Innovation in Entrepreneurship
Innovation is key to success but solely responsible for success - No. To be successful, your need to plany forest not a only a tree.
Innovation, for example, derives from the Latin word innovationem. It was first used as a noun of action – “a new idea, device, or method” – in the 16th century.
Innovation in its modern meaning is “a new idea, creative thoughts, new imaginations in form of device or method. Innovation is often also viewed as the application of better solutions that meet new requirements, unarticulated needs, or existing market needs.
Innovation = Invention * commercialization
There have been phenomenal inventions in the world but all are not termed as Innovations. Some of the greatest innovations like wheel, compass, printing, clock, TV etc.
Such innovations can be of following types
And can be in the following categories:
“Disruption” describes a process whereby a smaller company with fewer resources is able to successfully challenge established incumbent businesses.
Disruptive innovation is where traditional business methods fail and requires new capabilities. Although the risks are big, there’s a huge growth potential if everythinggoes right.
Netflix started off as a video on demand and DVD by mail kind of a platform and then later expanded its services to even online video streaming which was the spotlight of its developments. Netflix is a disruptive innovation because it revolutionised how people get their daily dose of entertainment.
Incremental innovation : Most innovations are incremental, gradual and continuous improvements in the existing concepts, products or services in the existing market. Incremental innovations are just a little better than the previous version of the product or service and has only slight variations on an existing product formulation or service delivery method.
Products can be made smaller, easier to use or more attractive without changing the core functionality of it and services can be made more efficient through constant improvement.
Although incremental innovation does not create new markets and often does not leverage radically new technology, it can attract higher paying customers because it fulfils the customer needs identified from their behaviour or feedback.
While Apple is known for ground-breaking products, iterations are, in fact, key to its product strategy. That means adding incremental features to existing products instead of trying to launch new disruptions in the market
Reverse innovation is counter intuitive phenomenon which begins by focusing on needs and requirements for low-cost products in countries like India. Once products are developed for these markets, they are then sold elsewhere – even in the West – at low prices which creates new markets and uses for these innovations.
In rich world there are a few people who spend a lot where as in developing countries there are a lot of people who spend a little. India is a mega market with micro consumers with with different needs than the developed world because one person with ten dollars to spend has vast different desires and needs than ten people each with one dollar to spend.
Tata – Swacch – World’s cheapest water purifier an example of Reverse Innovation. Swacch means clean in Hindi. Tata launched the water purifier – Tata Swacch targeting the rural market in India with the cheapest water purifier in the market. The product does not require running water, power or boiling and uses paddy husk ash as a filter. It also uses silver nanotechnology. It can give purified water enough to provide a family of five drinking water for a year. The company feels it will open a whole new market.
China has been a country that has hardly invented anything yet it has become the worlds best manufacturing hub is because of reverse innovation.