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Innovation has become like apple pie, motherhood, and the flag. You dare not criticize it. Everyone praises innovation — from presidents to university professors. Innovation is a multi-billion-dollar industry. Conferences, books, academic scholars, and all kinds of experts tell us that we need to innovate to succeed as entrepreneurs, corporations, and as a nation. The belief that entrepreneurs need to be “first-movers” has become part of entrepreneurial folk lore. Corporations hire numerous high-priced consultants to teach them innovation.

 

But is innovation really needed to succeed?  Do you need to be a first mover?

 

The reality is that only about 11 percent of “first movers” succeed in dominating their industry (Pioneer Advantage: Marketing Logic or Marketing Legend by Peter N. Golder and Gerard N. Tellis, Journal of Marketing Research, 5/93, page 153; www-bcf.usc.edu/~tellis/pioneering.pdf‎). 89 percent do not. In fact, the Stanford Business School authors who originated the term “first-mover”, and gave VCs and entrepreneurs permission to waste billions during the dot-com boom to be first movers recanted their findings.

 

Unicorn entrepreneurs did not have to read papers to know that the “experts” were wrong. Examine what these successful entrepreneurs did, and you will see that they did not emphasize innovation. They were fast improvers to win. Not everyone copies and succeeds, but if 89% do, maybe you should consider this strategy seriously.

 

Steve Jobs, one of our greatest entrepreneurs, was one of the foremost practitioners and proponents of the fast improvement strategy among our billion-dollar entrepreneurs. He was famous for having said that “we have always been shameless about stealing great ideas” (http://thenextweb.com/apple/2010/03/05/steve-jobs-shameless-stealing-great-ideas/). T. S. Eliot summarized this well when he noted that “Immature poets imitate; mature poets steal; bad poets deface what they take, and good poets make it into something better, or at least something different” (http://quoteinvestigator.com/2013/03/06/artists-steal/). Jobs was a “mature poet” and he stole quite a few ideas and technologies, and improved them with his rare genius, including:

• iPod: Others had developed mp3 players and many consumers had been illegally downloading music from Napster. Jobs’s innovation was to convince the music industry to work with him and make it legal for people to download music for 99 cents per tune.
• iPhone: Obviously, Jobs was not the first one out with a wireless phone. Nevertheless, he made it highly attractive and became the leader.
• iPad: Jobs was not the first with a tablet computer. But as with the iPhone, he made it The tablet to own if you were cool, and willing to pay more to show your cool-dom.

 

In fact, there is hardly anything Jobs did invent. He was a fast improver. And he was not an exception among elite billion-dollar entrepreneurs.

 

Gates did not innovate to develop his first operating system (MS-DOS). He bought it. He also copied Xerox and Apple with a graphic-user-interface based operating system called Windows, and he appropriated ideas from a host of others in the Office Suite of products to dominate the IT industry. He was a master of fast improvement.

 

Google was not the first to Internet search. Page and Brin improved Internet search results and dominated it. Zuckerberg, another fast improver, copied MySpace to build Facebook. Dick Schulze improved Circuit City to build the Best Buy chain (Bootstrap to Billions/ www.dileeprao.com) .

 

Many of the unicorn entrepreneurs did not innovate. They quickly imitated and improved. They did not have time or money to waste on innovation.

 

MY TAKE: Innovation can be expensive and usually quixotic for entrepreneurs without cash. Jobs was a great entrepreneur. He quickly imitated and improved. He did not innovate. His gift was to make innovations better, package them to make them cool, and sell them with a flair that was unmatched by the managers who roam our corporate corridors. In our faddish focus on innovation, we seem to have given imitators a bad name. Ironically, Xerox was one of the few corporations that truly did innovate – in copiers. If you want to imitate unicorn entrepreneurs, look for an emerging high-potential product and improve it (without violating patent laws, of course) – when the trend is at the emerging stage.