Real innovation is becoming scarce day by day. It is being replaced by fund-raising celebrations. There is no dearth of problems or issues to be tackled; instead, most of them spend a large portion of funds on rebranding, marketing, and serving unsustainable claims
One of the perennial questions I have been asking every startup I consulted in the past ten years is, “What is new in this product or business model?” But most of them—rather all of them—usually come up with one standard answer, which is, “It works in Silicon Valley.”
And that is one of the biggest issues in our innovation and entrepreneurship system. It suffers because it relies too much on Western business models and ideologies. But while it relies on those models and ideologies, it lacks the thought process, infrastructure, and, most importantly, the spirit in which everything is done.
So, what is the real problem here? Why can’t we think independently and innovate better? I can think of at least three key issues. The good news is that if we can identify those issues, we can also fix them.
Issue # 1: The definition of innovation
The word disruption has been widely used and abused in the context of innovation. But why do we have to be disruptive when being constructive is better? The definition of innovation can sometimes be rather too broad. However, if you were to look at it from the customers’ perspective, innovation is something that improves their condition.
Innovation is something that improves the human condition.
This means thousands of innovations that micro, small, and medium companies deploy regularly are equally valid and sometimes more important.
Issue # 2: The practicality of the innovation
Our innovative thinking has taken a serious hit with the educational system geared toward creating workers and followers. However, it doesn’t stop there. So many startups I interact with do not show a good understanding of customer problems and intent. This shows up in the solutions they create. It results in a solution-heavy approach rather than a problem-centric approach.
For a startup, profit should be more glamorous than the (debt) funds they raise.
Innovation is not about finding solutions. It is about finding problems that need to be solved and then solving them.
We forget that innovation is not about finding solutions. It is about finding problems that need to be solved and then solving them. Most founders are good at building solutions but, unfortunately, they do not know how to identify the real problems. So, most founders follow Western ideas and make local versions of them. The result? Impractical innovations that fail to deliver at the local level.
Issue # 3: Debt-focused thinking
This is perhaps the biggest reason why innovation takes a backseat. Nowadays, raising money, that is, taking debt, has become more glamorous than gaining customers and increasing revenue and profits. We somehow have managed to ignore fully-working solid business fundamentals, such as, equity is costly, the customer is like a God, and profit or cashflows are the bloodlines.
Most entrepreneurs you would see are doing exactly the opposite. They sell out equity to raise an enormous amount of unwanted money. They ignore customers’ intent and real problems. And, unfortunately, give priority to burning (the raised) money in completely unnecessary or avoidable activities.
Result? Real innovation is becoming scarce day by day. It is being replaced by fund-raising celebrations. There is no dearth of problems or issues to be tackled; instead, most of them spend a large portion of funds on rebranding, marketing, and serving unsustainable claims.
In my view and experience, profit should be more glamorous for any startup than the (debt) funds they raise. We need to stop accepting and spending good money on bad activities. Instead, we must start questioning such business models. Then only we can see better innovations coming up.
The point is
I completely understand that many would like to see this article as a rant. But if we really believe and want to shine in the world as a better economy today, we must change our outlook. Instead of showcasing ourselves as the largest market (of consumers), we need to highlight ourselves as the origin of high-quality innovations.
Direction of innovation is driven by how ecosystem responds to it.
The three issues I mentioned are easier to fix than you might think. Of course, some will take longer than usual. But none of them is impossible. And this is what we should start doing today to make it happen:
- Remember that innovation is not always about bigger things. Small yet important things matter. They matter to the end-users and customers. This is why we must start celebrating and highlighting them. This, in turn, will encourage other entrepreneurs to follow this path.
- Focusing on customer problems and intent must be touted as the key to better innovation. Entrepreneurs must avoid copying business models and products from other markets—not from the IP point of view, which is still a big issue, but from a relevancy point of view, which is more important. Again, we need to celebrate appropriate behaviour and stop condoning inappropriate one.
- Borrowing more money is not a badge of honour. Generating revenue, profits, and more customers are. Deep down, we know it. Now we need to make it known to the ecosystem.
A lot of times, the direction in which innovation goes in any ecosystem is driven by how that ecosystem responds to it in the first place. So, as an ecosystem, we must understand better innovation. And beyond that, we have to encourage it more and more.
Anand Tamboli is a serial entrepreneur, speaker, award-winning author, and an emerging-technology thought leader