Innovation and The Entrepreneur: Four Critical Questions to Ask

July 18, 2011
There will always be opportunities in the world for those who innovate and can envision the future. Let’s face it, a little daydreaming never hurt anyone and an innovation needs to start somewhere.

"If it ain't broke, don't fix it" is the slogan of the complacent, the arrogant or the scared. It's an excuse for inaction, a call to non-arms. It's a mind-set that assumes (or hopes) that today's realities will continue tomorrow in a tidy, linear and predictable fashion. Pure fantasy! In this sort of culture, you won't find people who pro-actively take steps to solve problems as they emerge. Here's a little tip: Don't invest in these companies. -- General Colin Powell

Wow. Sort of says it all doesn’t it.

I have been observing the inner workings of small/start-up businesses for over 30 years as an employee, entrepreneur, business owner/executive and consultant. In looking back, I can say definitively that the good businesses that are still viable look nothing like they did years ago. “Innovate or succumb to market forces.” This is the mantra of the entrepreneur.

Consider what offices looked like 25 years ago. The fax was high tech and not universally used. Computers were only for nerds or big companies. There were a few outliers who were just starting to use PC’s, which were very expensive by today’s standards, didn’t offer much application software, and required knowledge of MS DOS and maybe some programming skills. They were primitive and not commonly used unless, perhaps, you were in what we called then “Data Processing.” If you used a computer at all, you were considered “smart” and maybe an engineer or even a genius. Telephones were on the desk and were tethered by a cord. Internet? Nobody anticipated this. Put yourself back into the world of 1986. How many of you anticipated that a great number of us would rely so heavily on the www for all our news (local and international), entertainment, education, and the latest sports scores?

Consider the office of today. Even the most primitive and rudimentary of offices has at least one but more likely several networked PCs. Faxes are still used but not much. In fact, in most offices, the fax is not used at all. Most people prefer to exchange files via emails and directly from web sites. Phones are capable of such a variety of functions that most of us use only about 10% of the capabilities available.

What about the world of electronics? Remember when a mobile phone was high tech? The first ones were hard wired into your vehicle, cost over 75 cents per minute to use, and were like dumbbells in your hand. Computer storage? RAM? A “big, lusty, powerful” PC in the late 80’s had 640K memory and 20 MB hard drive. The very best software engineers and computer programmers were the ones who could wring the most productivity out of miniscule memory and storage. Today we have more computing power, graphics capability, and memory in our Blackberries and IPhones than in those computers of yore. (Your children would laugh to see what you used to call a computer.)

What does this say to today’s entrepreneur? I believe it states quite clearly that there will always be opportunities in the world for those who innovate and can envision the future. In the field of electronics, I am quite sure that a majority of engineers are sitting at their desks at this moment with “The next great innovation” turning over and over again in their brain. Let’s face it, a little daydreaming never hurt anyone and an innovation needs to start somewhere.

Ok, now the tough part. Not every great idea is worthy of a market. This is the part where every would-be entrepreneur needs to get tough and ask him/herself some critical questions:

Step 1) Market. Is there a market for my innovation? You may think it’s a great idea, the market may not. The bottom line is, “Will someone pay for your great idea?” If the answer is “yes,” then you should put a bit more time and effort into viability research.

Step 2) Viability of idea. To be practical, start with the sources “in your backyard.” Who are those people in your life that will listen to your idea and give an honest evaluation of the likelihood for success? (Remember, they need to listen critically without laughing.) Start with associates in your business and then proceed to those outside of your business. Those within may have the same biases and point of view as you so be sure to solicit the opinions of others outside. Don’t forget to ask your spouse. I’m not kidding here. My wife has saved me on more than one occasion from throwing time, effort and money away. It’s important that those outside of your business can understand what you have in mind; if not, you probably haven’t thought it through. Try again.

Step 3) Market Research. Dig a bit deeper. The internet has innumerable sources from which to glean vital information without spending a lot of money. Yes, it would be wonderful to assign this task to the marketing department but don’t forget…you are the marketing department. This is a good time to find a mentor. Someone who can help critique your idea as you look deeper into what exists in the market that is similar, what customers are willing to pay for it, how many potential clients are out there. From there it is hoped that one can quantify the results and begin to consider how to build a business plan.

Step 4) Business Plan. Have you thought through everything in excruciating detail? Is everything quantified? Do you know exactly how many units you can sell for what price? What markets? Re-sellers? Direct Sales force? Who you will hire at what salaries? How much money do you need, when, from what sources, etc.?

Ok, let’s get real. You probably don’t know everything that you need for your venture but if you have gone through the first three steps you likely at least have some of Step 4 in your head. It’s time to commit your plan to paper and a spreadsheet and start talking to those who can help critique your idea. If you’ve made it this far, then perhaps you do have an innovation that the world wants or needs and can make money, too. It is my belief that every good entrepreneur has at least one business plan in his head; more likely he has several. Innovations may start in the mind of the entrepreneur, but they need to pass the scrutiny of “the market.”

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