Even though we talk improving profitability, and our customers benefit from the profitable new ideas we help them generate, or generate for them, there are still plenty of innovative ideas which, when invented, have no connection to profitability. There are plenty of excellent ideas. Not all of them can be viable businesses.
This does not mean that the ideas are bad, the market may simply not exist yet, or the market exists but we haven’t been able to identify it yet, or its a product which is so new and radical that it can create its own demand (think iPhone – which was veiled in a shroud of secrecy in its beginnings).
Many visionary startup founders come up with their ideas too early. Maybe it’s just not a viable idea yet.
There are plenty of very profitable companies out there today which had nothing when they started. They had zero revenues, no market to identify, and some even had no business model. Many of them looked to drive traction first, then eventually figure out their business model. The list of these companies is long – Twitter, Flickr, Google, Snapchat, Instagram among them, had not figured out a market that would pay them for the service.
In the case of Twitter, it was a skunkworks project, born from a podcasting company called Odeo. When Twitter launched, it was supposed to be a tool to allow podcasters to alert listeners that they had a new show available. None of these high flyers were looking at profitability day one – some of then took years to figure out their business model and make money – but make money they did, and now they are giant multi-billion dollar companies.
So if you look at these highly profitable companies today, and realize that they had no market, no profits and no business model day one, why do we insist that our internally generated crowdsourced innovative new products ideas need to have an immediate prospective ROI, before they are even born? Are we so concerned that we will lose money on a few experiments that everything must have a solid business case to a market that exists today? Most of the best ideas are so innovative that they aren’t even designed for the market of today, but an unknown market of the future.
Why should we insist that our ideas need to go through a rigorous business case process when there are plenty of startups out there just winging it and seeing where things go? If anything, you are a significant corporate enterprise with the many profitable business lines. If anyone has the leeway to experiment with bold new ventures, it’s you. So the question is, are you? If you aren’t, why not? If startup X with very little money can experiment with bold new concepts and harvest a chunk of your customer base, why can’t you? You are much better suited to propose and fund these mini-experiments to see if the ideas have legs or not.
Think about venture capitalists who invest billions in hundreds of companies to get to a few huge winners. Surely you can invest in some of your own employee’s ground-breaking new ideas today.