“Build a better mouse trap and the world will beat a path to your door.” Or something close to that, right? Well, sometimes, but definitely not always. What will win the day in the new economy we’re facing? What products or services will you innovate to offer? What nifty new thing will you offer at that next industry show?
We can all think about instances, perhaps very close to home, where we had a better product or service and we still didn’t get people beating a path to our door. Sometimes, we might have a superior product and terrible service, but people overcome their reluctance and purchase anyway for the convenience. An example, much in the news these days, is the situation with the iPhone. Just about everyone I speak with who has an iPhone simply loves it. I have to admit, the iPhone is the first Apple product that I wanted, I mean, really wanted – until I found out it was exclusive with AT&T. I passed because of that (everyone has a favorite telecom to “hate”.) Apparently, that was the right decision in some respects, because those same people who gush enthusiastically about their iPhone will, more often than not, tell you in the same breath that they “hate” AT&T. Dropped calls, poor bandwidth and the legendary “terrible” customer service takes its toll eventually.
Enter Google with it’s new offering, the Nexus One. I have no idea, personally, whether this phone is a technological iPhone killer or not. Some say it is. What intrigues me isn’t so much that there is a new phone out there that may be as good or better than the iPhone, it’s the business model that Google is trying to put in place. The phone is not tethered to any one carrier. You can purchase it on-line from Google and take it in to your favorite carrier and have it activated on their system. There’s also the “problem” that now Google is competing in hardware with some of the other handset manufacturers using the Android software. Interesting. I’m not sure how this will shake out.
Here’s what I am interested in, and that’s the innovative business model changes. I’m thinking along the lines that while it is of course a good thing to have great innovative products, I think the real business leverage comes from having an innovative business model. The internet provided a lot of innovation in that respect. We now do much of our shopping on-line and even the “bricks and mortar” guys have been forced to allow us to shop that way. Being able to do so may have saved the retail season since many folks were not able to get to the stores due to inclement weather in much of our country.
I’m seeing lots of innovation around business models even for some of the “mundane” businesses. Consulting for example, is being changed by a shift in pricing models to one where “customer satisfaction is being guaranteed” or “your money back.” There have always been a few consultants where were brave and confident enough to do this, but it is moving into the mainstream now. How we sell (a big topic on this blog) is quickly evolving to a model of “not selling” and “not pitching” but rather one of being at least consultative selling (relationships and a source of information) and at best trust based relationships selling (the vendor authentically has your best interests at heart). We no longer need much in the way of product or solutions based selling – they are too manipulative and I can get product/solution information free over the internet.
Another area of our business models that demands changes is in the area of marketing and branding. Seemingly out of the blue, if you aren’t watching the social media sites, you may not only be missing out on the positive aspects of building an image and brand, you may be missing out on what could be your own obituary as people trash your image because they are unhappy for one reason or another.
This all adds up to trying to figure out how to build a new and innovative business model as a solid foundation for launching a new killer product. Imagine if the iPhone was available to you on your favorite carrier. You could avoid your favorite one to hate and still have a great phone. Speaking for myself, if the iPhone had been available on my carrier, I’d have one on my hip today. Google may be doing this for us. Even if the new Nexus isn’t quite as good as or better than the iPhone (and most reviewers say it’s “at least as good” at this point) those who have iPhone envy will likely make it successful.
Then there is the Google foray into the energy business. They are a huge consumer of electricity and want to now be able to help others with the conservation techniques they have learned as well as resell power since they purchase so much anyway. Interesting. Talk about a change in product mix! I’m not sure how they will innovate the way in which power is purchased and resold, but I’m confident they will make changes somehow.
So the question is, are you looking at how to change the way you do business – that is, changing your “business model”? Will you build a new foundation on which to provide the same services or products in a new an innovative way and thus take market share? Are you still trying to “go to market” the same way even though things have changed and hoping for a new an innovative product to carry you through? What’s your game plan?