Innovation is Only the Beginning
by Rob Stam
For several years now there has been a rejuvenated level of energy around innovation, and rightfully so. Innovation comprises the backbone of our local economy. West Michigan can attribute much of its success to a commitment to innovation that goes back several generations. We teach it, edify it, and reward it.
Parallel with innovation is the growing popularity surrounding the investor pitch, which is designed to spur on innovation. The pitch has taken on a life of its own in the form of competitions in our community and around the country. The grand daddy showcase of them all is the show Shark Tank, and there’s an interesting lesson that we can learn from that show. In every pitch comes a pivotal moment when the most important question of all is asked by one of the sharks: “What are your sales?”
What the sharks realize is the foundational law of business: nothing happens until something gets sold. Ultimately, a great innovative idea is only as valuable as the market to support it. This means the innovator needs to learn how to bridge the gap between the innovation and the market. This is true whether your innovation is a new product for the consumer or a new process for your team.
Simply put, innovation requires commercialization. This is the entrepreneur’s job: not to simply come up with something great, but to deliver something great. This is the most common problem I see with entrepreneurs. They are often obsessed with their idea and believe it’s worthy of hundreds of thousands or millions of dollars, but have failed to put the energy into how to commercialize it. They are perpetually stuck in the good idea phase.
One of my favorite commercialization examples is how VHS became the consumer standard for video for over two decades. JVC did a superior job of commercializing VHS technology despite Sony’s superior innovation with Betamax. JVC realized that consumers would prefer four-hour recording times over slightly higher resolution. While the engineers of the world cringed, the marketers celebrated. Fours hours of recording time sells, or at least it did in the 1970’s, and that’s why our basement storage rooms are full of VHS tapes and not Betamax tapes.
Commercialization is not easily mastered and it would take far more than this article to even begin to explain it, but it begins with being audience-focused over product-focused. This is not an excuse for inferior products or services, but instead it’s a reason to focus on what solves an easily understood problem. Did the 1970’s consumer know they wanted a four-hour recording time? Was that really a problem? No, but when the consumer was informed it would require a four-hour recording time to tape an NFL football game they suddenly realized that anything less would be, well, a problem…a problem that only VHS could solve.
When commercializing a product, service, or process, you can find a clear path to commercialization through reverse engineering your process rom an audience-driven perspective. Without that perspective, you can tell everyone about your innovative ideas all you want. With that perspective, they’ll be telling others about them.