Innovation Begets Innovation

Posted December 19, 2010 in Innovation

innovationInnovation starts with an idea. That idea can come from something that is a current problem, as this article shows:

by Jeff Carter

How do you start a new company? Of course, it starts with an idea. But, where do good ideas come from? Pain points. In your daily life think about how you do things. Can you develop something to make it better, quicker, easier? Entrepreneurs are not born, they are made. Successfully creating something new invariably begins a domino effect that creates even more. Henry Ford created the auto but think about all those secondary inventions and entrepreneurs that built great companies from his main idea.
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Groupon is the fastest growing internet company today. Nice article on them in the Wall Street Journal. They couldn’t exist today without Bill Gates and Steve Jobs who made it possible to commercialize the internet. Groupon probably couldn’t exist without Facebook, that brought the social network concept into the mainstream.

With Groupon’s success, “me too” companies out there like Living Social have started up. The Groupon market is so big there is room for more competitors. The barriers to entry are low. As long as you target the correct market and get a critical mass, you’ll be successful. Groupon is engaged in a land grab right now to try and tie up as many market segments as they can.

However, good ideas always lead to new ideas that piggyback or redefine the original.

I found a pretty cool website that expands on the Groupon idea. Dealigee.com allows you to take your unsold Groupons and resell them. Suppose you buy a Groupon and can’t use it. Instead of losing the money, or giving the coupon to a friend, you can list it for sale on the Dealigee website. Living Social and all the other Groupon-like companies coupons are welcome too. It’s a virtual bazaar of coupons.

After perusing the website, it looks like you get an even better deal on the resold coupons than you would have in the first place. Dealigee is only in three cities so far (Chicago, New York, San Francisco). But, once they get traction it should be easy to expand. Head over there and you might find some good last minute Christmas shopping items!

On another note, too often lip service is paid to entrepreneurs. These days, we hear how we have to stimulate new entrepreneurs to create jobs. It’s somewhere in almost every speech that every politician gives. Most of the time, politicians speak out of both sides of their mouths-praising the small business guy while passing policies that kill them. The best policies for entrepreneurs are ones that keep their fixed costs low. That means low taxes, low regulation, no subsidies.

In the past number of years, America hasn’t had the spirit of the entrepreneur in legislation that has passed. Policies have been big programs. These hinder, and hamstring the business builder. As businesses grow, they become burdened with unnecessary paperwork. Regulations limit them. It’s easy to point fingers at one person or political party, but in reality they all can share in the blame. There are career politicians on both sides of the aisle. Hopefully the last election, and a continuation of the Tea Party movement will ahem, “encourage”, politicians to begin dismantling the huge government apparatus that frustrates and torpedoes innovative thinkers and companies.

With 9%+ unemployment, people should start taking a shot at building a new company. It doesn’t have to be the next billion dollar Groupon. Find a pain point in your life. Think about it. Talk to other people and see if they are thinking the same thing. Observe. Then build a business. You might not be the next industrial titan. But you might do well enough to have a decent lifestyle.

http://pointsandfigures.com/2010/12/18/innovation-begets-innovation/

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