You Don’t Need Disruptive Technology to Be a Success, Iteration Works Too
By Martin Zwilling, entrepreneur.com, 21-07-2014
It may not be as sexy, but starting a new business that builds on
an existing technology or business model is usually less risky than
introducing that ultimate new disruptive technology. There are many
levels of innovation that go beyond copying someone else’s idea, but
stop short of pushing the bleeding edge.
Many of the major business successes started this way.
McDonald's
didn’t really invent the fast-food model -- it simply improved on the
cookie-cutter White Castle process. Before Wal-Mart made the low-cost
high-volume business model famous, there was Ben Franklin and Two Guys,
which touted it way back following World War II.
The advantage of imitation, with innovation, is that it gives you a
solid base for building experience. There is always time later for your
next startup, using that disruptive technology of your dreams. Or you
may decide that your dream was not really the great idea that you
thought it was.
Don’t be intimidated by the negative image that imitation currently
has in the startup world. Certainly, I’m not recommending just one more
Facebook, with a couple of features from Twitter, since social media has
an unlimited potential for innovation. Risk level has always been
directly correlated to the number of unknowns, so eliminating even one
variable will improve your odds:
1. Eliminate one aspect of research and development. According to a recent Harvard Research
study, first-time inventors spend at least a third more on their
initial technology than later innovators. In addition, we all know that
patent disclosure rules often facilitate legal reverse engineering, and
innovation at this point is now much cheaper.
2. Capitalize on the lessons from early adopters and competitors. Smart
startups save cost and time by capitalizing on the pivots of others
before them. Market research can thus be based on real customers and a
previously tested market. Studying and learning from the mistakes of
others is the best way to reduce your own risks.
3. Attract investors who fear pioneers catching arrows. Banks
have always been more likely to support the franchise model of cloning
an existing business, while they avoid, like the plague, a new and
untested technology. Most equity investors tend to avoid truly
disruptive technology startups, since they take longer and more money to
scale.
4. Imitation with continuous innovation predictably drives progress. The
auto industry and others have used this model for generations, so
business processes and metrics for innovation are well
documented. Disruptive technologies are random and their success is
unpredictable. Good imitators, such as McDonald's, often bypass the
original innovator.
5. There is always a related market or new country. The
world is now a small place, but startups usually don’t have the
resources to saturate all the related markets at once. Imitation with
innovation is a great way to jump ahead of the curve. Especially if that
new market is your home country, you will have the advantage.
Don’t be fooled by thinking this approach is easier than rolling out a
disruptive technology. In many ways, more effort and attention is
required to make sure you know what works and what doesn’t in a given
domain. Timing is critical, as well as a focus on marketing and customer
satisfaction. Competitors can move quickly, and there is no huge
technology gap to protect you.
If this approach appeals to you, I recommend that you start by
looking for successful businesses and focus on innovations you could
offer to make the businesses even more successful. Innovations are often
as simple as better delivery, more customization or better
distribution. Who knows, your imitation with innovation may turn out to
be the bigger than the disruptive technology of your dreams.
Source: http://www.entrepreneur.com/article/235742
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