Lesson 1: What Is Innovation?  13 min.

Many large companies missed the opportunity of leaving their successful model when the time calls for it.

Today’s success is the enemy of tomorrow’s success

Innovation either increases customer value or decreases the cost for customers

3 myths about innovation

1. Innovation stems from ideas no one has before

2. Big success requires big resources

3. Innovation are based on fascinating technology

Successful innovators combine while pioneers get eaten by wolfs

Razor and Blade Pattern

Gillette sold their razors for next to nothing but blades at high costs. Nepresso followed this model with cheap  coffee machines but expensive coffee.

How to innovate your business model

1. Innitiation

2. Ideation

3. Integration

4. Implementation –

Rules when implementing iterations

1. only implement 1 business model at a time

2. Clearly communicate the business model

3. Don’t overemphasize short term KPIs

4 . Get top management commitment

5. Overcome the not-invented-here syndrome

Big players = sustainable innovation (attract higher paying customers)

Small Companies = disruptive innovation (low cost alternatives)

Example: Steel mill first started with rebar then shifted to sheet stee, stealing business from large steel mill

Car makers like Toyata and Hyundai, started making economy models.

For large companies to succeed, they need to treat their separate low cost branch as a different unit with different model and growth expectation

Keep an external focus – spend time with your target audience and figure out what problems they face

Learn from your mistakes – no product ever enters the market unscaved

Embrace the inner Edison – got out and start creating

Resist the pull of the core

Introduction to Business plans

What is the purpose of a business plan?