Four Ways for Canadian Start-Ups to Innovate
Innovation can be defined as introducing something new or making significant improvements across one or more of the following areas:
- Products and Services
- Organizational Methods
- Marketing Practices
- Business Processes
Innovation that is viewed in this broader context is called Business Innovation.
1. Product Innovation
This can take the following forms:
- Launching new products
- Extending existing products
- Transforming existing products through an extensive redesign
To drive growth, start-ups should focus on true innovations that are either ‘new to the market’ or ‘new to industry’.
It’s important that when developing new product innovations, start-ups must engage with potential customers and prospects early in the product development process to ensure that the offerings being created are what customers really need.
This seems rather obvious and straightforward. However, lack of product-market fit is still the Number 1 reason for start-ups failing. Therefore, engaging with customers and prospects to understand their needs, priorities and pain points must be a priority for Canadian start-ups to succeed and grow!
2. Service Innovation
Start-up founders and managers should also consider if it is feasible to innovate their service offerings. Two options for consideration are as follows:
- Digitize Your Offerings: Determine if opportunities exist to convert manual processes or traditional services such as training, service, and support into mobile or web-based offerings.
- Meet the Bigger Customer Need: Become the ‘one stop shop’ for your customers by creating comprehensive customer solutions. That is, create “packages” or “bundles” consisting of products, services, and information to help your customers’ achieve specific objectives or outcomes
3. Organizational Innovation
This involves introducing new business practices and organizational structure such as alliances and partnerships. By doing so, start-ups can gain access to new markets and customers as well as new skills, knowledge and technologies to enable them to develop new products and services as well as drive other forms of business innovation. All of these can help to drive start-up growth.
4. Marketing Innovation
Marketing innovation is often aimed at opening up or entering new markets or positioning a company’s products and services. It can be changed in a variety of ways. Marketing innovations that start-ups typically use to drive growth include:
- Geographic expansion
- Brand/Line extension
One form of marketing innovation that is less widely used by start-ups and should be considered is advocacy marketing whereby, the start-up uses its existing clients and customers that are advocates (ie Raving fans) to endorse and promote its products and services to other prospective customers. It’s effective because peer to peer dialogue is considered to be more trustworthy and authentic particularly in B2B purchase decisions where over 80% decision makers start the buying decision process with a referral.
To get the most out of this approach, start-ups should establish a coordinated and formalized customer advocacy program.
It is important to recognize that business innovation can occur on 3 levels:
- ‘New to the World’: These are ground-breaking and are what people typically think of when then think of innovation
- ‘New to a Market or Industry’: This occurs when a concept or idea is taken from one industry and applied to another industry in a new way, context or situation
- ‘New to a Company’: As implied, this occurs when new concepts or approaches are introduced into an organization that has been used by other companies and/or industries
Why Is Business Innovation Important?
Innovating across multiple areas enables companies to differentiate and compete. Focusing on just product innovation which is typical of many technology-based start-ups can result in the commoditization of your offerings as your competition will offer similar offerings and pursue the same customers.
An even more important reason for start-ups to innovate across multiple areas is that it drives business growth. Studies have shown that innovating 3-4 areas results in double the earnings improvement compared to companies that only innovate in one area.
About The Author:
Michael Haynes is a B2B Customer Strategy Specialist, helping owners and managers of Start-Ups and SMEs build and grow sustainable, profitable businesses by using customer-driven strategies. Read more about how to drive growth in your start-up through innovation in Michael’s book, Listen Innovate Grow. Available on Amazon.com