If you think back to your youth, you’ll find innovation everywhere. Whether it was engineering a ramp to jump your little brother’s big wheel, how to get somewhere without a car or the thousands of innovative ways we convinced our parents that breaking curfew was justified by unseen, surreal circumstances. The great thing about youth is that it full of innovation, and in most cases the most creative things are done without money. Coincidence?
For business, innovation has always been an ooh aah word to throw around, however it has increasingly become a reality and for some companies, their hottest asset. In fact, it’s commanding even greater focus than before. In 2013, PWC performed a study to try and get to the bottom of innovation inside of businesses and it showed 93% of executives indicated that organic growth through innovation, will drive the greater proportion of their revenue growth. Not better sales, not strategic relationships — Innovation. It’s safe to say that nothing has changed since 2013 and innovation is sitting center stage, and everyone wants a piece of it.
The problem is that many companies don’t have the innovation DNA, so instead they pump money towards innovation, but this may not produce results. The same PWC report states that dedicating more funds to innovation will not automatically generate growth. Agreed, because the tools for innovation many times have nothing to do with capital (money), but instead, creative capital (fresh ideas).
Money Sometimes Kills The Innovation Mindset
We’ve started a lot of businesses in our time, and have seen and consulted with exponentially more. What you find is that the ones that are amazing innovators are not cash rich behemoths that are encumbered by their incumbency, but the small broke upstarts that are continually transforming models.
Why? Well, if you think about it from an upstarts hard wired, underfunded mindset, they don’t have a choice. They know they don’t have the money and they know they need to scrap for their share. It’s that lack of money that starts driving them to come up with innovative angles on common problems. So what does the world look like from a broke upstart?
It looks like a million colored pixels to cut the fat, find the holes, digitize the process, crunch the model, reduce the labor, kill the middleman and rise up so everyone sings your innovation praises – and you do all of that without a big budget which prompted the innovation in the first place.
More Innovation Came From Friendship Than Money
Yes, we can see how you might find this idea a bit confounding, but if you take a moment to analyze some of the most innovative companies you use every day, it’s clear to see that it started with friendship, and not money.
- Google – Idea came from two friends (Page and Brin) with no money
- Uber – Idea came from two friends (Camp and Kalanick) with no money
- Apple – Idea came from three friends (Jobs, Wozniak, and Wayne) with no money
- Microsoft – Idea came from two friends (Gates and Allen) with no money
- Facebook – Came from Zuckerberg, but let’s face it, he settled with the Winklevoss twins for $300 million for stealing the idea so you be the judge. Either way, it was him and two brothers (twins and safe to say they were probably friends) and just some money
Sure these companies listed above are still innovative, but what do you do when you’ve grown exponentially through innovation and have reached a point where the money has killed the one thing that got you there in the first place? You do what almost all the companies mentioned above do, you go out and buy it. You take the best of the best and bolt their innovation onto your model to make you better, stronger and hopefully more innovative overall.
To be clear, innovation can happen with money and without it, but it’s hard to argue with the reality of our everyday world, that a lack of money drives innovation. This is not to say that healthy capital given to a group of driven, innovative individuals can’t spur brilliance because capital always has its place, especially after the brilliant idea has been hatched.
For companies that do have plenty of funding and want to innovate, isolating an innovative entrepreneurial ecosystem within your company is probably your best bet. Entrepreneurial is the keyword here as that incredible, indescribable spirit is necessary for innovation. So, start squeezing the budgets, pull in the creative capital, isolate the team as if they’re sitting in your parent’s basement and start innovating.