Innovation at Cox Automotive: Driving Products or Businesses?
As anyone who watches my favorite show Shark Tank (or peruses Kickstarter) can tell you, interesting products don’t necessarily lead to successful businesses. Many times, they’re simply not built to sustain a business. This can often be the case within enterprise innovation labs, and innovators often struggle to determine whether they’re building new products or building businesses.
At one of our recent innovation events in Atlanta, we heard from Cox Automotive VP of Strategy — Mobility Mike Burgiss on his development of an internal startup within Cox. A particular thought from Mike struck me at the event: as an innovator, you don’t need to know if your idea is a product or a business; you just have to know what it is right now.
Depending on the mission of your innovation lab, most innovators have a months-long timeline to figure out where an idea fits into the enterprise’s portfolio. While innovators need to remain mindful of the long-term business goals and customer impact of a potential innovation project, they don’t necessarily have to architect a completely new business unit.
The ultimate goal is to prove whether an innovation project can sustain a business or plug into an existing core business unit.
Finding the line between product and business may seem like semantics, but it’s critical for innovators to identify the path they’re walking. Products can be plugged into the existing enterprise architecture, while businesses require long-term planning, budgeting and a commitment to iteration. If you look hard enough, you can see enterprises testing new businesses in real-time.
Build First, Business Later
Identifying a business model with an innovation initiative can be tricky, but there are plenty of highly visible iterations if you know where to look. Big digital companies like Facebook and Google make it easy to watch innovation unfold.
Facebook has been deploying its video ad services for more than two years, slowly working out a platform that works for both advertisers and content creators — it’s been a delicate balance and Mark Zuckerberg has refused to run pre-roll video ads, the standard across other content platforms. Now that Facebook users consume more than 100 million hours of video every day, Facebook is aggressively innovating its video products with new business models. After previous models failed to drive revenue for content partners, the company recently announced it will begin airing mid-roll ads and expanding the platform to new creators.
Obviously, we don’t all have the luxury of Facebook’s deep pockets and expansive test-bed of willing (and some might say captive) users to tweak products and business models over time.
But innovators don’t necessarily need that runway to succeed. Innovation takes place across many phases, and more than anything, innovators simply need the tools to prove that a new product has what it takes to resonate with customers. The rest can be worked out in time.
How has your company approached new products and business lines?
This article was originally published on Enterprise Innovation, a leading publication for corporate innovation profiles, news and guidance.