Business models don’t last forever, so should you innovate or die slowly?

If you own a technology company, you’ll know that you need to continually innovate to stay not just ahead, but alive.

Technology changes fast, faster than you think. If you consider the pace of technological change it’s hard to comprehend how just a few years ago we all survived without smart phones and social media. So as technology advances, consumers demand more from it. To stay in business, you need to be ahead of the curve, hence the millions spent on skunk works.

Innovation is key to continued business success

Even outside of technology businesses, innovation is the key to continued business success. Take cars for example, the movement towards a lower carbon emission vehicle is seeing a huge rise in the number of electric and hybrid vehicles on the market. But this market is changing beyond power plant swaps.

Did you know that as early as January 2015 driverless cars will be allowed on the UK roads? You may have seen the ‘interesting Nissan Leaf’ developed by the boffins at Oxford University. This isn’t a pretty car but they have pioneered the development of technology to allow for self-driving vehicles. But then Google got involved and have been actively lobbying in California to allow their driverless vehicle on the public roads. And in Europe, the Swedish city of Gothenburg has given Volvo permission to test 100 driverless cars – although that trial is not scheduled to occur until 2017. Yes, technology is driving innovation in this market. But the market itself is changing…quicker than most people realise.

Where will you be in 5 years time?

If big corporations are pushing technology to find practical ways to deploy this innovation to make a commercial return, what are you doing in your own business to ensure that you’ll be around in five years?

It doesn’t have to be based purely around product and or service innovation. Over time, the whole business model can change. But before I comment on this, let’s pause and consider for a moment what exactly is a business model? My favourite definition is the “fundamental structures for how companies create, deliver and capture value”. Why? Because it sidesteps the idea of product and service offerings. Often, it’s not the product or service alone that determines business success, but the entire value structure around the offering. This is why it is important to look not only at what you are doing, but how you are doing it.

Markets are evolving…what are you doing to keep up?

As a business owner, you have two options; innovate or die slowly.

Look at a few different sectors that faced that decision:

  • In media, the print market has declined as digital has grown.
  • In retail – online shopping reduced the need for the high street outlets and now ‘bricks and clicks’ markets are growing. To see the next step in retail innovation look at how Google Shopping Express and Amazon Local will transform the online market.
  • In education, there has been a huge growth in online degree programs.
  • In music, digital music services soared as iTunes allowed for instant downloads but now we see streaming services deliver content that we ‘rent’ rather than ‘buy’.
  • Even in finance we can see how the creation of peer-to-peer lending is disrupting the loan markets.

What are you doing today to be different tomorrow?

If you’re a customer of mine, you’ll know how we love to innovate and be different. If you’re not, do you want to find out?