An idea – the key business ingredient: serendipity or skill?

Last week I watched the original wherethehellismatt for the first time. There are five major videos plus outtakes and background videos on YouTube. Like millions before me I loved the videos, but what I found intriguing was the ‘about’ section, which described the story of Dancing Matt Harding and his viral videos.

‘He put the video of his dancing adventures on his blog (back then people had things called “blogs”), and then in 2005 he found it on a new site called YouTube, where some kid had uploaded it, pretending to be him, and like a million people had already watched it. 

In the midst of all that, Matt got an email from a chewing gum company called Stride. They asked if he’d be interested in making another dancing video for them. He asked if they’d pay for it. They said, “Yeah.” He asked if he could go wherever he wanted. They said, “Pretty much.” So he said, “Sure!”

He made the video, and he got to bring his girlfriend, Melissa, with him to film it. The second video made Matt even more micro-famous, transitioning briefly into quasi-famous.

He mostly just danced in front of iconic landmarks, but along the way he went to a country called Rwanda, and since there aren’t any landmarks in Rwanda that you’d want to dance in front of, instead he just went to a small village and danced with a bunch of kids. The kids joined him immediately and without hesitation. That ended up being the best thing that happened to him on the trip. The kids taught him that people are a whole lot more interesting than old landmarks and monuments.

Matt went back to Stride and told them he did it all wrong and they needed to send him around the planet again. They said, “Okay,” and in 2008 he put out another video that showed thousands of people laughing, smiling, and goofing around together. It took him five years and three tries, but he finally got it right that time.

Visa hired him to do his dance in a series of TV ads that air across Asia and the Middle East, which introduced him to a thing called “Business Class,” and meant he didn’t have to worry so much about money anymore. He settled down with Melissa in Seattle, Washington and bought a house.’

It is quite clear from this synopsis that Matt’s success was mostly a case of serendipity – things appear to have fallen into place without too much effort on his behalf. Like many other viewers I imagine, I wondered whether I could dream up a similar venture to achieve success – it couldn’t be that difficult – after all I can dance badly too. I have had similar thoughts when watching programmes like Dragon’s Den that showcase the business concepts of budding entrepreneurs. Many of the successful ideas just appear so simple and obvious. The point is that I have not thought of them at the right time, nor put my ideas into practice, whereas successful entrepreneuers have had the ideas and also taken the risk in investing time and money into them.

So where do good business ideas come from, and can any business create a wherethehellismatt experience by throwing funds into R&D and then turning ideas generated from the process into successful goods and services? Certainly research into  innovation and idea creation suggests that Matt’s route to success is extremely rare and, in fact, there is no easy route to business success even with a substantial R&D spend.

The first entrepreneurial decision is consideration of the industry in which to operate. An excellent starting point for this process is Entrepreneur’s Business Idea Center, which provides links to 969 businesses. Examining the list of existing businesses ventures – many of which can be franchised – should stimulate the creative juices and spark the imagination.

For those entrepreneurs and businesses already operating, innovation and research into new products and services may provide competitive advantage, although innovation in itself may not always result in improvements in profits or sales. Now in its 8th year, Booz and Company has conducted an annual innovation study looking at how expenditure on Research and Development affects corporate performance. The 2012 study examined how companies generate ideas and then the success they experience converting these ideas into potential products and services. It found that the top three industries in terms of spending on R&D are computer and electronics, automotive and industrials, representing 66% of all expenditure on R&D in 2011. In terms of Global expenditure, the largest percentage increase in R&D spend was to be found in China and India, increasing 27%; admittedly from a relatively low base.

It was clear from the survey that firms cannot simply spend their way to success; businesses need the basic business fundamentals to be in place, such as appropriate business strategies and the management of innovation as a key business process. When interviewed 46% of executives felt that their organisations were ineffective in turning R&D spend into profitable goods and services.

“If you have a creative idea and it doesn’t create value,” says Matthew Ganz, vice president and general manager of research and technology at the Boeing Company, “it’s not technology. It’s art. If you’re all about value creation with no creativity, the accountants are going to take over. You need to prime the pump with creative ideas, and then you need to have rigorous processes in place to turn those ideas into dollars.” 

** Unfortunately, Boeing appears to have failed in putting in place these rigorous processes given their latest problems with Boeing’s Dreamliner and innovations in electrical systems and battery technology. As the Wall Street Journal observed, “Boeing’s experience offers a reminder that innovation—for all its value—doesn’t come as easily as a catchphrase. It can get messy.”

The second critical finding of the study called into question a common assumption about innovation that the means by which companies seek out and find good ideas tend to be vague, or fuzzy, or highly variable from one company to another. According to the survey, the most successful innovators in all industries have developed a variety of consistent, manageable practices that are well aligned with their innovation strategies and closely linked to their existing strengths and core competencies. These are likely to include close links to customers using market research, focus groups and observation of customer behaviours.

Forbes magazine has identified six general steps leading to create winning business ideas, which neatly summarises some of the findings of the Booz and Company study:

  1. Know there are ideas with your name on them. Find them.
  2. Look and see problems and opportunities within your environment. They exist.
  3. Based upon knowledge, imagine solutions to what you find. Ideas are born.
  4. Be zealous and passionate about your ideas. They’re yours.
  5. Test your ideas. Will they work and will customers want to buy them?
  6. Is the market ready for your ideas? Now or later?

Ultimately, although stimulating creativity and turning innovation and idea creation into goods and services can be promoted by carefully managed business processes, finding market breaking concepts is likely to be expensive and time consuming, with commercial success requiring a sprinkling of luck and good fortune as illustrated by Matt Harding’s experience. As featured in a previous post, this short, animated talk from Stephen Johnson identifies the vagaries of the ideas process and provides a wonderful overview of where good ideas come from.

IB Revision & IB Style questions

1. Define the following terms:

  • Focus group
  • Entrepreneur

2. Explain the reasons for setting up a business.

3. Analyse the factors affecting innovation that are are examined in the Booz and Company report.

4. Having watched the Stephen Johnson video, and read the Forbes article on creating good ideas, evaluate the extent to which firms can manage the creation of new business ideas.

Sources:

Forbes magazine

Strategy+Business

Booz&co

No Comments Yet.

Leave a Reply

Your email address will not be published. Required fields are marked *


*