Innovation and Entrepreneurship summary

So far we have talked about two internal sources of innovation. But there are two more – process need and incongruities – which we will explore in this blink.

Process need focuses on finding a weak link in a process, because a weak link is a perfect opportunity for an entrepreneur to innovate.

Not all the opportunities for innovation come from within an industry, market or business. Some come from the outside world, like social, political and academic fields. These are known as external sources of innovation. Let’s take a look at them.

One external source of innovation comes from understanding demographics, because when the population changes, so does the market.

It is often thought that innovation is a phenomenon limited to small, hungry entrepreneurs, but this isn’t true. Businesses can also be innovative. However, in order to do so they must follow certain steps.

The first is to have standardized policies that create an environment where innovation can flourish.

All new enterprises need to have a plan. Specifically, they need to plan what they are doing now so they can continue in the right direction. To build an effective business you need to follow four steps.

The first step is to focus on finding a market.

When you enter a market as an entrepreneur, you need to find a way of securing yourself a market share. In order to stand the best chance of doing this, you should adopt an entrepreneurial strategy.

One such strategy is to be the “Fustest with the Mostest,” meaning the aim to be the first in your field and then exploit that advantage.

The next entrepreneurial strategy involves finding the gaps that your rivals ignore. The author defines this as a “Hit Them Where They Ain’t” strategy. There are two ways to do this: creative imitation and entrepreneurial judo.

Creative imitation is where an entrepreneur imitates a pre-existing idea but applies it in a way that is more appealing to customers.

Quite often, an entrepreneur can be successful if they specialize in one particular area. The author defines this strategy as ecological niches, and there are various ways to discover them.

The first is that you can follow a toll-gate strategy, where you gain market control through a product or service which is a vital aspect of another product or service.

In this final strategy, the innovation isn’t a product or a service, but the strategy itself. It centers on taking an established product and creating a new customer demand for it.

Let’s look at two ways of doing this.