 executives and found some convincing facts about what are driving big businesses today. Innovation remains a top strategic precedence for many companies, with 72% of executives ranking it a top-three strategic priority. More than half of the executives were dissatisfied with returns on investments in innovation. Although blue-chip CEOs may be spending huge budgets on innovation, this shouldn’t mean small businesses cannot compete with them. Small businesses can adapt and react quickly, and often don’t get toppled in the deadly process of killing innovation with “no change” attitudes from risk-averse shareholders.

Donald Sheelen, an innovation consultant, has created and managed over $1 billion worth of innovative products. “Innovation is the lifeblood of any organization.” he emphasizes “Without it, not only is there no growth, but inevitably a slow death.”

Only two-thirds of new small businesses survive at least two years, and just 44% survive at least four years, according to a study by the U.S. Small Business Association. Here are some innovation principles that every entrepreneur should consider if they don’t want to be another startup casualty.

Jump the next curve. Great innovators don’t try to do things 10% better; they try to do it 10 times better. Innovation is the act of introducing something new. The power of the web means startups no longer have to build global infrastructure to reach a worldwide market. This allows for companies like Google, eBay, Facebook, and YouTube to scale their businesses unconventionally quickly. They have jumped the next curve and invented new curves to jump on. They are reorganizing how society operates in brilliant and novel ways. It is their awareness of what’s upcoming that are allowing these young entrepreneurs to be worth billions.

So how can you start thinking like a great innovator? First, you must be versed on what are the latest innovations. The success elite are lifelong learners. Talk to your customers or potential markets and ask what they want. Consumer-centric innovation may be the most powerful way to raise a company’s innovation success rate because you’re producing exactly what your customer wants.

Get fresh eyes. Most entrepreneurs never think outside the box because they’re trapped under their own self-created glass ceiling. The busy daily grind with its built-in stress pollutes their natural creativity. Take the time to re-evaluate your goals with some fresh perspectives.

Start by switching roles. This is a good way to learn and understand what’s out there or in there. If you’re a manager, become an employee. If you’re the product manager, become the product. Change your perspective. This bit of role-playing can allow you to find new innovative ways to look at the same problem, and find a solution you never thought existed before.

Stuck with a creative block? Try beginning your day with Starbucks in one hand and a pen in the other. Build a daily routine brainstorming new ideas first thing each morning to get your creative mojo going. Before the hectic day starts is when you’re most creative and your mind is less cluttered and strained.

Swim in the blue ocean. In the groundbreaking book Blue Ocean Strategy, authors W. Chan Kim and Renée Mauborgne say that a major focus should be on creating competitor-free market space. Unlike “red oceans,” which are well explored and crowded, “blue oceans” represent opportunity for highly profitable growth.

Take Cirque du Soleil, for example. It took an old circus model, which catered toward middle-class families, and created a phenomena focused entirely on an upper class Broadway-type audience. Cirque du Soleil eliminated the cotton candy and expensive circus animals. Instead, it rented high-class venues and crafted a themed storyline underlining its astounding acrobats and performers. It was able to reconstruct the market boundaries for an aged circus industry and has since entertained over 70 million people.

Start looking across time, alternative industries, or complementary products or services. Your goal is to find the customer values of today, then re-evaluate traditional outdated models and their old values. Are you after a market that is small enough that larger competitors aren’t already going after it, and big enough so that if you’re successful, you can reach critical mass and profitability? Once you’re on to something, you can start paddling in the open waters.

Think big, start small. If you’re going to change the world, you cannot do it with boring products or services. In the Art of the Start, Guy Kawasaki suggests, “Your goal is to catalyze passion…the only result that should offend (and scare) you is lack of interest.” He also recommends you not doing it alone. Most successful companies are started and become successful with at least two “soul-mates.”

Your positioning and messaging should be simple, elegant, and deep. It must be easy enough that your grandmother would understand it, and intuitive enough for a fifth grader to figure out. If your business model cannot be described in less than 10 words, start over until it can.

Move swiftly. Busyness doesn’t create business. Don’t spend all your time trying to find the perfect business model and the perfect big idea. Marketing guru Seth Godin, discusses this in his book, The Big Moo: Stop trying to be perfect, and start being remarkable. Your initial goal isn’t for perfection. It just needs to be attractive to a large group of people.

Most businesspeople would suggest that you must understand your market and product very well, then go as fast as you can. Make as many mistakes early on and react quickly. This will be your best way to be able to compete with the business giants.

The revolution of forward-thinking innovators has just started. The race to build creative, innovative companies will be decided by who will choose to start and who will finish strong. Perhaps one day, more companies will be leaving a legacy after all.