What does it take to be a successful entrepreneur? Our world has many possibilities and opportunities for us. Our life and career however are not for ever. Hence it is necessary to be clear on our objectives and our wants. Having done that, we need to go at it with a single-minded purpose. Real entrepreneurs do that. Later, their innovative thinking helps in realising the objectives. Do entrepreneurs need to be disruptive and innovative to be successful?
As on May 2nd this year, India has 100 unicorns. In terms of valuations in the start-up ecosystem it means much. It means 1 billion dollars and more. Though they are all innovative they may not be disruptive. 15 of those unicorns account for 34.09 percent of the 44 that came new in 2021. A Unicorn was never known for its horn, beauty, or purity. It was known for strength and courage as one, said Nikole Beckwith an American actress, screenwriter, artist, and playwright.
“Disruption” occurs when a smaller company with lesser resources, successfully challenges, established businesses. It happens when established businesses focus, on improving their products and services for their most demanding and usually most profitable customers. While doing so, the needs of some segments are exceeded and some others ignored. Are innovations sought? Or do they arise in response to a problem? Both could be possible. Disruptors are innovators. However, not all innovators are disruptors. However, both are makers and builders. If disruption takes a left turn on how we think, behave and do business, innovation takes a right supplementing the idea.
It could be difficult to answer as to when a technology becomes innovative or disruptive? The internet was disruptive as it never mimicked a previous technology. It created unique models for people to make money that never existed before.
Most of the disruptive innovators look for markets that were never addressed before to gain a foothold and deliver better functionality at lower price. Those in the business may not respond vigorously since they are into chasing higher profitability, in more-demanding segments. The disruptors however, move upmarket preserving the advantages and delivering the performance whereas those in business are left to cater to the mainstream customers. When mainstream customers, start adopting the disruptors offerings in volume, disruption has occurred. However, to be disruptive, the network of partners, suppliers, contractors, and distributors must also benefit from the business models.
Five pillars on which innovation is measured are its Institutions, its human capital, its Infrastructure, its Market sophistication and its business sophistication. The political, regulatory, business environment, education standards, R&D culture, ICT, general infrastructure, ecological sustainability, credit, investment, trade, competition, market scale, its knowledge workers, innovation linkages and knowledge absorption, all make an impact on the innovation ecosystem.
The Global Innovation Index (GII), jointly developed by Cornell University, the Paris-based business school Insead and the World Intellectual Property Organisation (WIPO) in Geneva ranks 132 countries based on 80 indicators. India has been gradually improving its ranking to 46th place in 2021 up from 48 the previous year, 57 in 2018 and 81 in 2015.
There are several examples of disruptive innovation. Companies such as Amazon, Google and Meta (FB), formerly Facebook have disrupted, innovated and focused on the internet as a disruptive technology. Former large bookselling shops had to shut shop and ship out to Amazon because it displayed an inventory and shipped books to the buyer’s home without owning any physical stores in any town. It created an online shopping platform, whereby most of what’s offered in a physical store, including groceries could be ordered from its website. Actually, Amazon was a small, garage-born company that used internet to attend to the needs of a niche market of online shopping and book enthusiasts.
Netflix is another disruptive innovator. When VHS tapes and DVDs were being rented in great numbers from thousands of video shops, Netflix, using the power of internet, started catering to a large number of online shoppers. They allowed consumers to peruse their catalogue of DVDs, rent and have their selections sent directly to their home. Artificial intelligence used to learn from employees and performing their jobs too is a disruptive innovation for the job markets. However, today, competitors have successfully duplicated this business model, eating into the Netflix’s market share. It may not be long before Netflix too would need to re-innovate itself.
The hospitality industry has been greatly disrupted in the last decade with new technologies, online platforms and markets with initiatives like mobile check-in and robots providing room service to self-ordering restaurant menus while OTA dominance has declined. The future of hotel industry will see a dominance in SAAS, API Technology, Guest room technology innovation, Privacy & cybersecurity, WiFi 6, Big data and Digital hotel companies. Companies like Stay Alfred, Sonder, The Guild Hotels Selina and OYO in the alternate lodging segment called ‘hometels’ are the future.
The disruptive technology has also simplified travelling for us. The sharing economy has given rise to platforms such as UBER, OLA, BlaBlaCar. Their profits have seen exponential growth in services, profits, and number of users.
Another example of disruptive innovation are our smartphones which we use instead of laptops and desktops for our computing needs, including web browsing and streaming. Smartphones can be easily accessible, small and affordable as compared to laptops, tablets and desktops. The smartphones have small processors, chips, and applications to support many of the functions that we know of. They have become so useful that we tend to use them 24x7x365 for applications that range from banking to entertainment.
Employee creativity and innovation are essential for the success of any business according to a 2006 Gallup poll. The world’s most-innovative economy in 2021 is Switzerland followed by Sweden, the United States of America the United Kingdom (U.K.) and Republic of Korea.
In order to be an innovator and the country to evolve as an innovative hub, a culture of innovation must be fostered among its people and systems. Education is an important vehicle in that pursuit. High-tech manufacturing and high-tech net exports too make a difference.
We need to encourage local talent who can create enterprise solutions to local problems that have the potential for international scale. It can happen if we promote high-quality home-grown companies in large numbers.