Large companies can be entrepreneurial, but as a company scales up it is difficult to maintain entrepreneurial momentum. For example, several promising employees left Google for the relatively entrepreneurial environment of Facebook. This is a natural phenomenon in high-tech enclaves such as Silicon Valley, but there was reason for concern because Google had grown to 23,000+ employees. Google was being viewed as slow and lumbering, too bureaucratic, and too slow to respond to the innovative possibilities of emerging technologies. Google has taken several steps to retain entrepreneurial talent by permitting them to work independently and letting them recruit individuals with relevant skills. It does not matter if a firm is a gigantic monolithic multinational or a small start-up company manufacturing kazoos or even a mom and pop organization designing and launching Web services. The objective is the same: design products and services that are new and unique, easily differentiable, and adaptable to the needs of consumers. Entrepreneurial guru, blogger, and author Guy Kawasaki describes the situation perfectly:
“A great company anticipates what a customer
needs—even before she knows she wants it … the key to driving the competition
crazy is out innovating, out servicing, and out pricing … Create a great
product or service, put it out there, see who falls in love with it …”
Jeff Bezos, founder and CEO of
Amazon.com, and Steve Jobs, the former CEO of Apple, are excellent models of
serial entrepreneurship and the differentiation strategy. Many businesses give
lip service to the notion of satisfying customers’ wants. Bezos means it. He is
a maker of markets, a veritable doer and inventor. Amazon did not have skills
in developing electronic books or selling cloud computing, so Bezos embarked on
a mission to develop competencies in electronic books and cloud computing. His
goal was to satisfy customer needs for books anywhere and computing anywhere at
any time at an attractive low price. Bezos even enlisted a Harvard MBA to craft
a business plan for the cloud computing initiative. Here is the essence of the
Bezos approach for developing new businesses:
• The business should be capable of
generating significant returns.
• The business should be able to scale
substantially.
• The business should address an
underserved market.
• The market should be highly
differentiated.
• The opportunity should be in an area
where a company is well-positioned to provide a new service.
Steve Jobs was always an experimenter
and a doer. Although some of Apple’s products, such as the Newton, the Lisa,
and Apple TV, might be considered failures, he bounced back numerous times and
introduced dazzlingly exceptional products that have and still are dominating
the market. He is a superb example of an experimenter who sometimes failed in the
marketplace, but learned from his mistakes and achieved subsequent success.
This is the hallmark of the serial entrepreneur. Our view of innovation does
not require an expensive research lab, but it can. It does not demand a large
team of physicists, chemists, engineers, and software developers, but it can.
It does not need lots of money, even though it helps. Innovation, as always,
just demands hard work and constant attention to searching for new ideas and building
things, and is often accompanied by failure. Success is the result of a never ending
process of trial and error and being entrepreneurial.
No comments:
Post a Comment