The advent of the internet age paved the way for the age of innovation. The World Wide Web enabled us to make every social interaction better, cheaper, and faster. Not only that, the transfer of information has become faster than ever before.
Several investors who had recognized early adopters have been rewarded for funding big, game-changing ideas that were born in this era. The race was high, and being first matters most – test your idea early, fail early, and pivot early until you arrive at something that captures the masses.
That, however, is no longer the case. Now that several low-risk ventures have seen great profit, fewer entities are willing to venture into risky investment towards the unknown. As an entrepreneur looking for an investor, you must understand how much risk your field carries in the eyes of investors. Here are the riskiest fields that most investors are unwilling to venture to, from the highest to the lowest risk:
Consumers are even harder to convince. As more and more markets take on the characteristics of networks, the once reliable tools for introducing innovation simply don’t work as well now. The efficiency of advertising, promotions and sales force has declined in the recent years. So how do you market your innovation in such a hostile environment?
The Third Way
Wharton Professor David Robertson, says there is a way. Robertson is a professor who studies and teaches innovation and product development. He described this method as the “Third Way”.
“The Third Way consists of multiple, diverse innovations around a central product or service that make the product more appealing and competitive,” says Robertson. “What makes this approach work is that all the complementary innovations operate together as a system or family to satisfy a compelling promise to the customer. Thus, the family of complementary innovations must be closely and centrally managed.”
Companies who have tried the third way and succeeded include LEGO, Gatorade, Disney, and surprisingly, Apple. Many had the misconception that Apple uses disruptive innovation. However, since 1997, when Steve Jobs returned to Apple for his second, staggeringly successful career as CEO, he used a process that follows the third way, driven by four decisions that you could use on your startup as well. These are: