Taking the Safe Route

Whenever I hear about Harry Potter, I always think about how the book was rejected by the large publishing houses. Somebody, somewhere in the large publishing houses, took the safe route and chose not to accept the first Harry Potter novel. Why this individual decided not to say "Yes" will forever remain a mystery.

But let's not point fingers. It wasn't so much an individual that resulted in a rejection, but the system within these publishing houses. Often, these firms are just not set up to take on higher-risk novels.

It is likely that a couple of forces were at work: individuals were most likely not rewarded for taking risks (financial and recognition rewards); and the publishing house was following an "exploiting" innovation strategy, which refers to strategies that focus on what is known to work, as opposed to an "exploring" innovation strategy, which concerns innovation strategies that probe those areas that are less certain.

But J.K. Rowling did find a willing partner. The guys at Bloomsbury said, "Yes." There's a definite lesson here: if you are going to introduce something very "new," you should avoid larger firms like the plague.

Rates of Entrepreneurship

Quite an interesting article in today's Taipei Times on entrepreneurship by Robert Shiller, professor of economics at Yale University, and the factors that influence how many entrepreneurs a nation produces. Some of these factors may surprise you: for example, people with "pizzazz and brilliance" tend to open fewer businesses than people who value "hard work and resolve."

There is also a piece which discusses the anatomy of the entrepreneur on Alex Bellinger's SmallBizPod#13.

Not only are these pieces concerned with the traits and behaviours of the entrepreneur, they also shed light on the context in which innovative activities occur. It is this factor, context, that pretty much determines what happens to ideas as they emerge in a firm.

Innovative logos

"They can and will follow him, first individuals and then whole crowds." - Joseph Schumpeter on the entrepreneur (1942, p.133)

Here are a couple of photos from the streets of Taipei, Taiwan. You can see how these logos are surprisingly similar:





This is what firms are up against as they operate in Asia. If your business works, or is perceived to be working, you can expect a deluge of local firms to enter right behind you.

Global Confusion

Brands and the firms that own them often create different images in our minds.

This is an interesting article from 2003 about French's mustard. The owners of the brand (Reckitt Benckiser from the U.K.) were a bit worried that sales would slow down due to anti-French sentiment in the United States.

Here was the official line:

"The only thing French about French's Mustard is the name," the company announced.

Fair enough. What this spokesman failed to do, though, was mention that French's mustard is the brand of a British company, not an American company.

This is old news for many, but I thought it was interesting.

Feedback

One of my friends here said he wanted more humour on Broken Bulbs! And I thought to myself, "All right. I'll try and lighten things up a bit." Then, I had a bit of time to reflect and decided that I would just keep things as they are: not necessarily dour and miserable, for fear of strengthening people's impression of the Scots, but definitely not super chipper either. So we have Broken Bulbs in black and white, a non-smiling photo, and, today, an article by Christopher Lingle, economist, on China's fragile economy.

On a brighter note, another old British brand, Rover, gets another chance to build its former glory after the brand's current owners reached a deal.

Actually, Rover could do well since consumers don't usually care who's behind a brand.

Who owns Scotts porridge oats? (Pepsi/U.S.)

Who owns Jaguar? (Ford/U.S.)

Who owns French's mustard? (Reckitt Benckiser/U.K.)

Who owns PC-cillin? (Trend Micro/Taiwan)

Will Chinese or American consumers care that the Rover they are driving is actually owned by a Chinese firm?

Europe Lags in R&D

Interesting article on Europe's expenditure on Research and Development (R&D).

BBC Innovates

For a variety of reasons, particular countries are particularly good at particular things. Germany can make very fuel-efficient and clean car engines while America can't. Japan has mastered inventory control while Australia struggles. China can make Christmas lights cheaply, but can't manufacture a nuclear power station. No country can do all things equally well.

Britain is good at making television shows. The BBC is one example of how state-supported businesses can still be very innovative. There is a lot of debate going on at the moment on the impact of Podcasts. The BBC obviously is not underestimating the potential of this channel of distribution for its own content, and has started offering podcasts. This fast response to podcasts by the BBC is very innovative indeed and doesn't bode well for Podcasters thinking about taking them on in a head-to-head battle.

Podcasters need to find a very narrow niche that the BBC is not motivated to pursue.

One Word

Why do ad agencies and branding folks think the rest of the business world are fools?

This description is a perfect example of pushing the limits of candor:

"With over two decades of combined industry involvement and experience, Pixellogo® is widely recognized as a logo design company with one objective in mind: To provide superior logo designs at a cost appealing both to the individual client as well as the multinational corporation."

Two decades of combined industry involvement and experience? What does this mean, exactly?

This site contains a lot of other dodgy language.

Naughty! Naughty!

This is a photo of a fake Louis Vuitton bag my wife bought at a store here in Taiwan. She told me that there are some excellent fakes and some that are just average.

 

This one is pretty good because the patterns line up well at the join.

Disruption of Traditional Universities

Why do many people dream of going to Oxford, Cambridge, MIT, or Harvard? Is it because they feel that these establishments provide them with the best education, or is it something else?

There is a dimension of prestige offered by these establishments in addition to the core offering of "a good education." It is this dimension, prestige, that is important for many of these universities' would-be customers.

The Open University in the UK and the University of Phoenix in the US cannot compete along this prestige dimension, but what they do offer is the dimension of accessibility and convenience. As they start to become established and release their very capable graduates into industry; their prestige dimension also starts to improve. When this happens, these universities will pose a real threat to traditional universities.

It may take years for this to happen, but it is an example of disruption in action.

What Is a Disruptive Technology?

Clayton Christensen now uses the term "disruptive innovation" over disruptive technology. So what exactly is a disruptive innovation then? This is a question that I struggled with for a long time until I read Robert Burgelman's book, Strategy is Destiny. He offers a great explanation on page 400. When reading the following, just substitute disruptive innovation for disruptive technology as this is essentially what Burgelman is describing:

"Disruptive technologies focus on a different subset of performance dimensions in a product's multidimensional performance space. These technologies are typically rejected by a company's existing customers and therefore are not further supported within the company's resource allocation process. Often the internal entrepreneurs associated with such initiatives leave the company to start a new one. After finding new customers interested in the different performance characteristics of the technology, performance on the other dimensions also improves over time. As a result, the customers that were earlier not interested are likely to eventually find the new technology good enough and may switch. This leaves the incumbent companies still working with the old technology in a difficult strategic situation."

Another really important point is that a disruptive innovation is not the same as a radical innovation. A radical innovation is just a major improvement along an existing performance trajectory. A disruptive innovation emphasizes a different performance dimension -- one that is not particulary important to incumbent firms' most profitable customers. This is often customization, convenience, or accessibility.

Innovating by Simplifying

Innovating by simplifying is counterintuitive because we tend to think of innovation as making things "better" than the competition. How about making things worse?

The Taipei Times has a story about the Logan, a low-priced car manufactured by Renault. For a variety of reasons, not all of them obvious, the Logan is proving to be a huge success for Renault.

Romanticism

I never thought of the entrepreneur as the romantic type, but after reading the 1968 introduction by Ayn Rand to her novel The Fountainhead, I think he may well be! Here's the quote:

" . . . romanticism is the conceptual school of art. It deals, not with the random trivia of the day, but with the timeless, fundamental, universal problems and values of human existance. It does not record or photograph; it creates and projects. It is concerned -- in the words of Aristotle -- not with things as they are, but with things as they might be or ought to be."

Podcasting Carnage

Remember the dotcom boom? A time when cool Web designers spent most of their time off snowboarding while the rest of us "who just didn't get it" were stuck behind our desks. A time when we'd by trying on our T-shirts "virtually" and all sorts of other weird things.

Turned out the Internet was just another channel for MOST businesses and not a source of competitive advantage. The Internet was available to all firms (as is a telephone).

It also transpired that it wasn't people in the more traditional jobs that didn't get it, but the investors and employees in these start-up companies. They were way off the mark.

So what happened to all these firms? To cut a long story short, these firms' business models were unsustainable. These firms were subsidized: first by investors' money, then advertisers. When these two things were out of the equation, their inability to turn a profit from operations was exposed to all. Sure enough, they collapsed.

Are we going to see a repeat performance with Podcasts? I suspect that many of the high-profile podcasts we hear about now in the media will be history in a few years, just like the likes of Boo.com.

I guess I am just a canny Scot. If you are in any way interested in Internet business models, read Michael Porter's (2001) paper, Strategy and the Internet.

The Romantic Entrepreneur

Peter Drucker wrote that innovation is the tool of the entrepreneur. But what drives entrepreneurs? Joseph Schumpeter offers numerous reasons why entrepreneurs do what they do: a desire to prove themselves superior to others; a desire to create a private kingdom; a desire to exercise one's energy and ingenuity. For the entrepreneur, financial gains are secondary, which explains why already wealthy individuals carry on looking for that next opportunity.

I found a site that offers Podcasts for small businesses. SmallBizPod #10 has an interview with a man who gives some very useful tips on how to "bootstrap" a business. His view that certain types of venture capital can be bad for a business is also shared by Clayton Christensen, author of The Innovators Solution and The Next Big Thing. Interesting stuff!

Non-enforcement!

This is a photo of a real 7-Eleven sign! Compare this one with the "fake" in the previous post below. The copying of logos and other intellectual property is something that still occurs in Taiwan despite constant pressure from the United States on the Taiwan government to fully enforce IP laws.

Intellectual Property Rights

This is a photo of a small street stand in the town of Hualien, on the east coast of Taiwan. While they have not copied 7-Eleven's name exactly, the owners of this small business have come pretty close. I'll take a photo of a real 7-Eleven tomorrow for comparison.