We live in a VUCA world – volatile, uncertain, complex and ambiguous – but at the same time vibrant, unreal, crazy and astounding. Whilst change and uncertainty can lead to fear and inertia, change is also the catalyst for new opportunities and the breeding ground of innovation.
Indeed your world might still feel turbulent... and if not because of economic crisis, then because of the relentless flow of technology and expectations. Yet change offers vibrant opportunities for new beginnings – culturally and commercially, and particularly for those with entrepreneurship in their blood. Everything has been shaken up. Everybody has had to change their mindsets. And now is the time to look forward not back.
As Pablo Picasso once said “Times of turbulence are the most exciting times, because everything changes” ...and with change comes new ideas, and new opportunities.
Every part of the world is either struggling or thriving on change – from crisis-hit Athens to the beautiful wind-farms of Mexico, debt-ridden New York to digital-manic Hyderabad. However, it is the smaller companies, the entrepreneurs who are doing best.
Like any great innovator, they are seeing things differently, and thinking different things. The reality is that most large companies are unable to see or respond to the changes. Success for them was born in the old world, where western economies boomed, consumers were predictable, and digital was a cosmetic enhancement. They cling to the formulae which made them great, often oblivious to the speed and nature of change.
From Coke to Levi’s, Microsoft to GE, the old heroes are slow to rethink.
Newness occurs in the margins, not the mainstreams... with the niches, the upstarts, and survivors. The best ideas are often born out of adversity in developing markets – the trends for frugal innovation, discount shopping, and social marketing. Solutions often emerge through fusions of existing concepts, and particularly physical and digital.
The new investment capitalists now cluster in Shenzhen (Southern China), the best web designers are in Mumbai, the creative fashion houses are in Buenos Aires, green technologies are strongest in Shanghai. Digital brands become physical, physical add digital. Mobile networks embrace banking and shopping. Economic and social change are the catalysts to think differently, whilst digital and green tech are the means to innovate and grow.
• 23andMe’s DNA profiling for just $99 transforms our attitudes towards wellbeing, how we live our lives, from diet to insurance, and where we come from. The business model that makes such a price possible, is more like Google, all about selling data for research.
• Air Asia’s virtual business model enables it to be the world’s fastest growing and one of the most profitable airline, a fusion of luxury and low cost. The Virgin-backed outsourced model is a great example of focussed growth.
• Beauty’in from Brazil is a great example of thinking differently, and the fusion of different categories. The skincare is embedded in yogurt drinks and tasty candies, making morning your morning make-up routine fast and fun.
• Christian Audigier achieved high speed fashion leadership with brands like Ed Hardy through network-based licensing deals. No longer is making and distribution the heart of business. Ideas, design and partnerships are key.
• Godrej’s Chotukool is a great example of “frugal innovation”, simple and cheap ideas that can transform markets. The low-cost mini refridgerator gives 80% of India’s who cannot chill food, the opportunity to shop and store food safely and efficiently.
• Xiaomi has inspired Chinese youth, with its Android-based Apple-imitating MiPhone, that creates smartphones at razor-thin margins, but makes much great profits from its apps. Most significantly, the brand is inspired by rockstar-like CEO Lei Jun.
• Virgin Galactic seeks to innovate inter-continental travel, more than being a rich person’s alternative to Disneyland. With zero-emissions, Branson and team can take you to space, but have a more practical goal in mind too.
A new generation of market leaders is emerging in front of our eyes. Small companies, like speedboats, with the advantage of speed and agility, outthinking the big companies, supertankers who find it hard to change course. In the new world focusing on profitable niches, is much more successful than trying to achieve huge scale by developing average products for average people. The game has changed.
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