How to become a disruptive innovator
Market newcomers are some of the biggest sources of disruptive innovation. Here RSM’s Prof. Justin Jansen, named among the top 100 most influential thinkers worldwide this year by TIME magazine, shares his thoughts on how start-ups can set the stage for breakthrough innovation.
Story by Rebecca Morris
Before Marleen Vogelaar co-founded 3D printing company Shapeways in 2007, she was told the prospect was impossible: the technology was simply not available. Seven years later, the company is the leading 3D printing marketplace worldwide and considered one of the most disruptive innovators to come out of the Netherlands. ‘Why did I believe in the potential of 3D printing as a business prospect?’ says Vogelaar, a keynote speaker at a recent conference hosted on disruptive innovation by the Erasmus Centre for Entrepreneurship (ECE). ‘Because I really, firmly believed that there was emotional value for people in being part of the design process. This emotional power of the product was why we moved so fast.’
The concept of “disruptive innovation”, one of the most pervasive buzzwords of 2014, should be especially interesting for entrepreneurs. Many major innovations are emanating from the newcomers in the market, says Professor Justin Jansen, scientific director – along with Professor Roy Thurik – of the ECE. But nurturing them into existence is still a precarious process.
Professor Jansen was ranked among the top 100 most influential thinkers worldwide by TIME magazine this year, and a keynote speaker at the conference hosted in autumn by the ECE – currently leading in Europe for its research into entrepreneurship.
‘Companies that produce these sorts of innovations usually share certain key characteristics,’ he says – among them: early engagement with customers, getting people on board with experience and networks, making the right hiring decisions, and the drive to push past the naysayers.
Listen to your customers
One of the most important things you can do as a small company is involve your potential customers early on in the process, says Prof. Jansen. While it is impossible to accurately predict whether a product will disrupt the market, feedback from potential customers will increase your odds. He says: ‘The key is to apply this feedback to improve your product again and again.’ Vogelaar, co-founder of Shapeways, agrees: ‘Your customers really want to be heard. That input will make you innovate so much faster.’
Connect with investors
Big companies can make it very difficult for newcomers to break into an industry. ‘They operate in ecosystems with their suppliers and customers,’ says Jansen. ‘Their reputation gives them a legitimacy with new products that newcomers just don’t have.’ Start-ups can create legitimacy by getting experienced outsiders involved, such as venture capitalists and angel investors who have the experience and networks to make the product a success. ‘They have played the game before and it’s this kind of energy and funding you need.’
Hire the right people
The key message here is to create diversity within your company. A balance between different areas of expertise and fundamental motivations yields several benefits, including control of your finances. ‘You grow so fast – you need investors or managers with long-term ambition who can keep control of costs,’ says Prof. Jansen. At the same time, you need entrepreneurs who can drive innovation and entrepreneurial behaviour. Diversity of gender helps, too. Simone Brummelhuis, founder of IENS, the Next Women, and keynote speaker at the conference, says: ‘Research shows that more innovation occurs when women are involved.’
Think business models
Business models themselves can also be the breakthrough innovation. ‘If you can build a new business model that will create value for your customers in a novel way, the chance of you having a big impact will be higher,’ he says. ‘Business models are much more difficult for competitors to copy – and one of the big advantages for a start-up.’ Well-known examples include those in the airline business. Established incumbents are still struggling to provide the right response to the low-cost service business models of Ryanair and easyJet.
Don’t listen to naysayers
With breakthrough innovations, you to need to really believe in your idea, says Prof. Jansen. World-renowned virologist and influenza expert from Erasmus MC, Ab Osterhaus, told entrepreneurs at the conference how, when he set up his company 30 years ago, ‘everyone told me that infectious diseases were finished with, there was no more money to be made. Then along came the AIDs pandemic.’ Since then his laboratory has risen to the head of its field, one of the 12 laboratories worldwide that combined forces to stop SARS in 2012 – the first pandemic to be stopped in human history.
And once you’re up and running, don’t stop innovating. ‘The impact of entrepreneurship within companies has doubled in recent years,’ Prof. Jansen says, quoting findings from his recent research. ‘Entrepreneurial behaviour within companies has become the big differentiator between the winners and the losers.’ This is, in part, because it leads to higher productivity. ‘Most companies think of it as costly,’ he says. ‘But investing in innovation helps to improve productivity throughout the organisation, even in the short term.’
Justin Jansen is professor of corporate entrepreneurship and joint scientific director of the Erasmus Centre for Entrepreneurship Research (ECE).
More information about the Erasmus Centre for Entrepreneurship Research can be found at the ECE website.
This article first appeared in the Winter 2014 issue of RSM Outlook.