Myth: “Only disruptive ideas justify the launching of a new company.”
There are many valid reasons why aspiring entrepreneurs are hesitant to launch a new business, and this myth always manages to make it into the “Top 10.” It is, by far, the most difficult to defend against, as its foundation is rooted in multiple elements of truth.
On the surface, sentiments such as this one tend to support the widely-held belief that if an idea isn’t incredibly innovative, the chance of it being successful is so low that launching a new business won’t be justified. The myth is further perpetuated by society’s fascination with the popular concept of disruptive innovation. Despite Corporate America’s fixation with this trendy phrase, this myth is still completely false.
A disruptive innovation is one that causes a new market and value network to be created by displacing an earlier technology. This type of innovation gets a lot of attention, changes the way consumers operate in the marketplace and typically makes the creator of the innovative idea phenomenally wealthy.
In 2001, a number of companies were committing vast amounts of financial resources to developing a sleek, lightweight CD player that consumers could listen to while performing their daily tasks. When the CEO’s of these companies woke up on October 23, none of them had any idea that Steve Jobs would be announcing the Apple iPod to the world that day. Consumers would also be made aware of iTunes as well.
The iPod is an example of disruptive innovation that changed the way consumers listened to music virtually overnight. Apple got the glory, and the companies that were developing the latest and greatest CD players – Philips, Sony, NEC, Audio-Technica and Denon – instantly lost their market share of the portable music industry.
That was an impressive accomplishment for Steve Jobs, but it is definitely the exception to the rule. Innovation on a wider scale tends not to be disruptive, but incremental.
Incremental innovation happens when companies make a series of small and predictable improvements that cumulatively create significant change, but without the associated risks.
While society fixates on disruptive innovation and its fanfare, incremental innovation is happening every day. Furthermore, it is making many entrepreneurs extremely successful, which is why this popularly-held myth needs to be set aside.
A company doesn’t have to have “breakthrough” ideas in order to benefit from innovation. They simply need to identify a problem that needs to be solved and find a solution that works. As mundane as that may sound, it’s an idea that makes businesses millions of dollars every day.
For example, pizza franchises were throwing away dough each night if their sales forecasting wasn’t accurate. Instead of searching for a solution in the complex algorithms of sales forecasting software, an employee came up with a much better idea: BREAD STICKS.
In addition to solving the food waste problem, it generated profit directly to the bottom line as an add-on menu item. Waste was reduced; in-store profits increased by 15% and consumers were thrilled with the new item. That solution definitely falls into the “innovative” category.
As you can see, innovation does not have to be a disruptive “all or nothing” game-changer that exists exclusively in Silicon Valley. Keep that in mind the next time you reach for a paperclip or a Post-It™ note. If your business concept is viable and solves a societal need in any form or fashion, launching a new company is justified.
To be honest, there have been many entrepreneurs that have been phenomenally successful – and have made incredible fortunes – launching companies around ridiculous concepts. These ridiculous concepts also made the founders ridiculously wealthy. Consider these examples from Yahoo! Finance (Business Insider, 2015):
1. Gary Dahl: While sitting in a bar listening to some friends complain about veterinary bills, Gary stumbled upon a unique solution for the problem. He launched his company in 1975 and made more than $15 million in profits in the first 6-months of business. His solution to exorbitant vet bills was The Pet Rock.
2. Bernard & Murray Spain: The two brothers launched a company around trademarked artwork they wanted to market to retail companies to help increase customer satisfaction and repeat visits. They launched their company and made more than $500 million in profit during an 8-year period. Their solution was a Yellow Smiley Face with the caption, “Have a Nice Day!”
Your business concept doesn’t need to win the Nobel Prize to be viable. It simply needs to provide a solution to a societal need. With this myth out of the way … go out and make it happen.