The innovation toolkit

Entrepreneur, May, 2003 by Joshua Kurlantzick

Even in a tough economy, there's one thing you can count on to keep your business afloat: innovation. we asked these entrepreneurs and experts to reveal the secrets of their success--and how you can use their experiences to your advantage.

In a difficult economy, when small businesses have trouble finding capital, health insurance and nearly everything else, there is one element of business success that can still be had on the cheap: innovation. According to most economists, innovation remains probably the most important component of small-business success. Despite the downturn, smart companies are pouring more into research and development, and small businesses that continue to innovate, even in highly competitive fields, don't only survive, but thrive.

Here, then, are 18 how-tos of innovation every entrepreneur should consider.

HOW TO CONVINCE PEOPLE THEY NEED YOUR INNOVATION

KARL JACOB

Over the past year, many different technologies have come out for fighting spam. Using traditional advertising to differentiate yourself in such a crowded market just doesn't work. Instead, we make sure all the technical people at the big companies, like IBM, get a free copy of our software. Once people see the techs using it, they assume it's the best product and start using it themselves.

KARL JACOB is the CEO of cloudmark, a company that develops spam-fighting technology.

HOW TO TRANSLATE YOUR IDEAS TO FOREIGN MARKETS

JENNY HSUI-THELEEN

So many American companies just jump into foreign markets without a plan. Don't bring your business plan in and then hire people. Hire people on the ground first who can make your idea happen, and then bring your plan over.

JENNY HSUI-THELEEN is the founder of China Vest, a venture capital firm focusing on China.

HOW TO TAKE ADVANTAGE OF NEW INNOVATIONS

BOBBI HANSEN

A lot of travel agents see the Internet as the innovation that is going to put them out of business. But why not draw on people's belief that the Internet always delivers lower fares, and advertise you can beat Internet fares? That bold statement draws customers. Then you deliver lower fares, and you have them. We check our internal booking engines so frequently, we get better fares than the online sites. Clients are shocked we can [beat] the Web, and they become repeat customers.

BOBBI HANSEN is the president of Sunflower Travel.

HOW TO CREATE A NEW PRODUCT

Allow everything in the environment around you to trigger ideas. In November 1981, I worked for IBM, working with lasers, cutting organic plastics. I was sitting at my Thanksgiving dinner table, staring at the turkey, and suddenly I wondered how a laser would cut organic matter like a turkey--or a person. I stashed a turkey leg and went into my office the next day. With no one around, I used the laser to slice through the turkey leg and then looked at the results under a microscope. I found it cut right through and could remove tiny bits of material without causing heat burns to the tissue. From there, I developed the idea of using lasers to cut eyes.

RANGASWAMY SRINIVASAN invented laser eye surgery and is the 2002 inductee into the Inventors Hall of Fame.

HOW TO SURVIVE IN AN INDUSTRY DOMINATED BY BIG COMPANIES

You can be inventive in the executive recruiting business and still [have] no customers because the industry is dominated by large companies. We target midsized companies, and we hammer over and over the advantages we have over big firms. As a small company, identify one thing you do better and then hammer at how much better you can do that task.

BRUCE FRIMMERMAN is the president and CEO of executive recruiting company Recruit Masters Inc.

HOW TO ENCOURAGE EMPLOYEES TO INNOVATE

ARNOLD SANOW

Don't let them be automatons. The best companies take the risk of letting their employees make major decisions involving decent sums of money. At McDonald's, the employees don't come up with new ideas because they are not allowed to make a decision about anything important without consulting the manager first. At Home Depot, any employee on the floor can make a decision about whether to discount a product or whether to change something they think is marked wrong. Some of these decisions can cost thousands of dollars. It's not surprising that Home Depot gets many new ideas from ordinary workers.

ARNOLD SANOW is a business strategist and the author of Marketing Boot Camp (Kendall/Hunt Publishing).

HOW TO GET THE WORLD TO TAKE YOUR IDEAS SERIOUSLY

JAYSON MEYER

When I moved into doing very specialized healthcare software work, I got respect. If you make the effort to master an industry, such as health-care software, that demands that you know a large amount of specific detail. People will take you seriously because the barriers to entry are high.

Even if you are in an industry that requires less specialization, dedicate yourself to gaining mastery of some specialized details, and you will get respect.

JAYSON MEYER is the cofounder of Meyer Technologies/WorkSmartMD.

HOW TO ANTICIPATE THE FUTURE

MICHAEL ZEY

Let the consumer lead you in anticipating the future. So many entrepreneurs come up with a technology and become wedded to it and wedded to how consumers should use it. But they don't anticipate that consumers might use it in different ways than they had intended.