BBC Link

Came across this great show from the BBC about consumerism. Part 1 focuses on Japan.


innovation in Asia

Guy Kawasaki

If you are interested in starting a small business venture, Guy Kawasaki of Garage Venture Technologies is somebody you should listen to and learn from. Here is what he said in response to a question from Alex Bellinger on the SmallBizPod podcast about the common mistakes entrepreneurs make:

"They always . . . always underestimate how long, and how hard it will be to get a significant revenue. I have never seen an entrepreneur say, 'In six months, we'll be doing X dollars per month,' and achieve it."

The same thing applies to large firms when they introduce disruptive innovations: Markets are going to take a long time before the innovation takes root. Clayton Christensen, co-author of The Innovator's Solution, argues that firms should adopt a "patient for growth, impatient for profit" approach.

So can we say that Guy Kawasaki, Clayton Christensen, and Bhaskar Chakravorti all agree that change isn't so fast after all?

the entreprenuer, innovation, disruptive innovations

The Slow Pace of Fast Change

You see a lot of book reviews on blogs, so I thought today I'd mention one of my all-time favourite books: The Slow Pace of Fast Change, by Bhaskar Chakravorti. One of the things I like about this book is its claim that the increased interconnectivity caused by the Internet actually slows down the pace of change. If you're an entrepreneur/business person, and you've tried to introduce a "new" product, you are probably well aware of this. Markets are stubborn beasts and they often take years and years before they accept an unfamiliar (risky) offering.

Just look at markets' resistance to non-traditional university education to see the slow pace of fast change in action!

This book is also interesting in that it defines "a market" for the reader, which is something that you rarely find in business books. I've always wanted to know the answer to that question: What is a market?

A must read if you are in any way interested in learning more about marketing, starting your own business, networks comprised of individuals with unequal influence and, of course, innovation! Brilliant stuff!



innovation in Asia

Aging capitalists

Joseph Schumpeter, economist, concluded in Capitalism, Socialism, and Democracy that capitalism’s days were numbered. This conclusion was in agreement with Karl Marx; however, Schumpeter's argument was very different from Marx's. For Schumpeter, capitalism would fail not because it was a useless economic system but, ironically, as a result of the social and cultural forces that it creates. Capitalism would fail because of its successes.

Schumpeter talked about the "rationalization of life," which would result in couples having fewer and fewer children, if any at all. This in turn would reduce individuals' desire to pursue entrepreneurial activities through innovation.

Whether you agree with Schumpeter or not, there has been a lot of talk about aging populations in the media. Here are a couple of links:

One from McKinsey Publications and another from Businessweek




Schumpeter, innovation management,

Don't forget the channel

Clayton Christensen, co-author of The Innovator's Solution, stresses the importance of channel innovation when trying to enter a country-market with a disruptive offering. His main arguement is that you have to find a channel partner who is motivated to sell your product. How do you do this? Your offering has to present higher margins relative to what the channel partner is already selling. Often this is not the case, so encumbent channels are motivated NOT to stock your product.

Here in Taiwan Uni-President, a Taiwan-based firm, has a lot of the distribution channels stitched up. They operate the franchise for 7-Eleven convenience stores. They also run the Starbucks franchise in Taiwan (and possibly parts of China). In a word, they have a lot of power.

You would think that Uni-President would be a good bet if you wanted to enter the Taiwan market (and China) with your product, however, you have to realize that there are thousands of food manufacturers from all over the world contacting this company with the same intention: sell my stuff. Why should Uni-President be motivated to stock your product? They probably aren't; and if they do, they'll hammer you on price.

So what do you do? Well, if you're are a whisky producer from Scotland, you could look at some of the smaller, independent coffee shops here in Taiwan. A bottle of single malt whisky will offer a higher margin for these coffee shop owners relative to what they usually sell -- cookies, a bar of chocolate etc. They, unlike Uni-President, are motivated to sell it.

"Doing starts with believing"

I first saw the above quote on the wall inside a high school on the television show "Jamie's School Dinners." Jamie Oliver's task on this show is to change the eating habits of kids in England, which is an unbelievably difficult task when you think about it.

Where do you start?

It is really interesting watching the way Jamie tackles this seemingly insurmountable task. It is also very interesting watching how things really start to take off once the kids actually believe what Jamie is saying to them.

I am convinced that one of the biggest obstacles facing anybody responsible for implementing change in people's behaviour is getting people to actually believe you.

Anybody interested in innovation management could learn a lot from "Jamie's School Dinners."

Innovate by giving less choice

Ever go buy a pair of shoes and get asked by the cashier if you'd like a bottle of leather protectant? Usually the cashier will offer you only one: she knows that you don't have time to think/compare/scrutinize different offerings. You just want to get out of the store and do what you have to do.

"OK. I'll take one. Throw one in the bag."

The same thing occurs in the online world at the check out. In most cases, though, you'll be offered more than one -- you might be offered six or seven.

"Oh yeah, let me just read about these and make another purchase." Not.

Often people cannot accept that offering less will result in increased sales. It's counterintuative, but it works.

Here in Taiwan, many of the traditional food stores offer only one type of food: E.g. Beef noodles; dumplings; or red bean cakes. It is these stores -- the ones that offer a limited choice -- that have the lines outside the door.

Snippets from the renegade province

There has been quite a bit of discussion recently about the "US$100-laptop" developed by the Massachusett's Institute of Technology (MIT) Media Lab. This discussion has also extended to the company that is involved in its manufacture, Quanta, a Taiwanese firm.

The Taipei Times has an interesting article on Taiwanese firms' reluctance to associate their brands with their country of origin, Taiwan.

Digitimes, a publisher of information technology news, has an interesting report on Taiwanese notebook shipments for 2005. According to their report, Taiwanese firms actually reduced the number of own- brand notebook shipments in the first quarter of 2005 with some own-brand vendors leaving the business completely.

It's not easy selling notebooks in highly competitive markets like the United States of America, so many firms here in Taiwan are trying to slip in under the radar to markets such as India, where there may be a better chance of making an impact with their own brands.

This leads to one of the most difficult questions for businesses: Do we actively look for competitive markets, which stimulates innovation, or seek out markets where we can avoid direct confrontation?





[Tags]: Innovation in Asia, innovation management, Joseph Schumpeter, ageing populations, product development, Innovation in China, Innovation in Taiwan, Innovation in India

Do we focus on the fruit bowl or the alarm clock?

One of the difficulties facing Taiwanse OEM/ODM firms as they attempt to sell their own branded products into the North American, European, Middle Eastern, and Indian sub-continent markets is developing market insight. Taiwan is a long way, both geographically and culturally, from these markets. This distance makes it difficult to really know what delights and what annoys customers.

Hiring local staff in these markets will only help if what this staff say is listened to, respected, captured, and communicated to decision makers involved in the design of these products.

So what feature of a product annoys a customer?
What feature do they place little value on?
Should we make sure our little flap doors -- discussed in the previous post -- feel solid or can we cut corners here?
Does an ageing population in Italy care about owning a "smart phone," or do they want something with huge buttons that's easy to use?
Do we have a system that allows us to answer these questions?


There is a good snippet in Businessweek that illustrates the importance of knowing what to innovate. The piece describes how the Hampton Inn motel learned that guests care a lot, and I mean a lot, about the alarm clocks in their rooms.


[Tags]: Innovation in Asia, innovation management, Joseph Schumpeter, ageing populations, product development, Innovation in China, Innovation in Taiwan, Innovation in India

Innovating in the right places

Taiwanese companies design and manufacture a lot of personal computing gear. You might see these products with somebody else's name on it, or you might see a Taiwanese brand name stuck on the product. Either way there is a good chance that a Taiwanese firm was involved in the product's design/manufacture somewhere down the line.

I recently bought one of these monitors from Shuttle in Taipei because I loved the design. One of the nicest monitors I've ever seen. The thing not only looked great, it was sturdy!

There are mini PCs that accompany these monitors, and I had a look at those, too. The salesman was telling me that the unit is "silent" and rattled off a list of specs that meant nothing to me. The only thing that really caught my attention was the flimsy little door at the front of the unit. It was very junky indeed, which made me wonder what the rest of the build quality was like. I am sure that there were plenty other customers who felt the same way, hesitated, and walked out the door. Out of politeness, these customers probably didn't tell the salesman what they really thought, and the designers may never know that the door is perceived as junky.

Luxury car manufacturers know the importance of a solid door. The designers of PCs could learn from these guys.

Another area that is often neglected is something as simple as the letters on the keyboard: We have an Acer notebook and the letters are already disappearing after about a year of normal use. Fading letters on a notebook keyboard look hellish. Unlike the Acer notebook, the letters on an IBM, which I bought ages ago, are as clear as the day the thing was bought.



[Tags]: Innovation in Asia, innovation management, Joseph Schumpeter, ageing populations, product development, Innovation in China, Innovation in Taiwan