Innovation for everyone
What the best companies can teach others
In 1921, my grandfather arrived in the United States, 17 years old, with just $25 in his pocket. He became a dressmaker, and, in 1937, received a patent for what he called “a new, original and ornamental design for a Dress Ensemble.”
My grandfather has been gone for many years, so I recently asked my uncle about the patent. He said Elizabeth Taylor wore the dress in a photo shoot for Seventeen. In many ways, my grandfather was an innovator. He launched his own business and thrived in the teeth of the Great Depression. But beyond our family, his impact was modest. His business closed when he retired and it never achieved scale or left a mark on our culture.
This personal story underscores just how difficult it is for even a successful business to break through. Fast Company’s reporting team sifts through thousands of enterprises each year, searching for those that tap heartstrings and purse strings and use the engine of commerce to make a difference in the world. This year marks the 10th edition of the Most Innovative Companies ranking.
Each company on the list also offers lessons that can be useful to entrepreneurs and others. Here are a few:
1. You can’t patent innovation
Amazon and its chief, Jeff Bezos, have been defying expectations for more than two decades. The question is: How? It’s not just data metrics and rigorous processes, which Amazon deeply relies on, but rather a willingness to embrace uncertainty, experimentation and messy inconsistencies. Not everything in the Amazon world is orchestrated for perfection. Bezos doesn’t just tolerate this; he enjoys it. What he understands is that each critical new idea may arise in a different way, from a different source.
2. Youth will be served
When Fast Company’s first Most Innovative Companies list came out, Snapchat didn’t exist. Neither did Airbnb or Uber, Slack or Spotify. The rise of these businesses illuminates the risks that established industries face, and how tastes in modern culture are shifting faster than ever. Younger consumers expect newer, better products all the time. And what starts out serving the youth will soon serve us all.
3. China is for real
Six of the companies on this year’s list are Chinese — more than ever before. This was a natural result of bottom-up reporting. The days of dismissing Chinese businesses as mere copycats are long gone. An innovation ecosystem has taken hold in China that is arguably more competitive than Silicon Valley. Outfits like Alibaba and Tencent are so forward-focused, even the best U.S.based businesses have to take note, and they find themselves playing catch-up.
4. The undeniables are back
Historically, only a half-dozen or so of the 50 Most Innovative Companies are repeats from the prior year. This time, 12 are returnees. That’s because these enterprises continue to set the pace for their industries, showing agility and aggressiveness that makes them undeniable. Netflix opened up its platform to the majority of the world, and followed that up by adding offline viewing, a devilishly complex legal and business maneuver. Airbnb moved into bookings and is exploring ticket sales, and BuzzFeed took the germ of an idea, Tasty, and built a huge success.
5. Watch out for that cluster
Some changes are felt before they are seen, an underground tremor that puts us just a bit off balance. That often happens when a group of small yet creative players are deftly disrupting the same area. A quintet of companies — Glossier, Kenzo, Clique Media Group, Hypebeast and RewardStyle — use content as the engine for commerce. Beyond Meat and Chobani are two examples of health-driven disruptions in the food business.
6. Little engines can blow your mind
Some tech observers critique the way investment dollars are disproportionately allocated to startups aimed at rich, coastal, urban elites — and there’s certainly some basis for that concern. But there are also plenty of groundbreaking operations in other arenas. Farmers Business Network, for instance, is pooling data and buying power for individual farmers to help them better compete with agribusiness. Simplify Networks is a Malaysian outfit applying sharing-economy ideas to mobile-phone data plans in the developing world.
7. Innovation has a soul
Not every new venture is about making money. Some are about giving it away. Pledge 1% is targeting startups with a novel message: Along with setting aside a percentage of your business’s profits for employees and investors, why not take a portion and give it to a cause? Another tactic is at the heart of GoFundMe, a crowdsourced fundraising utility that has applied the model of Kickstarter and Indiegogo to personal giving — and already generated $3 billion.
8. The mundane can be fabulous
Who cares about mattresses? As it turns out, a whole lot of people. In just a few years, Casper, which sees itself as the Nike of sleep, has built a $200-million-a-year operation on just four products.
9. Guts can lead to glory
Many of the businesses and services that we love are powered by unseen forces that are essential to their success. Netflix operates on the back of Amazon Web Services, a $13 billion business inside the e-commerce giant. Twilio provides tools to app developers, also including Netflix. IBM has unleashed its Watson technology to bring AI capabilities to industries from professional sports to health care.
10. Focus on what you can control
If there’s a single thread that runs through this year’s list, it’s the importance of focus. The one sure recipe for obscurity in today’s world is stasis. Culture will keep moving, and those enterprises that move with it will find themselves in the strongest position to weather whatever political or economic disruption comes our way.