Entrepreneur. Innovator. Inventor. These are labels that are often applied to startups and small businesses. Each label is important, but these words aren't synonyms for each other. There's a lot of overlap, to be sure, but not all entrepreneurs are innovators, and you can rest assured that many innovators aren't entrepreneurs.

Subtle Differences

Entrepreneurs are people who start new businesses. Some of these businesses begin with a radical new idea--a new product or service. Some spring up because the existing industry needs a rethink or a fresh start--a new channel or customer experience. Many of the entrepreneurs in these categories are often innovators. That is, they start a business creating something new and valuable, even if the industry or market already exists.

However, this doesn't reduce the value of entrepreneurs who open a coffee shop or dry cleaning business that is based on existing techniques, methods and processes. These entrepreneurs are risk takers, starting a new business, but not necessarily leveraging completely new ideas or introducing new methods or capabilities.

On the other hand, there are plenty of innovators and inventors who dream up or create new ideas, technologies and products but never manage to commercialize them or build a business around those great ideas. Real innovation happens when you combine a great idea and a way to realize that idea as a product or service or business model.

Accelerating Risk

There is one important idea to note here, however. In any new startup, any entrepreneurial business, there is risk. Customers may not know about your company or product. There may be strong competitors in your market. Channels to good customers may not exist. Every entrepreneur or startup faces significant headwinds. Entrepreneurs who rely on trusted brands (franchises) or who leverage existing techniques (dry cleaners) reduce this risk by producing familiar products or services. Entrepreneurs who are innovators layer on additional risk--they enter as new, unknown companies unrecognized to customers or consumers AND provide a relatively new or unusual product or service. This new technology or product may not have "crossed the chasm" and may target a very small population of people.

Why "Crossing the Chasm" Matters

Geoffrey Moore and others noted that many new technologies and products are quickly adopted by technically savvy early adopters but struggle to achieve greater market penetration until the products and services become acceptable to the "early majority." The early majority seeks "whole products," not simply new technologies, so to succeed as an innovative entrepreneur you must conceive your innovation not for the savvy early adopter, but for the more cautious early majority. The "chasm" is the market gap between early adopters (a small percentage of the market) and the early majority (a much larger segment of the market).

Accelerating to the Early Majority

For innovative entrepreneurs, this means that you've got to overcome two issues quickly. First, you've got to establish trust in your company or brand as quickly as possible, since you operate in an existing market where other competitors are known. Second, you've got to understand, and build for, the early majority, so your products are understood and can be acquired by a large segment of the buying public. Selling exclusively to early adopters won't scale your business. Creating the best technology but neglecting to build awareness about your company and trust in your brand can equally lead to disaster.

Innovative entrepreneurs are a special breed - combining the thrill and risk of introducing a new idea while simultaneously building a new business and brand in the face of stiff competition. This is why the rewards are often so large, and why the failure rate can also be high. Successful innovators and entrepreneurs plan for and design for the early majority.

Published on: May 25, 2017