Posts Tagged: business planning
Innovation is about more than making giant, well-publicized leaps. It’s about striving for continuous incremental innovation to improve your offerings and keep on top of changes in your industry – and plenty of entrepreneurs could be doing this better.
Particularly in Canada, entrepreneurs have a problem making innovation pay. Research at Canadian universities tripled from $1.7 billion in 1999 to $5.5 billion in 2008, but revenues earned from their patents were significantly lower than what was earned by their European and American counterparts. The developers of these technologies are having trouble bringing their solution to market.
Established corporations can also face an innovation gap that is only partly explained by complacency. Some examples include Kodak, RIM and Xerox:
- Kodak had built up a multi-billion dollar company with a global brand years before digital photography came on to the market, sticking with film. It’s Japanese competitors saw where the market was headed. Today, Kodak has filed for bankruptcy.
- RIM’s meteoric rise was stunning, seeing the mobile business platform pioneer go from nothing to $10 billion in revenues after just 15 years. But Apple and Google-based smartphones were nipping at its heels. Despite its lead, RIM failed to match the browser experience or touchscreen capabilities of its competitors and its share price has dwindled to a small fraction of what it was.
- Xerox PARC was he innovation heart for its company, developing a mouse and user interface integration that was revolutionary for its time. Xerox didn’t know what they had, but Steve Jobs of Apple did, running with the innovation in Apple’s own Macintosh product. At this point, it’s impossible to say precisely how much revenue Xerox has given up over the years from this blunder, but it’s safe to say that it was a lot.
Innovating is hard, but recognizing a truly innovative technology for what it is and selling it is a common entrepreneurial challenge. Sometimes, the problem is packaging; entrepreneurs don’t know how to sell what they’ve got. Other entrepreneurs struggle with putting together a business plan around a technology. As we’ve seen, it’s not a problem confined to new business startups; but ideally, entrepreneurs who understand how to capitalize on innovation when starting out can instill that vision in their team as the company grows.
I am sure many of you heard about an elevator pitch. What really is it? And why should we know about it?
An elevator pitch is so called because it is something you deliver to a potential investor as you travel in an elevator. We know how long that can be. The ride to the top of Chicago’s Sears tower takes an estimated 51 seconds. On the demolished World Trade Center in New York, it would have been a little over a minute. You get the idea. Give or take a few seconds for halts, and a few more perhaps as you keep pace as your investor hurries into the hallway and then onto an office. You might be able to squeeze in a maximum of 2 minutes, if you are lucky and your target is slightly indulgent.