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Pushing Boundaries Through Clever Innovation 

Innovation is the key to market disruption. What can companies of all sizes learn from the success stories of the last twenty years?

Cast your mind back twenty years to the year 2000. The business world looked very different back then. Netflix was posting out DVDs to its customers rather than streaming TV programmes and movies, Tesla was in its infancy and Airbnb was several years away from launch. Return to the present day and all three businesses are not simply global brands, they have disrupted and ultimately transformed their industries.

They are not alone. We are living through a time when innovative and disruptive companies – often backed by venture capital – are launching and scaling up their operations at breakneck speed. From entertainment to aerospace, you’ll find them in every industry. And while their journeys have been different, there is a common factor. By developing new ways to engage with and deliver services to their customers, they have swept away existing business models and created new paradigms.

For the most part, we are not talking about new industries. There was a very big and successful music industry before the development of streaming technologies but Spotify’s business model enabled consumers to listen to unlimited tracks in return for listening to ads or a small subscription. Suddenly CDs became a minority purchase. Similarly, Netflix did away with DVD rentals. In the car industry, Tesla showed a startup company could outdo General Motors and Ford a nascent premium electric vehicle market. Meanwhile, Airbnb and Uber brought sharing economy concepts to the respective travel and urban transport markers.

A Willingness to Innovate

The common factor was a willingness to innovate and an ability to see opportunities that incumbents either failed to perceive or were reluctant to pursue.

But here’s the question. Startup companies and market incumbents are very different beasts in terms of their decision-making processes, corporate structures and legacies. So what can established businesses learn from the likes of Spotify, Netflix, SpaceX or, indeed, the by now venerable Amazon?


A good place to start is user-centricity. Corporations have a lot of baggage. Over the years, they have built physical infrastructure, supplier networks and successful business models. These can define the company and its working practices. The customer is expected to fit in.

Startups often start with the customer experience. Companies such as Uber and Airbnb used technology to make life easier for consumers. They weren’t constrained by having fleets of vehicles or hotels. Their secret sauce was the app that allowed millions of ordinary people to offer rooms and taxi rides using their own assets, providing a more responsive service for consumers in the process. Spotify tapped into a demand for on-demand music while providing a viable financial model for record labels.

Instant Brands

Customer-centricity, in turn, creates instant brands. As Forbes pointed out earlier this year, startups who deliver an irresistible consumer experience are at the same time creating brand enthusiasts. Their customers love the product.

Sitting alongside that, Forbes argues that startup brands tend to be mission-driven. They set out to solve a problem and have a laser focus on achieving that goal.

This customer-centricity could be encapsulated in the phrase: “What would Richard Branson do?” Over decades, Richard Branson has grown the Virgin empire and brand by identifying ways and means to serve customers more effectively by challenging industry norms.

An Innovation Culture

By definition, startups exist to innovate. Their goal is to solve problems that haven’t as yet been solved. So innovation is in their DNA.

Established businesses can also put innovation at the heart of everything they do, but it’s more difficult. If a business employs 200,000 people and generates dividends for shareholders, there is a lot at stake.

Innovation can mean a lot of things, from incremental process improvements at one end of the spectrum to game-changing new business models at the other. There is a common factor. If managers and staff are to innovate – to suggest changes that may or may not succeed, they need to have the confidence to do so. Harvard Business Review, argued that businesses must encourage intellectual bravery. Or to put it another way, a willingness to “dissent, argue and challenge the status quo.”

In that respect, creating an innovation culture depends on managers who are prepared to take risks and inspire their teams to do the same.

Embracing Failure

The problem is, of course, that new ideas often fail, a reality evidenced by the fact that only a small percentage of startups will go on to become world-beaters.

In corporations, it’s important to acknowledge that failures happen. This can be managed by creating departments and divisions that develop and test new ideas without necessarily disrupting the larger business.

But what about the typical startup culture of long hours and absolute commitment on the part of staff. In an article for Forbes, an unnamed contributor described how Elon Musk inspired his teams. No one was told they had to work late, but people did, not least because of the excitement of working in a rocket factory.

But for most companies, the key to innovation is to hire the best people. To do that, businesses must demonstrate a willingness to empower staff and nurture their careers. Incentives in the form of benefits and rewards play a vital role.

But ultimately this winds back to the key factor binding disruptive startups. Technology, a willingness to experiment and team commitment are all vital, but the lesson of the disrupters is that those who best serve their customers will dominate their respective markets