Sometime in 2006, I decided that if I were going to be designing commercially successful products and strategies, I would need to know what it is really like to run a business, a business that would rely on the type of products and strategies that I would come up with.
Fred Wilson tells the story in this extraordinary post of how his investment company, Union Square Ventures, missed the opportunity to invest in Airbnb, one of my favourite peer-to-peers. At the time, the founders had ideas but the service was still a marketplace for air mattresses on people's floors. It was, he says, the classic investor's mistake of focusing too much on what the business were doing at the time and "not enough on what they could do, would do, and did do".
There was an Economist piece on Innovation a while back on Vijay Govindarajan and Chris Trimble's new book “The Other Side of Innovation: Solving the Execution Challenge”, dealing largely with innovation in established companies. There's much focus on ideas generation these days, perhaps more so than on what innovation really is: the commercialisation of those ideas. The perspiration stuff, not the inspiration stuff.
Innovation is an oft-used but oft-misunderstood word. Legendary journalist, editor and author Sir Harold Evans gave a lecture at the RSA a few days ago on the 'spirit' of innovation - what makes for successful innovation and what we can learn from some of the great innovators - the inventors and the entrepreneurs who took risks, were often met with disdain, but who originated transformational technologies, products and services. He talked about the myth of the lone inventor. The trouble with the 'Eureka Myth', as he calls it, is that it
In his presentation at the Behance 99% Conference in New York, venture capitalist Fred Wilson outlined his views on ten different types of entrepreneurial models for the modern Internet economy. These range the gamut from the single-person Sole Proprietorship (Matt Drudge) to the Project (James Cameron's Avatar) to the Breakout (Foursquare) to the Company (Twitter).
[Nuts & Bolts is a new category focusing on basic business practices for the entrepreneur or established business. Look for new Nuts & Bolts posts approximately weekly.]
I saw my brother-in-law over the holiday, and he mentioned a friend who had started a business selling duck calls. This friend was having trouble collecting from his retailer customers, with the result that he had outstanding receivables of $20,000. Did I have any advice as to how he could collect better?
Mitch Joel shouldn't need an introduction, but in the event that you haven't heard of him, he founded a successful Canadian based agency called Twist Image, is a well known participant at the intersection of business, social media and marketing and speaks on these topics often. When Mitch reached out to me, I promised no softballs, and his thoughtful replies make a great case for why you might want to investigate his new book, Six Pixels of Separation.
It is probably fair to say that at least half of the Fortune 500s today are operating on an obsolete business model. Technology disruption and business model innovation have shortened the life of many once great firms. The financial crises simply accelerate the pace of destruction. There’s a lot of myth about business model transformation let alone the definition of a business model.