As the world economic crisis rages on, we will soon experience the effects of negative earnings and growth caused by a retraction in global GDP. We are now on a lengthy sojourn through a desert of retrenchment brought about by unprecedented dislocations in credit markets. The global consumer is intimidated by fear and is reacting emotionally.
But, while the public markets are reeling, there is an oasis on the horizon. That oasis is an island of entrepreneurs whose product is change. Change brought about by significant innovation, the prime mover of our economic engine and I assure you, it is alive and well. I am struck by the sheer excitement and energy caused by the parade of entrepreneurs that present highly disruptive technologies that we review everyday at Genovation. The creativity and the resourcefulness of the innovators spirit is the backbone of American economic might and it will lead us, again, to a new plateau of prosperity.
I am heartened by the creativity and the energy of the innovators spirit. The time to invest is now. Those investments targeting the truly disruptive changes in communications, media and the Internet, will yield uncommon returns.
One of the questions entrepreneurs should answer as they create their company is whether the idea they have is a product or a feature. Either can form the basis of a successful company, but each requires a different approach - especially when it comes time to sell the idea to a customer.
A product solves a customer problem and functions in a relatively stand-alone fashion. They are easier to create business plans around, since the market, the alternatives (competition), and the sales process are usually easier to determine. Features are an improvement or enhancement to some other product, service, or ecosystem (pick your favorite word). A feature might be an improvement to a user interface, for example. Let’s say you have the killer idea for doing Internet navigation on a TV from a one-fisted remote control (a made-up example). Issues solved are how to move a pointer around the screen and how to type a full alphabet with one hand. Okay - who is the customer? The video service provider? Maybe in the case of a satellite company, who have the receivers and remotes made to their specifications. But in the case of a cable company, do you go to Cisco and Motorola? Do you sell the cable operators on going to these two and demanding your idea be incorporated into their set-tops? Do you rely on true2way and try to work as an independent application on the set-top? Are you just the user interface or are you writing the web browsing software also? If you are the browser, where is the virus protection done (so the set-top is not infected by rogue software)? Do you go to Consumer Electronics companies (TV set manufacturers) and enter the market that way? Is your idea most compelling as a gaming interface (think the Wii motion sensing controller)? And so forth.
I’ve just made up one example of a killer idea - but as a feature and not a product, life is more complicated.