Why Your Business Should Reinvent the Wheel
We’ve all heard the old adage that there’s no need to reinvent the wheel. Yet, history has shown us time and time again that companies that strictly follow this advice often do not survive in the long-run. It’s the companies that seek to continuously reinvent the wheels of their business that survive and thrive.
In a recent blog post written by Brad D. Smith, Executive Chairman of Intuit, on optimizing for agility, one of his key recommendations is to “learn from the best wheelmakers” and innovate beyond these existing alternatives. Interestingly, disruptive companies who drive the future of their industry often simply innovate just one single small improvement upon the existing wheelmaker to produce their outsized results. And, oftentimes, these improvements aren’t innovations on the offering (i.e., the product or the service). They are reinventions to other areas of the prevailing business model. Here are 3 examples I’ve observed throughout my life where organizations reinvented areas of their business other than their primary offering:
If you’re a child of the ‘90s, like me, you can still remember the thrill of a Friday night trip to Blockbuster. Walking up and down the aisles to find just the right movie, finding a VHS or DVD behind the cardstock cover of the new movie you really wanted to watch, talking your parents into some snacks at the checkout line.
What I’m sure wasn’t as thrilling to your parents or mine, though, was driving 20 miles to Blockbuster (we lived in a rural area) only to find out they didn’t have any copies of the movie we were looking for or having to drive 20 miles back the next day to return the movie in time to avoid late fees.
Then, along came Netflix. We may know them now for their fancy algorithms and Tiger King, but back when it all started, they mailed you your movies. At first, you paid per movie but then they transitioned into a subscription model where you paid one monthly subscription fee, went online and made a list of movies you wanted to see, received a movie in the mail, and kept it as long as you wanted (you just wouldn’t get another one until you sent that one back). No trips to the store to find out they didn’t have the movie you wanted, no late fees.
Netflix didn’t invent movies. Or DVDs. Or even the idea of renting them out to people. Their offer was not innovative. What was innovative was their channel, how they got their offer into the hands of their customers, and their revenue model, how they charged people to access their offer.
RENT THE RUNWAY
Fast forward a few years as I entered high school and then college. Every year for about eight years, I had at least one event that I needed a formal gown for – freshmen/sophomore dances, junior/senior dances, prom, sorority and fraternity formals.
If you went to a boutique to buy a gown, you spent a fortune. But if you went to a department store where the prices were lower, you risked having the same dress as someone else (gasp! – kidding. First world problems.) And either way, you were stuck with a dress that you would most likely never wear again because, let’s face it, you were already photographed in it.
Now, with Rent the Runway, you can get a designer gown that is worth thousands of dollars for a couple hundred dollars. To address any concerns you might have of your dress arriving in the mail the day before your event and not fitting, they send you two sizes of the same dress. Still doesn’t work? They’ll overnight you a backup.
After you have your Cinderella moment, you can send it back in the mail on Monday morning. The next weekend, instead of it starting to collect dust in your closet, its being worn by another woman in another city, which is much more sustainable than one-time wear! Since its inception, Rent the Runway has expanded to also offer monthly memberships that can get you up to 16 items per month and includes more everyday options like jeans, activewear, and accessories.
Again, the Harvard Business students behind Rent the Runway didn’t invent formal gowns. They just innovated a way to combine e-commerce, a sharing economy model, and a business to consumer (B2C) model instead of the traditional retail route to the biggest pain points of buying a dress.
The first time I ever rode in a taxi I was in a college (again, I grew up in a rural area). I don’t have a single positive experience I could share with you about riding in a taxi. You either had to wait too long to get one, you couldn’t get one, the credit card machine was “broken,” they smelled funny, you were pretty sure the driver was taking a longer way so he could charge you more, or all of the above. One particular ride where my driver told me about why each of his four marriages ended does stand out to me, but not in a good way.
As Uber started making its away across cities, all of these problems were solved, except for your random chatty driver. By requesting a ride through their app, you know exactly how long it will take for your driver to arrive, you can watch them drive to you, you know how much it will cost, you can pay in the app, and you can read reviews about your driver and their vehicle.
Giving people rides wasn’t new. A quick Google search tells me that the first taxi service started in 1891. Uber’s innovative flair falls within their channels, revenue model, and partnerships.
Uber’s app addresses the pain points of “hailing a cab,” paying for your ride, and getting stuck with a sketchy driver or vehicle. Allowing users to provide reviews of drivers and their experience within the app creates accountability for the drivers and sometimes results in them going out of their way to wow you with a bottle of water or letting you pick your favorite music for your ride.
Beyond the channel for accessing and paying for their offer, Uber innovated their revenue model. Instead of paying a base fare and watching the meter spin out of control as you drive and wait at red lights, you know exactly how much you’ll be paying before you even get in the car.
Additionally, Uber’s surge pricing model uniquely deals with the supply and demand issue that results in having to wait too long for a ride. As demand for rides increases during rush hour, special events, etc., the price for rides goes up. On the demand side, riders have the choice of either paying more or waiting longer. On the supply side, the higher prices encourage more drivers to be available during those times which drives the demand down.
Lastly, Uber introduced an innovative partnership. Instead of partnering with a traditional taxi service who would need to buy a fleet of vehicles and hire employees, they democratized becoming a driver. If
you have a vehicle, enough experience, and pass their screening, you can become an Uber driver. This model allows people flexibility to be a driver full-time or to do it on the side to pick up some extra cash, and was one of the initial drivers (pun intended) of the gig economy.
THE LIST GOES ON & ON…
Peloton didn’t invent the exercise bike. They innovated partnerships with high-quality, engaging instructors and built a community amongst their riders.
eBay didn’t invent reselling. They innovated an online marketplace where they made revenue from people reselling.
Chewy didn’t invent pet food or toys. They innovated a compassionate customer relationship model where they not only give you a full return for your order if your pet passes away, but they also ask you to keep it, donate it to a local shelter, and send you flowers and a note for your loss.
If you want to start a business or if you have already have a business, remember this: You don’t necessarily have to create the next widget, discover the next scientific breakthrough, or develop the next technological advancement. Start by looking at the existing wheelmakers, or the people who have already attempted to solve a similar problem, and find the pain points.
Then ask yourself: Can any of the pain points can be addressed by innovating the channel, revenue model, or partnerships?
If so, think through how you might innovate a new way forward. Some good questions to get you started are:
- Is there something that is currently done manually that could be moved online? Is there something that is already online that could be automated?
- Is there something that people are currently paying for by the unit that could be transitioned into a monthly subscription or vice versa? Is there a convenience or customization that people would be willing to pay extra for?
- Who could you partner with? Who has the resources you need to deliver your offer but may not be using them 100% of the time (think cars with Uber, rooms/houses with Airbnb, etc.)? Who could help you make your offer more appealing?
Finally, to innovate breakthrough business ideas, it’s often helpful to look to other industries for inspiration. What is something they are doing in healthcare with their customer relationships that could be applied to your fashion business? What is something they are doing in restaurants to reduce their costs that could be applied to your construction company?
For your business to survive and thrive in the modern marketplace, always look to reinvent the wheel.
For more blogs and content like this, subscribe to Iterations.
Tricia Ball is the former Associate Director of the iCenter. She is the acting CEO and President of the Huntington Regional Chamber of Commerce. Tricia is certified as an Innovation Catalyst by Intuit, in Business Innovation by IDEOU, in Continuous Innovation by LEANSTACK, and as a Business Advisor by GrowthWheel.