Innovate Through Visionary Exploitation
By Jeffrey Baumgartner
The most successful product and service innovations over the years have almost inevitably been the result of visionary exploitation. A creative CEO or entrepreneur sees seemingly unrelated technologies, often from outside her business sector, and combines them to create something new. These are not inventions. They do not incorporate new technologies or techniques. Rather, they are the result of intellectual tinkering − playing with ideas about using existing technologies in new ways. If new technology is involved, it was invented by someone else and exploited by the innovator.
The iPhone, for example, combined the idea of a smartphone (which at the time probably had a tiny keyboard), the Blackberry, the personal computer and a small touchscreen. These existing inventions and ideas were packaged in a smart looking case and the result was the iPhone which went on to inspire most of the smartphones on the market today. Indeed, there is a good chance you are reading this on an iPhone or a smartphone inspired by it.
The success of the iPhone was bringing together existing technologies, recognising their potential and selling the vision to the world. There was little in the way of invention about it.
When IBM launched their first personal computer and approached Bill Gates to provide an operating system for their new product, he recognised that the PC would change the world. However, Microsoft did not have an existing operating system they could sell to IBM.
Rather than write a new operating system, Mr Gates bought the rights to Q-DOS, an existing and suitable operating system, from Seattle Computer Products for US$50,000 and then licensed it to IBM. Brilliantly, he also convinced IBM to make their PC platform an open one so other companies could also build such computers (and, of course, license Microsoft's operating system).
Bear in mind that at this time, Hardware was big business and software was not. But within a few years, PC computers became commodity products and Bill Gates became, at the time, the youngest billionaire in history. Yet, he did not invent anything. He had a vision of providing standardised software across all new PC computers and he bought someone else's invention to combine with those PCs. He exploited a great opportunity; one few people would have recognised.
Indeed, the visionary exploiters tend to be far more successful in business than the inventors who provide them with the components of their visions. The touch screen concept was invented in 1965 by E. A. Johnson who wrote about it in journals rather than patented it! He perceived it would be useful in radar. He did not become a billionaire. He did not become famous.
Seattle Computer Products' best year in sales was a mere US$4 million and the company shut down years ago. Mr Gates himself earns more than that every day.
Elon Musk's Tesla is a luxury car powered by batteries. Neither luxury cars nor battery powered cars were novel ideas. Both had been around for ages. But, before he launched the Tesla, battery powered cars were low-end vehicles based on small cars and offering minimal features. Nevertheless, they had much higher price tags than comparable petrol and diesel engine cars. Mr Musk realised that it would make more sense to develop a luxury battery powered car, with lots of battery life. And he did just that.
His cars have become remarkably successful in no time and his company is worth more per car sold than any other car manufacturer.
I absolutely do not want to belittle the achievements of Mssrs Jobs, Gates or Musk. They are all brilliant men. Indeed, a big part of their brilliance was seeing an opportunity and exploiting it using existing technology rather than inventing something all new. Visionary exploitation of existing technology is faster and more profitable.
That brings us to the most important person of all when it comes to visionary exploitation: you. How can you use visionary exploitation to fuel innovation in your existing company or perhaps in a start-up you fancy launching?
There is no easy way to find ideas for visionary exploitation. If there was, every CEO and entrepreneur would take advantage of this technique. Nevertheless, there are a few things you can do to make it more likely that you discover a vision to exploit.
Although not necessary, it helps to be at the helm of a young company. Established companies are far more set in their ways and less likely to make big changes in the way they build their products. Apple is a rare exception to this rule. Microsoft was a recent start-up at the time Mr Gates was talking with IMB and Tesla was established to exploit Mr Musk's ideas about a battery powered luxury car.
Look Beyond Your Industry
As a rule of thumb, the longer you work within a particular industry the blinder you become to other ways of doing things within your industry. This is why companies like Kodak were ruined by digital photography and Nokia went from being the leader in mobile telephone manufacturing to being a distant follower as a result of the smartphone's popularity. The failed to see new opportunities and threats that were right in front of them.
Look outside your industry for inspiration. Pay attention to new developments in other fields and continually ask yourself two questions. Firstly, is there something in this development that could be applied to my industry? Secondly, is there something in my industry that might be applicable to this development?
Hire Outside Your Industry
Better than looking beyond your industry is to hire from outside your industry. If your management team is all highly experienced in your area of business, they'll know your area of business inside-out. But they will be less likely to see outside opportunities. Hiring people, especially researchers, technicians and product development people, from other industries is a great way to bring new ideas and new ways of thinking to your business.
Mr Jobs did this. When he had an inspiration, he would tell his technical team what he wanted and they would put it together, often looking to other industries for inspiration. The early iPod combined digital music, the Sony Walkman concept and design inspiration from early transistor radios. These ideas came from Mr Job's diversely experienced team.
Visualise Rather than Verbalise
A lot of corporate innovation tools focus on verbalising ideas. However, that tends to focus on our thinking on details rather than the big picture. Learn to visualise concepts. If you are developing a product, sketch it or build it rather than describe it. As you do so, look to other industries. Check out design galleries. Look at books on great designs from the past. Think about other products which look similar or feel similar to yours, even if they do entirely different things.
Look for Opportunities in Your Own Actions
When my eldest son was born in Bangkok in 1997. Like most new parents, I took loads of pictures of my son and wanted to share them with family and friends. However, I have lived an international lifestyle, so family and close friends were spread across three continents.
At the time, I was running a small web and multimedia production company that was considered rather innovative in the local market. At the time, I was continually looking for opportunities, though my focus was largely on using the web to facilitate international trade.
So, I scanned a few of the best photographs of my son, created a private space on my company web site and uploaded the pictures along with captions. Then I emailed friends and family with an email address and invited them to look a the pictures on-line.
Sadly, it never dawned on me that other people might want to do the same thing and that there might be a business opportunity in creating a web site that would allow people to upload and share pictures. Indeed, it wasn't until 2003 that Photobucket became the first company to offer a photo sharing web site and Flickr came a year later. Today, there are many such applications.
Interestingly, also in 1997, Philip Kahn's wife had a baby. Mr Kahn is an engineer and was familiar with mobile telephones. He realised that he could combine digital photography with mobile telephones and that to do so would enable people to take pictures and share them by phone. He even developed a company to exploit his idea.
Clearly, if I had stopped to think about why I was uploading pictures to the web, considered how many other people would probably have liked to do the same thing and built something (using existing technology), I would be very wealthy right now!
Pity! But my loss is your gain. When you are doing something that seems more complicated than it needs to be, if others are likely to want to do the same thing and if you have the wherewithal to accomplish the task, stop and think about it. Could you automate what you've done and commercialise it? If so, there might be a tremendous business opportunity awaiting you.
If you ask creative people about their own creativity, most will find the question difficult to answer. Nevertheless, the word 'play' will usually be a part of their answers. And, indeed, play is incredibly important to creativity.
So, if you and your colleagues are like most businesspeople: way too serious, learn to be less serious. Learn to play again.
Play with your products as if you were kids. Better still, bring your kids in to play with you. Bring in other products to play with. Bring some markers, glue, duct tape and construction goodies. Then, get silly. Have fun. Laugh. Play. Ideally, do this away from the office where you all can relax and let your guard down. You will probably find this the most creatively inspiring activity you have ever done for work.
When you do come up with a possible visionary exploitation, you will need to be audacious, especially if you are in an established business. You will need to be audacious enough to believe that your concept is better than existing, similar products on the market. Most likely, you will need to be audacious enough to take on the established big names in the field of your visionary exploitation.
At the time Apple lauched the iPod, it was primarily in the personal computer business. Likewise, the company did not make telephones before launching their visionary iPhone. Mr Jobs had the audacity to believe his computer company could build a better smartphone that the numerous existing phone makers. He was right.
Mr Musk has had the audacity to tell the automotive business in America and the world that he has a better way. Those companies are among the biggest and longest established companies in the USA. Yet, Tesla is doing very well indeed and it is forcing the established players to take battery powered cars more seriously.
If you have a visionary exploitation in mind, you will have to be audacious enough to believe you know more than the established players. That's not easy. And they won't like it, especially if you succeed.
Success Not Guaranteed
Moreover, a creative vision of a new product that exploits existing technology in new ways and audacity are not necessarily enough. In 1996 as the web was growing in popularity and e-commerce was all the rage, Louis Borders combined the concepts of e-commerce, grocery shopping and a fleet of delivery vans to establish Webvan. Everyone needs to shop for groceries, he reckoned, but many people, especially working couples, just don't have the time. So, why not allow them to shop for groceries on-line at their convenience. Then a van would bring their order to their front door.
In 2001, Webvan went spectacularly bankrupt and marked the beginning of the dot-com bust.
Interestingly, many of the bigger supermarket chains have more recently revisited the idea of grocery shopping on-line. But they are doing it themselves and more efficiently than Webvan did.
There is a tendency to think of innovators as inventors who bring bold new products to the market. This is a nice vision, but it's not true. Big, profitable innovation almost inevitably comes from visionary exploiters − such as Messrs Jobs, Gates and Musk − who combine other people's inventions in new ways to create bold, new products.
For those of us who are not engineers or designers, this is good news. It demonstrates that a creative mind combined with a bit of audacity is what is needed to become a great innovator. But, if you wish to be a great innovator, you need to expand your awareness and thinking beyond your business sector and you should hire talented people from outside your sector. Your competitors, like you, know your sector inside out and upside down. Neither you nor they will find anything radical or new by focusing on your sector or by expecting a team exclusively experienced in your sector to provide the kind of original thinking necessary for visionary exploitation.
Likewise, don't look to your best customers for ideas. None of the innovators I have mentioned here have done that. Your best customers are likewise too focused, on what your product is, to have visionary ideas about it.
If anything, look to yourself. Look at actions you take that are time consuming or convoluted. Can you find a way to make those actions easier? Would others like to be able to do the same thing? Is there something you would like to do which is not possible, but which should be possible? How could you combine existing technologies to make it possible?
And, most of all, look to your creative mind and exploit its potential. That is one thing every great inventor and innovator has done. You can do the same.