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3 Things Coca-Cola, AWS And Smartsheet Taught Me About Innovation

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In today’s market, companies that are not constantly evolving or changing go extinct very quickly. Back in 1950, the average age of a company on the S&P 500 was 60 years old; today, it’s 20. With so many companies failing, disappearing, or getting consolidated, transformation is critical for businesses seeking to survive, let alone compete and win.

To be successful in product innovation, start with the customer and work backwards to determine the products you need to design and build.Smartsheet

Some companies are really good at transformation and continuous innovation; disruption is built into their DNA. Others struggle with their legacies of success, becoming overly focused on self preservation, which leads to slow decision making and aversion to risk.

But it’s not impossible for large companies to reinvent their business; indeed, it’s essential for their survival. During the course of my career, I’ve been fortunate to work at three amazing companies — all very different — each of which has been integral in transforming their industry.

Through these experiences, I learned important lessons about innovation and business transformation that can be applied to almost any company. Here are three critical keys to success:

1. Start with the customer

To be successful in product innovation, start with the customer and work backwards to determine the products you need to design and build. Only by truly understanding your customers can you deliver products that they will love.

When I worked on Coca-Cola Freestyle, we knew we had to start with the consumer and figure out what they wanted, so we did a ton of research. We started with focus groups in five different cities, five groups per city, all different age groups and demographics. The insights we gathered in these sessions informed our quantitative research, in which we ultimately talked to more than 7,000 consumers.

By truly understanding consumer preferences, we were able to build the Coca-Cola Freestyle in a way that appealed to consumers, with striking results: Installing a Freestyle machine led to increased beverage sales for restaurants by 17- 20 percent, and increased Coca-Cola sales volume by 30-40 percent in those locations. What’s more, about 25 percent of consumers who knew about Freestyle told us that they chose which restaurant they went to based on whether it had a Freestyle machine!

To innovate at Smartsheet, we set out to understand what problems our customers are trying to solve and then build solutions that help them do that. Smartsheet is a cloud-based work-execution platform that makes it easy for anyone to get work done without having to wire together a bunch of other tools. Today, most of the companies chasing this market overestimate the technical bar that most business users can clear, which results in overly complex products that are not easy for most business users to adopt. At Smartsheet, we really focus on how we can meet the needs of the average business user.

Every time we build a new product, we start by writing a document called a “PR/FAQ” (Press Release/Frequently Asked Questions”), which outlines what we’re going to build — and why — before we actually go to code (an exercise I brought with me from Amazon.) This means we create the story that we want to tell customers on the day the product launches — before we actually build anything. Then, we iterate on the press release until we like what it says about the product and how it solves a problem for the customer. We validate it with existing customers. Only when we’re satisfied that what we have is the right product definition do we begin work on building the proposed product.

2. Small independent teams move faster

Once you determine what to build based on research and customer feedback, assign a small team to the project and empower them to make decisions and innovate. Keeping the team small and focused helps prevent scope creep and eliminates the management overhead required to coordinate work across a large group. It is important to establish mechanisms for the team to escalate when they need help, but try to limit the amount of energy the team has to expend reporting up. This will speed innovation.

To develop Coca-Cola Freestyle, I built a small dedicated team that was completely isolated from the rest of the organization. We reported to a board of advisors on a quarterly basis but were empowered to make decisions without having to ask for permission.This was pretty game-changing, as it allowed us to move fast, experiment and learn, and be singularly focused on capturing the opportunity we saw in the market.

Coke’s idea of isolating a small, scrappy team to work on product innovation is the Amazon model as well. In fact, Amazon has a name for it: a “two-pizza team.” Almost every new service that starts at Amazon starts with a two-pizza team — a team small enough to feed with two pizzas.

Small, scrappy teams can help you make better decisions by forcing you to make trade-offs based on the constraints faced by the team. They’re better able to innovate quickly and course correct as needed to keep the project on track.

3. Take a long view

Another key to supporting innovation is to take a long view of the business. Rather than expecting an immediate return on an innovative new idea, focus on how you’ll develop the product to best serve your target market.

At Amazon, they take a very long view of the business. When we launched a service at Amazon, no one was pushing us with the question: How fast can you get to profitability? Instead, the discussion was framed around:

●    What’s the market you’re going after?

●    How much of the market do you think you can serve with the MVP (Minimum Viable Product — the first, solid foray to market)?

●    Where do you think you’d go after that?

Rather than worry about getting a very quick return on investment, the idea is that if we build meaningful, compelling products, we’ll figure out how to make money over the long term.

At Smartsheet, we not only take a long view of our business, but also encourage our customers to do the same. For example, when customers come to us for a solution, we try to understand the problem they are trying to solve or the pain point they want our help to address. This deep understanding enables us to build solutions that are both opinionated and flexible. We bring best practices to the table, along with a real point of view on ways that our customers can change how they work, and how we can help their businesses innovate faster as they navigate a constantly changing market — now, and into the future.

Gene Farrell Gene Farrell Brand Contributor

Source: 3 Things Coca-Cola, AWS And Smartsheet Taught Me About Innovation

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Step-by-Step You Can Turn Your Ecommerce Side Hustle Into a Real Company – William Harris

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The nature of work is evolving. To make a living and build a successful career for yourself, you no longer need to work a traditional 9-to-5 job, commute to a physical office or wait patiently for someone to finally hand you that promotion you’ve worked so hard to get.

You can create your own company, sell your own products and provide valuable services to your own customers — from anywhere in the world. It’s never been a better time to start an ecommerce business. There are plenty of tools, blog posts, podcasts and other resources to help you build an ecommerce shop while you hold on to your day job.

The question is, how do you take that ecommerce side hustle and scale it into a profitable, sustainable full-time gig? It’s not easy, but it is possible. To get on the right track, consider implementing the following tips and ideas from leaders in the ecommerce space.

Find the balance

To be a successful ecommerce entrepreneur, you must walk the line between being thoughtful and executing ideas before you feel completely ready.“You often hear really smart and successful people say you need to be perfect with every action and intention — be it brand, product, packaging, website, customer service, etc.,” Guided CEO David Stober says. “I think many of those big-brained and successful people quickly forgot their actual path to success.

Building a brand and business is about finding that perfect balance of just doing it at the risk of breaking stuff (workflows, technology, product, brand voice) and perfection. Neither extreme is ideal. One means you are going too fast; the other means you are going too slow. Each business has a perfect tempo.”

Striking this balance can be difficult, especially if you’re new to entrepreneurship. To get there, leverage advice and experience from seasoned entrepreneurs and mentors who’ve been in your shoes. Read their blog posts, engage with them on Twitter, join a group on Slack or reach out to someone on Clarity.

Be data-hungry

Scaling your ecommerce business so it can pay all your bills and allow you to live comfortably also requires an obsession with numbers.

“You need to have a detailed growth and profit plan in place,” Blue Stout CEO Allen Burt says. “I always recommend that entrepreneurs outline the financial road map for their business so they know the exact levels of traffic, conversions, average order value and repeat purchases they need to hit their revenue and profit goals.”

Burt recommends you start with an audit of your current website. Ask yourself questions such as, “What is my current conversion rate? What is my average order value? What is my profit margin on each order?” From there, work backward to map out how many monthly site visitors you need to generate enough profit to sustain you and your team.

Network and keep bridges intact

“Maintain positive relationships and try to never burn bridges,” says Kyle Eisenberg, a senior manager at Image Beauty. “You never know when someone that you’ve worked with in the past will be in a position to help you in the future.”

Friends, colleagues and family members can add huge value. They can help you raise money, give you much-needed advice and connect you with the right partners, vendors and industry influencers.

Lean heavy on your biggest fans. Make sure you keep relationships intact and be proactive about updating your network’s members on your projects and progress. Sometimes, it takes just one person to take your business to the next level.

Identify your needs

A successful, scalable ecommerce shop should run like a well-oiled machine even when you’re not the one moving the levers and steering the wheel.

“Figure out the seats you need filled to grow your company without your involvement,” GrocerKey CEO Jeremy Neren says. “If your business can’t function and grow without your involvement, you will have only created a more stressful job for yourself. Total up the cost associated with filling all necessary seats and put together a plan of how far you can scale with those seats filled.”

You have to spend money to make money, and that money ultimately must come from somewhere. Be realistic about your needs upfront so you can gain a better understanding of how it actually will look to scale your business. Identify what you need to do (or whom you need to talk to) during the next few months.

“Determine investors interested in your ecommerce industry and approach them with your plan to scale your business to see if you are able to fund your growth via investment,” Neren says. “If you aren’t able to attract investors, you’ll need to determine how you can bootstrap your growth by increasing revenue with positive unit economics (meaning every time you make a sale you make money).”

Think ahead

Ecommerce is a great growth industry, but it’s also extremely saturated and competitive. To survive, you need to think ahead and prepare for the inevitable.

“There’s no such thing as a sustainable competitive advantage anymore, as every successful and profitable niche or product will inevitably attract me-toos and competitors over time,” Edgacent Cofounder Linda Bustos says. “Ensure your plan and strategy can continually stay ahead of the curve, or plan for a quick exit strategy when your business is at its peak.”

Bustos also recommends you approach with a certain degree of wariness any business that relies entirely on a third-party platform. Think eBay, Amazon or Etsy. You can’t control these platforms, and that’s a problem because they’ll own your data.

“Build your own direct or alternative channels in conjunction,” Bustos says, “as you never know when these platforms will change their rules of play, search and merchandising algorithms, pricing and commission structures or even start directly competing against you.”

The ecommerce industry has more players and competition than ever before. To successfully scale your ecommerce shop into a thriving, full-time gig, you must know the game, be willing and able to quickly pivot and be both proactive and innovative in your strategy.

 

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