LESSONS OF INNOVATION FOR 2017
On September 4, 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.” While my grandfather has been gone for many years, I recently asked my uncle about the patent. He claimed that the actress Elizabeth Taylor once wore the dress it describes 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. It never achieved scale or left a mark on our culture.
This personal story underscores just how difficult it is—and how rare—for even a successful business to break through. Which is part of what makes putting together our annual 50 Most Innovative Companies list such a challenge. Our reporting team sifts through thousands of enterprises each year, searching for those that tap both heartstrings and purse strings and use the engine of commerce to make a difference in the world. Impact is among our key criteria.
This year marks the 10th edition of our Most Innovative Companies ranking. Looking back on that history, there are plenty of eye-opening lessons (see my article “Ten Innovation Lessons of the Past 10 Years” on fastcompany.com). This year’s list offers a brand-new slate of forward-looking ideas, from Amazon to Snap, Open Whisper Systems to Orbital Insight. My grandfather would be amazed by the radical, fast-paced changes of these companies. Here are 10 observations about the current state of the innovation economy.
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? Executive editor Noah Robischon sat down with Bezos, and what he learned (page 26) points not to data metrics and rigorous processes— which Amazon deeply relies on—but rather to 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 BESERVED.
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. That reality can’t be ignored. And what starts out serving the youth will soon serve us all. As senior writer Mark Wilson notes in his terrific assessment of Snap (page 34), “The only people who underestimate Snap are those who don’t take the time to see what’s right in front of their face.”
3. CHINA IS FOR REAL.
Six of the companies on this year’s list are Chinese—more than we’ve ever had before. This was not a strategic objective of ours but a natural result of our bottom-up reporting. The days of dismissing Chinese businesses as mere copycats are long gone. As senior writer Austin Carr reports (page 46), 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—with increasing frequency—they find themselves playing catch-up. As one source tells Carr regarding the apps Alipay and Wechat, “There is no comparison with anything in the U.S. Maybe Facebook eventually gets there—maybe.”
4.THE ‘‘ UNDENIABLES ’’ ARE BACK.
Historically, only a half dozen or so of our 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 (page 42) 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. Uber (page 33) pulled a Uturn in its China business, only to double down on self-driving cars. Airbnb (page 50) moved into bookings and is exploring ticket sales, and Buzzfeed (page 50) took the germ of an idea, Tasty, and built a huge success. Google (page 32) is disrupting photo storage,
and Apple (page 33) is delving deeper into chip making. Whatever distractions other businesses may face, these leaders seem impervious. They are setting their own course, and everyone else is being forced to follow.
5.WATCHOUTFOR 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. Beginning on page 56, we highlight a quintet of companies—glossier, Kenzo, Clique Media Group, Hypebeast, and Rewardstyle—that use content as the engine for commerce. Elsewhere, we highlight Beyond Meat (page 89) and Chobani (page 44), two examples of health-driven disruptions in the food business. One Medical (page 74), Medtronic (page 82), Celmatix (page 88), and Headspace (page 85) point to a wave of coming techcentered changes in the medical field, regardless of what policy makers do in D.C.
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 (page 74), for instance, is pooling data and buying power for individual farmers to help them better compete with agribusiness. Simplify Networks (page 89) is a Malaysian outfit applying sharing-economy ideas to mobile-phone data plans in the developing world: Why shouldn’t people be able to sell bandwidth, that they’ve paid for but haven’t used, to others? And then there’s Orbital (page 72), which analyzes satellite imagery to “understand what we’re doing on the earth and to the earth,” as founder James Crawford puts it. While Orbital’s revenue largely derives from financial firms, it’s partnered with the World Resources Institute to help with detecting and stopping deforestation.
7. INNOVATION HAS A SOUL.
Not every new venture is about making money. Some are about giving it away. Pledge 1% (page 84) 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 (page 66), a crowdsourced fundraising utility that has applied the model of Kickstarter and Indiegogo to personal giving—and already generated $3 billion.
8.WHAT’S MUNDANE CAN BE FABULOUS.
Who cares about mattresses? As it turns out, a whole lot of people. In just a few years, Casper (page 76), which sees itself as the Nike of sleep, has built a $200-million-ayear operation on just four products. Thinx (page 80) is addressing a different need: menstrual leakage. CEO Miki Agrawal is attacking an unappreciated arena in our male-centric marketplace—and making millions.
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, for instance, operates on the back of Amazon Web Services, a $13 billion business inside the e-commerce giant. Twilio (page 44) provides tools to app developers—also including Netflix. IBM (page 54) has unleashed its Watson technology to bring AI capabilities to industries from professional sports to health care. Mailchimp (page 89) helps myriad small businesses operate with more sophistication and efficiency. And then there’s Open Whisper (page 51), whose security protocol not only underpins its own app but is helping Facebook provide its users with safer, more secure communications.
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. Over the past year, the nation’s political dialogue offered many reasons for uncertainty and pause. And yet the one sure recipe for obscurity in today’s world is stasis. Culture will keep moving, and those enterprises that move with it—that attack their missions with fearlessness— will find themselves in the strongest position to weather whatever political or economic disruption comes our way.