Innovation in Startups – Creative or Copycat?

Innovation is assumed to be the corner stone in entrepreneurial success. Innovation is viewed as the source of success in the market economy, and it maybe vehemently reinforced by today’s changing and competitive environment but the fact remains that many of the innovations are copied and brought from another market or system giving it a fake newness. Does this mean innovation in Startups, especially with reference to India is a myth? After all statistics shows that out of 134 countries, India ranks 35 in innovation capacity index while it is ranked 3 in the number of engineers and scientists.

At the core of this issue is setting the premise of what is innovation itself and more importantly differentiating it from creativity and invention.

Innovation Vs Creativity and Invention.

Creativity is the ability to create something new, to invent or produce through imaginative skill. Creativity is an attitude, an ability to accept new changes and make way for them. And creativity is also a process, of hard work and continuous improvisation.

The minds of men/women were engaged in creative thinking to deliver the visible products we enjoy today. Graham Bell’s Telephone, Wright Brother’s airplane or Steve Job’s iMac.

Digital entrepreneur Tom Grasty writes in a at MediaShift Idea Lab.

Invention is the “creation of a product or introduction of a process for the first time.” Thomas Edison was an inventor.

Innovation happens when someone “improves on or makes a significant contribution” to something that has already been invented. Steve Jobs was an innovator.

The question we need to ask at this point is where is the entrepreneur in all this? Is he the creative one, the inventor or the innovator?

Grasty explains this a little deeper with an analogy;

“If invention is a pebble tossed in the pond, innovation is the rippling effect that pebble causes. Someone has to toss the pebble. That’s the inventor. Someone has to recognize the ripple will eventually become a wave. That’s the entrepreneur.

“Entrepreneurs don’t stop at the water’s edge. They watch the ripples and spot the next big wave before it happens. And it’s the act of anticipating and riding that “next big wave” that drives the innovative nature in every entrepreneur.”

The virtue of a Copy Cat

So Innovation creates new demand and entrepreneurs bring the innovations to the market. And of course media, the government, Organizations and the public alike have jumped on the innovation is the best bandwagon. Every year the sheer rising number of awards for innovation is innovative indeed.

But in the present volatile and dynamic market conditions, under the dazzle of innovation, is imitation taking a back seat? Let us revisit the above paragraphs. Are we talking as inventors or entrepreneurs?

Drake Bennett in an article in Boston Globe titled “The Imitation Economy” states; “But invaluable though innovation may be our relentless focus on it may be obscuring the value of its much-maligned relative, imitation. Imitation has always had a faintly disreputable ring to it — presidents do not normally give speeches extolling the virtues of the copycat. But where innovation brings new things into the world, imitation spreads them; where innovators break the old mold, imitators perfect the new one; and while innovators can win big, imitators often win bigger.

Accenture, published an article entitled Leading by imitation in their Outlook advising that “more and more businesses are grabbing great ideas wherever they can get them – elsewhere in their industries or beyond. But the true high performers are actively creating systemic competitive advantage by elevating their imitation game.”

These are startups, if the term can be used for imitators, who believe in the first mover disadvantage and identify and build on proven business models. The imitation mentally is often called the Chinese way of business and India is not far behind.

In 2007, Flipkart became the Indian answer to the US e-commerce giant Amazon, and three years later Bhavish Agarwal’s Ola took on US taxi aggregator Uber. Both these imitator startups have managed to keep the pioneer on its toes in the Indian market. These are not the only ones. For every successful innovator in the US, there are many me-too startups in the Indian market.

But at the grassroots level, while the ideas look copied, the startups operate the business models differently. Many innovate further, adding or customizing to the local market. For example, US based grocery app Instacart is said to have many imitations in the Indian side. But a closer look maybe needed in this callous classification. Ninjacart ties up with local kiranas and farmers to sell directly, Veggiecart offers discounts and Grofers has the advantage of having their own storage. There maybe around 50 me too grocery app startup in India but they are fighting for their niche and creating differentiating markets every day.

There seems to another reason that copycat startups cannot be dumped just on the entrepreneur’s court. Many VCs in India are investment shy and ask for success models elsewhere before investing. VC pressure is a reason echoed by many entrepreneurs who even market their startup as the new ABC of US in India.

But again going back to a bit of literature on innovation,

Fiona Fitzpatrick identified the following elements of innovation:

  1. Challenge: What we are trying to change or accomplish-the “pull”
  2. Customer focus: Creating value for your customers – the “Push”
  3. Creativity: Generating and sharing the idea(s)- the “brain”
  4. Communication: The flow of information and ideas –the “life blood”
  5. Collaboration: People coming together to work together on the idea(s) – the “heart.”
  6. Completion: Implementing the new idea-the “muscle”.
  7. Contemplation; Learning and sharing lessons lead to higher competency-the “ladder”
  8. Culture: The playing field of innovation includes:

Leadership (sees the possibilities and positions the team for action-the role model)

People (diverse groups of radically empowered people innovate –the source of innovation)

Basic values (trust and respect define and distinguish an innovative organization-the backbone).

Innovation values (certain values stoke the fires that make the “impossible” possible-the Spark).

9. Context: Innovation is shaped by interactions with the world.

According to this classification, the copycats are also innovators who create customer focus, contemplation and context.

In conclusion, successful entrepreneurs require an edge derived from some combination of a creative idea and a superior capacity for execution. A tried and successful business model is not wrong, but not working toward the business model and expecting results on the short term is an error.

This adherence to the “status quo” may sound completely antithetical to the concept of innovation. But an idea that requires too much change in an organization, or too much disruption to the marketplace, may never see the light of day.

 

 

1 Comment on Innovation in Startups – Creative or Copycat?

  1. ‘ Do Investors look for Me-too models as safe bets… If Innovation has to begun, should it begin with the Innovator or the Environment, especially the Foster-Fathers!’ – that is the thought I am carrying off reading the article. Brilliant start, middle portion and the end – it is like a movie, with the climax best left to the audience. A wonderful piece, Latha.

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