Here is a very counterintuitive — and perhaps unfashionable — approach to innovation. But it works.
I came across a very interesting article on VentureBeat.com that provides five key reasons why “retro innovation” can be very lucrative. It was written by Brent Frei, founder of Bellevue. This article provides another view on the race for innovation and a lot of it made sense to me.
Here is a summary of the article.
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1. Old markets are huge. They’re also established and well understood by customers. So, if you can develop a better mousetrap that addresses the nagging customer pains that still exist in these well-developed arenas, you’ve got immediate gold.
2. Venture capitalists are fixated on what’s new, next and on the horizon. There isn’t a lot of interest in the tools and applications of the past, especially given the dominance of the market leaders in these categories, so innovation in this area faces less competition.
3. Old markets are often populated with executives and entrepreneurs who are victims of their own bias. So where you are competing, it’s with the “establishment,” which usually means dogmatic developers who have been left behind as the aggressive and truly creative players seek the next big thing.
4. Old markets actually lend themselves to seismic change if the right technology solutions are brought to bear. Conventional wisdom says that big markets with “good enough” technology are sometimes not worth pursuing because the customer’s pain and priorities simply aren’t high enough on the list for them to care about your better mouse trap.
But I believe you can be a game-changer in these situations by offering a new technology paradigm. This doesn’t mean leveraging state-of-the-art technology to improve on the existing product; it means combining many fresh technologies to create a unique product that addresses old needs in an innovative way. For example, take what Pampers did to the cloth nappy in the 1960s, or what Post-It notes did to the notepad in the 1980s, or what iPod did to MP3 player in the 2000s.
5. In old-market innovation there’s far less visibility, fewer spotlights, and much more room to truly experiment with the best solution before launching. Everybody is watching the social networking market like a hawk today. The bottom line is that you can quietly and efficiently learn a lot about what users like and don’t like in an old technology market, and then design your product accordingly. You can also test your solution more openly (with some disguise, of course) in these well-established and somewhat neglected arenas.
Innovation — as we all know — requires inspiration, creativity, discipline and luck. And to be successful at it, you have to pick your opportunities carefully. My view is that if you take your inspiration and creativity and pour them into meticulously selected markets that have established track records over time, you’ll eliminate the need for luck. Retro is definitely the way to go!
Some very good reasons articulated by Brent Frei to look at existing markets and apply innovation – less risky and more predictable.
Till next week…
Gail Geronimos, is the founder of Achaeus, which helps entrepreneurs develop their businesses and she has just started a new site www.pitchingtoinvestors.com with tools and tips about how to develop killer presentations to raise capital.
To read more Gail Geronimos blogs, click here.