This essay was originally written for a lecture given to first year business students at IPER University, Bhopal on 13th November, 2024. Link to the recording of the lecture is given at the end of the essay.
Contents
- Innovation Adoption Curve
- What happens when you choose something that’s at the center of the curve
- How to choose the right product or service
- Incremental Innovation
- Disruptive Innovation
- Cultural Innovation
- How monopolies are built?
- Now you have the mental model, how do you find new ideas?
- Travel solo
- Talk to people
- Copy & Paste
- Personal Branding
- Read books
- How to position your brand?
- How to differentiate your brand?
- How to reposition your brand when you have competition?
- Go-to market strategy – minimum viable audience
- 1000 true fans
- Target market
- Creating barriers for competetion
- Recommendations and sources
Innovation Adoption Curve
Innovation adoption curve shows us how ideas and products enter into a market and are eventually adopted by the masses. You will notice that at the fringes you have the innovators who are consistently producing new products, some of these products remain at the fringes while a very few are adopted by the early adopters and then by the mass market. At the last you have laggards, they are often the last ones who buy that product, for example your grand mother buying a smart phone.
This will help you understand how to choose the right target market for your product. You have to ask yourself, who is it for? Your product or service has to be so good for the early adopters that they talk about it and push the product to the masses.
So, you have to
– choose a product that is at the fringes of the innovation adoption curve.
– but choose something that has the potential to break into the mass market.
– some products are destined to remain in the niches (like mulberry/shehtoot) while others can move to mass market (avocado), this is done by market forces.
For example, if you decide to sell a cricket bat, it will be tough to create a business out of it, but pickle ball on the other hand is a new sport in India. You can sell pickle ball paddle and can create a brand name before the big players jump in. Eventually the market for pickle ball paddle will get saturated but if you move early and create a brand on the internet fast, people will buy from you and you would have established yourself. That will allow you to make investments in marketing and branding once you have competitors. And believe me you will have competitors.
I knew in 2017 that the avocado trend would eventually come to India, and if I get into farming avocados and create content around it, then by the time the trend is here, I would have a brand that comes up first on the google search.
What happens when you choose something that’s at the center of the curve?
If you choose something that’s at the center of the curve and is already adopted by the masses, then you have to compete with bigger players who have access to a lot of capital and a network of distributors which you as a new entrant, don’t.
Usually at the center, the industry is consolidated (oligopoly). There are already a few players, who have the majority of market share and all the smaller players are competing in a perfect market, you will have to take average profits or sometimes losses, which is again governed by the market. For example, trading apples or button mushrooms.
If you have access to a lot of disposable capital, you can perhaps compete with the bigger players, but that also requires cultural innovation. I will touch on this again a bit later. Usually if you cater to this market, then you have to play on relations, and not on branding, you can make a living out of it but you will never be able to create a long lasting monopoly.
How to choose the right product or service?
When you are bringing something new to the market, you are doing either of the three things,
1. Incremental innovation,
2. Disruptive innovation
3. Same product but an ideological innovation
Incremental Innovation
Adding new features to an existing product is incremental innovation. It might work for a while, but it can be easily copied by the existing players. You will lose that edge over time. For example, the when the IPad came out, it was new for a while but then all the other companies came out with their versions of it.
Disruptive innovation
This the kind of an innovation that Uber or Airbnb did, they built different business models that have killed a pre existing industry or changed the way an industry works, this is very hard to do and generally requires you to have access to venture capital and some kind of new technology.
Cultural innovation
This is the kind of an innovation where you are essentially selling the same product, but the ideology behind it, propels the product from the fringes to the mainstream. For example, Liquid Death. It sells water in beer cans, because beer cans are recyclable. But the name and marketing is so different from legacy brands of bottled water that you would think twice before purchasing it. It is valued at 1.4 billion $. What they did different was the branding and marketing coupled with the ideology of sustainable consumption.
How monopolies are built?
To build a long lasting brand you have to apply all these innovation tactics within a coherent strategy. The plan should be to have an ideology that your brand champions, that ideology can be so new and so fresh, that the mass market adopts its and it can create a disruption in the industry, but doing that once is not enough, then all your marketing, advertising and incremental improvements in the product are governed by that ideology.
Now you have the mental model, how do you find new ideas?
Travel solo
Spend some time alone. It gives you time to think and you become open to new ideas and meeting new people. This can be a bit challenging for women. So travel with precautions.
Talk to people
Learn the art of conversation and persuasion. With the internet we are more connected yet lonely. People are craving for meaningful connections. Go talk to them.
Copy and Paste
A small hack in choosing the right product, and it doesn’t have to be fancy, just choose something that is already being consumed by the masses in some other geography and bring it somewhere new. I chose avocados because it was already popular in the west and luckily its going good so far.
Personal Branding
Once you have the product or service you want to sell. Start with personal branding. When I decided I would pursue avocado farming, I made it my online identity. As I kept posting content online, new opportunities started coming my way. It will not happen overnight, but consistent effort executed strategically will be rewarded. When you are starting out, you are strapped for cash, but you have one thing on your side, internet. Have faith and execute.
Read Books
I am adding a few in the recommendations at the end of this post. Success is not guaranteed and the strategies might not be applicable everywhere, but this essay and the book recommendations will give u a mental model, to understand which businesses have potential and which don’t.
How to position your brand?
You would need to do some market analysis to understand what your competition is and how and where your product is placed in the eyes of the consumer. Draw some positioning maps like I did in the picture above. In the fruit business, avocado is the only product category that is new and healthy.
How to differentiate your brand?
Odds are that you will not be the only player in the marketplace who can identify a market gap. Competition will jump in and they will try to copy your ideas and innovation. For example, when I entered the market no company was doing marketing and sourcing like I did. Competition saw what I was doing and copied my business model.
How to re-position your brand when you have competition?
Circumstances and market forces will require you to reinvent your business strategy and reposition your business. I am in process to make my business more sustainable. That will again differentiate my business from the competition at least for sometime.
Go to Market strategy – Minimum Viable Audience
Coming back to the the innovation adoption curve. You have to create a product for a small group of people. Delight them with your product and make it so good that they talk about it. In marketing we call this the idea of 1000 true fans. Imagine a group of 1000 people and cater only to them and not to others. In fact, your product should hated by the laggards.
You have to know how your target market behaves. These will be your first 1000 customers, who will further spread the word. I have painted a picture of the target market for Indo Israel Avocado. Not all your customers will be the same but you will be able to see similar patterns of behavior.
Creating barriers for competition
Once you start your business, you would have to constantly create barriers for others to strengthen your position and increase market share. This can be done through marketing, advertising and strategic partnerships.
Recommendations and sources
- Art of Innovation
- How brands become Icons
- How to win friends and influence People
- 1000 true fans
- This is Marketing
PPT of the presentation –
-Kind regards,
Harshit Godha