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INNOVATE

3 Ways You Need to Give Up Control
 

C'mon, control freaks: Your start-up needs fresh and innovative ideas. To get them, you're going to need to let go of the reins a bit.

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You could say, no matter what industry you're in, an entrepreneur's primary business is innovation. Success depends on your ability to create that better mousetrap that will attract customers.

But here's the tricky thing about innovation: It's easy to fall into the trap of feeling like you need to institutionalize it in your company. The temptation is to closely control the process so you can get more efficient and come up with big breakthroughs more consistently. And herein lies the problem.

You start acting like a prototypical big company, as Maxwell Wessel, a researcher at the Harvard Business School's Forum for Growth and Innovation, puts it. Big companies tend to build structures and processes to deliver solutions to customers' problems and desires. That means pushing for predictability. But the essence of an innovative start-up should be learning to ride the unpredictable. Mistakes are vital to innovation.

Here are three areas where entrepreneurs can stumble and lose their innovative edge.

1. Too rigid with the business model

When you start a business, you have an idea of what the business model should be... but what if you picked the wrong one?

That happened early on to cloud storage start-up Box. CEO Aaron Levie told me some time ago that his initial business model was straightforward: Every user would pay for the service. Growth was strong, but Levie and his management team eventually realized they would see much faster expansion by offering a free basic version of the product, using what would eventually be known as a freemium model. When many users in the same organization or workplace used Box, they would realize they wanted collaboration functions and better security, while the CIO wanted more control. That led to the company's enterprise model. But it might not have happened had the Box team tried to force their initial concept on the market.

2. Resistent to embracing new directions

Sometimes, you may not even know what product is best for the market. Before it was acquired by Yahoo, photo-sharing site Flickr wanted to be an online game like World of Warcraft. But the founders realized that there were plenty of comparable--and even better--online games. Besides, users liked the photo-sharing feature even more than the game. By being open to listening to customers, they were able to change direction and create a hit and sell it to Yahoo for a reported $35 million. Craigslist is another example. Craig Newmark built his first website because letting friends know about events around San Francisco via email became unwieldy.

3. Quick to dismiss the rejects

Just as important as being flexible with where to take your product is not rejecting new developments for the wrong reasons. The list of major products that were developed by accident, including Play-Doh (an attempt at a wallpaper cleaner) and Post-It Notes (based on a partially-sticky adhesive accidently developed at 3M), is impressive. Corning's scratch-resistant Gorilla Glass, found on millions of smartphones and tablets, was originally developed in 1960 and mothballed.

The more control you try to introduce into innovation, the more likely you may miss opportunities. After all, innovation is the happy combination of ideas and factors that weren't predictable in the first place. If you really knew ahead of time what people want and what works, building a huge business would be easy.

IMAGE: expresbro/Flickr
Last updated: Apr 3, 2013

ERIK SHERMAN's work has appeared in such publications as The Wall Street Journal, The New York Times Magazine, and Fortune. He also blogs for CBS MoneyWatch.
@ErikSherman




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