1. Modify existing ideas / models
The first thing to remember is that you don’t have to do something completely new and unique to be successful and build an innovative business. In fact, you’ll probably run into more boundaries by trying to be 100% original because you’ll have to start from square one and innovate every step of the way.
If you take an existing product, service or business model, you don’t have to worry about creating the next big thing, you can just take what exists and modify it to better suit your customer’s needs. This way, you have the added benefit of referencing prior successes and failures in your industry (and even for your specific product).
Apple is the most successful company that uses this approach. None of the major Apple products (MP3 player, tablets, laptops) were the first of their kind. In fact, many of them had been around for years before Apple released a product with their unique spin on it. All Apple did was take a product with potential and reshape it into something new, fresh and widely used. Facebook did the same thing — it wasn’t the first social network, but it was the one that stuck around the longest and had the most impact.
2. Dominate a small niche
This is a tactic that’s becoming more common every day. Because of globalization and the internet, you have access to a wider user/customer base than you would have had 50+ years ago. Because of this, you can easily offer a product or service that caters to a very small group of people.
When you’re operating on a small, local scale, it would make no sense to create a super-niche business because there just isn’t the demand at that scale. However, when you branch out and over a niche product to small user-bases all over the world, this suddenly becomes a successful business model.
Tap into a niche with little to no competition and become the driving force in that field.
3. Flip it
As mentioned earlier, more people are attempting to start low-overhead businesses and use them as vehicles for passive income. A lot of these will undoubtedly fail. Keep an eye out for businesses/websites that have laid their foundations but aren’t seeing profit. If you think you can revitalize the company and create something profitable out of it, offer to buy it for a small multiplier on revenue (which won’t be much if it’s failing).
Zappos is an example of a company that had a major turn around. They were a failing company until Tony Hsieh stepped in and restructured it.
You should be careful about this, of course. Make sure you have a clear strategy for how to turn things around. You don’t want to dig yourself into a hole you can’t climb out of.
Every day I’m reading about a new tech startup that’s trying to compete with major industry giants. The simple fact is that, because of the heavy competition, most of these will fail. Unless you have the resources to play in the major leagues, this shouldn’t be your focus.
Instead, think about the impact you can have offline. While the tech scene is generating thousands of new companies every week, you can be doing some major damage outside of tech.
With all the buzz of “getting rich online” more and more people are abandoning traditional career paths and trying to break into internet business. While those people are busy competing, you can be dominating a field on the outside.
5. Build a solid team
Your company is only as good as the sum of its parts. The more creative, innovative people you have on your team, the better results you’ll produce. Don’t settle for mediocre venture partners. You want the best of the best. Look for hardworking people with a creative edge.
Thomas Edison firmly believed that his own skill set was irrelevant: the ability of his team was all that mattered.
6. Be different
Don’t be afraid to do something totally crazy. It’s easy for us to want to stay cautious and only act on the ideas that have the most probability for succeeding. If you want to be innovative and ground breaking, you’ll have to do some thinking outside of the box and take some risks.
Make sure whatever you’re pushing forward is something you truly believe in. Don’t just experiment for the sake of it. Always back what you’re doing 100%.
7. Go behind the scenes
There’s a saying that goes “the greatest thief is the one you don’t know about”. The same goes for business. Some of the most successful people I know are not household names. In fact, the businesses they run are probably completely unknown to the average person. That’s because they operate outside of the limelight and behind the scenes.
For example, one successful company I know of offers tech consulting for government institutions. The service they offer isn’t relevant to the average internet user like social media sites or blogs are, for instance. However, the service IS something that’s in high demand.
Don’t trick yourself into thinking the only path to success is through the common channels we see every day.
8. Join forces
One of the best ways to gain leverage as a small company is to acquire powerful allies. The easiest way to do this is to create something that interfaces with a bigger company or service.
The most obvious example of this in recent history is Instagram. The service it offered was valuable because it interfaced with smart phones and social networking sites. The actual product was lightweight. Its power came from the high level of connectivity it provided.
Stop worrying about perfection. The only way to create a useful, reliable product is to experiment, release what you have, get feedback and modify it accordingly. Don’t be afraid to iterate and fail.
Just look at screenshots of early versions of WordPress and Facebook. They used to be extremely basic and ugly. Both have gotten to their current iteration because they received feedback and implemented the requested features.
Keep It Simple, Stupid.
A product, business or service should be as simple as possible. Why was Apple able to dominate the MP3 player market when they were going against so many competitors? Their product was simpler and more effective.
Don’t overcomplicate things.