Why Innovate?
We have seen several examples and types of businesses you can start. But it is important to know how to differentiate yourself from the many people who are presently offering something similar to your service or product.
And that is where innovation or your competitive advantage come in, that is, that advantage that only you have, your strength.
Types of Innovation
Jorge Lopez divides innovation into two dimensions: Technology and Market, which gives us 4 main types of innovation that form a square.
According to this figure we have 4 types of Innovation
1 – Incremental Innovation (Little by little)
This is an innovation that is occurring slowly, little by little through small innovations at a time.
Example in a Food Business:
As a Technological Incremental Innovation you can for example create a system that allows to serve hot food in a short time.
As Incremental Market Innovation you can for example create a website and Facebook page where every day you publish the menu with photos and prices. Or you can give a delivery option with a moto boy for an additional price.
Exercise
Think about the business you want to start and write in your notebook which incremental and market innovations you will implement to have a competitive advantage.
2 – Architectural Innovation
This consists in taking a business that already exists and adapting it to another medium.
Example in Education and Higher Education Businesses
An example of Architectural Technological Innovation are long distance courses and online courses that were introduced using existing curriculums that were simply transported to the digital world.
Example in Clothing and Accessories Business
An Example of Market Architectural Innovation would be someone successfully marketing a typical female product like handbags for the male market as men’s handbags.
Exercise
Analyze your business and think of ways to make Architectural Innovation with it.
Would it work?
Is it possible?
3 – Disruptive Innovation
It’s the one that makes something obsolete.
Example In Communication Business
The cell phone was a disruptive innovation that obliterated or is obliterating the landline.
Exercise
Ever had a business idea that could replace something that exists today?
If not, start thinking about one.
4 – Radical Innovation
Something completely new and nonexistent. It creates new industries, revolutionary technology.
Example Mobile Apps Business
Phone Apps business after the emergence of the iphone, and online advertising business that came about with the advent of the digital age and internet access by the majority of the population.
Stélio Inácio
This text is part of the book Escaping Poverty – 5 Steps to Start your Own Business