Lessons Learned #1
Why Differentiation is the Death of Innovation
If we believe the experience of most innovators then we understand that innovation is typically born from failure. In my experience differentiation is a response to pressure – usually panic, induced by shifting economic or industrial paradigms. As we begin to see financial successes in our businesses, we tend to add more operational tiers to support the project *as it is*. We move away from envisioning an evolving business and begin to see it as a growing – yet singular – entity, where the endpoint is a larger version of the present. As a companies structure flexes under the pressures of bloating operational expenses and increasingly savvy competitors, the natural tendency (other than cost-cutting measures) is to look for ways to continue differentiating yourself from your competitors.
The problem with differentiation is that it’s uniqueness in not sustainable, and that it rarely offers *lasting* value back to the customer. Rather, it’s often a temporary solution to a much greater problem. In many cases, companies spend more time pondering how to extend (read: differentiate) the business as-is, rather than the bolder step of asking if they’re even playing the right game. I remember at one meeting, a group of people I truly respected asked a very brave question: “If we were to start this company right now, what would it look like?” The answer revealed something quite different from where they were. The question was a starting point – but for it to have meaning, it required action. Unfortunately, that question was left undone.
Another problem with differentiation is that temporary “wins” remove the space – the urgency – for substantial change (read: innovation).
Successful companies continue to evolve – they continue to reinvent themselves. They look to the future and don’t see a destination that comfortably resembles the present. They look to the future, embrace the unknown and revel in the opportunity it presents.
Why I’m writing these…
On one of my trips to Seattle to spend time at the mothership’s corporate office, I caught up with good friend Kelly Smith of Curious Office fame. Over a beer and some food we talked about the experience of starting-up a company – and the various lessons we’ve learned having gone through the process. I thought it would be worthwhile to put pen to paper to share the experiences and lessons I’ve learned starting-up Veer with you, and to keep them available as a reminder to myself as I look forward.
I hope you find it worthwhile.
ib.