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innovation
new comers
fear of failure
buying habits
innovative ideas
new businesses
amazon
important things
Why Are Business People Afraid Of Innovation?
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Why Are Business People Afraid Of Innovation?

The most profitable and long lasting businesses are coming from an innovative idea.

Coming either with an innovative product (we can think here at Apple) or with a new way of serving customers (Dell or Amazon are probably the most famous examples), innovative businesses are in most cases the winners on the market.

Yet, the overwhelming majority of new businesses coming into the market are ‘me-too’ businesses.

Replicating a business model that worked for others is the easiest way which many entrepreneurs are choosing.

Instead of entering the market with an original and relevant competitive advantage, they prefer to try to be cheaper, faster or simply better than others.

A very old business law says that the higher the risk, the higher the reward.

Knowing to evaluate risk and to minimize it is one of the most important things entrepreneurs should master.

Fear of failure makes most entrepreneurs being reluctant in promoting innovative ideas. They think that if no one came with something similar before, it means that the idea cannot work.

And they prefer to take a successful business model and offer to their prospects what they are used to purchase.

What these entrepreneurs don’t realize is that sometimes this way can be more risky than it looks like.

When a new company tries to beat their older competitors in price or in time to market, the probability to succeed is very low. The companies being for longtime in the marketplace have more resources and are able to even afford to lose a little while to eliminate the new comers.

A small new company will never have the strength to support a price war.

At the same time, entering the market with no competitive advantage and doing only what everybody else do, will bring in the best case a very small profit.

By bringing on the market something different than others a new company risks to be ignored by people having established buying habits.

Here comes the role of research and communication.

Research helps to test the idea before launching it on a small group of prospects to see their reaction.

Then, the most important part of the marketing strategy is how the idea is communicated. A new idea should never rely on sales. The demand for the new product or for the new way of purchasing it should be created before launching the business.

There are a lot of marketing tactics helping to successfully launch new ideas on the market.

Putting in place wise pre-launch campaigns draws prospects’ attention and awareness about the new idea coming into the market.

In this way, the future customers are prepared to receive and try it.

Researching the target customers in advance significantly reduces the risk.

On the other hand, a successful launch can secure a long lasting profit for the new company, profit which would never happen to a ‘me-too’ business.

Remember that business is not a lottery. It is a project and like any other project it should be carefully prepared in advance and planned.

So, if they want to be profitable, entrepreneurs need to find ways to overcome their fear of failure and dare to be innovative. The best way for them to do it is to learn more and get inspiration from successful businesses.


Street Talk

I think you're spot on! Great article!

Reply
  about 8 years ago
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