Innovation – a bit like baking a cake
Entrepreneurs today face a rapidly changing business environment brought about largely by the speed of technological change. The combination of rapid change and the resulting uncertainty about what the future holds presents fertile ground for new opportunities. It is estimated that, five years from now, 80% of all products will be brand new or radically redesigned – good news for those entrepreneurs with a proactive, opportunityfocused and innovative mind-set, bad news for those who don’t like change.
To understand what is meant by innovation, it is useful to draw an analogy with making money by baking cakes:
you must have the intent and motivation to get involved in the general business of cake baking.
you must be able to think of a new type of cake that you can bake – something that will be tasty and attractive and surprise and delight prospective customers.
you have come up with a recipe for a new cake, you must try to find out if you can turn this into a money-making business opportunity.
out if the idea for the cake will stand out if compared with other cakes; not infringe on the recipes of other cake makers; allow you to perhaps obtain protection for your own recipe; appeal to prospective cake eaters; have marketing and channel access to cake eaters; be able to be baked given available facilities and technology; comply with regulations; and allow for experimentation to eventually come up with an amazing final cake.
what you will be offering customers, how your cake will benefit them, how it will be different and superior to competitive cakes and how much it will cost.
up a business that will enable you to create and reproduce the cake, market the cake and make money from doing so.
cost of the ingredients, baking the cake, marketing and selling your cake must be added together. Deduct this cost from the income you generate from selling the cake. If the income generated minus the cost is positive, then you have a profitable cake business.
your cake business to become an innovation, more and more people must prefer your cake to any other and continue buying it. If this continues, you have turned your cake-baking idea into a successful and profitable innovation. Van Straaten started Verimark and, after selling it, started Inventec.
He is a regular guest at Gibs