Entrepreneurs see themselves as innovators. And rightly so in many cases. However, one of the biggest mistakes entrepreneurs make is believing that they have to keep innovating in order to survive. As a result, they spend far too much time and money trying to fund new projects and ventures when they should simply be growing their business by better executing in the spaces they’re already in.
Why does conventional wisdom hold that innovation is most important? For one, because innovation tends to be more glamorous, we’re more likely to remember an innovator. That, and the mis-application of business school thinking to entrepreneurs.
Business schools tell you that it’s important to be first to market, and that may be what’s best for a big company — owning an entire market place of its creation. But for entrepreneurs, it’s incredibly expensive to do so.
By definition, an innovator is first. Which means the innovator has to create the entire market him or herself. The trouble with creating a market from scratch is that the onus is on one to handle all the development costs, all the marketing costs and to step on all the land mines associated with creating the market. This is not a place an entrepreneur can afford to be. Instead, let someone else create the marketplace. Let them spend the money to build a customer base. Follow the business closely and learn from the innovator’s mistakes. Then, when the marketplace has grown, figure out a way to do the business better than anyone else in the space and make it happen.
This is the Steve Jobs method for execution.
People tend to think of Jobs as an innovator, and he has certainly had his moments, but for some of his biggest, most successful products at Apple, he was simply executing better than anyone else.
Take the iPod. Jobs, and Apple, didn’t come close to inventing the digital music player. Instead, Jobs let everyone else build the marketplace for him. In fact, at the time Apple introduced the iPod, there were already more than 50 companies selling portable MP3s in the U.S.
These three companies, along with others, must have spent hundreds of millions to create the market for digital music players. Not only did they absorb the upfront costs, but in the trial and error of innovation, they’d associated their brands with products that didn’t work.
So what did Jobs do? He let his predecessors create the consumer demand, and learned from their mistakes regarding size, space, format, access to music and battery life.
Then, he made a music player that didn’t have any revolutionary technology: it just had all the best functionality and design features on the growing market. Jobs executed better than anyone else, and it cost him less than his competition. The result was one of the most popular devices in the history of the world, released at exactly the time consumers were ready to embrace it.
Entrepreneurs shouldn’t waste their time trying to figure out what they can do that no one else is doing. They should instead focus their efforts on how they can do something better than everyone else.