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What do the following industries have in common: rental cars, DVD rental, deli meats and hand soap?
Many would quickly point out that these are four mature, competitive categories. Asked if these are industries they’d choose to enter, our hunch is that most managers would decline. And yet, despite the assumption of slow growth and price-sensitive competition, each of these categories has recently seen a dynamic new entrant achieve success. I'm talking specifically about Zipcar(rental cars); Netflix(DVD rental); Kraft Foods'Lunchables (deli meats); and Method (hand soap).
Dumb luck? We don’t think so. Each of these companies followed a proven path for successful innovation.
Typical of new innovations, the aforementioned products were, at first, not good enough for most people to use. Some were too limited, some too technically demanding, and others too inconvenient or expensive.
The early days of many great products that ultimately gain mass acceptance are spent serving a small number of the most eager customers. Think of the early PCs. Indeed, they were truly just toys and hardly up for the tasks of engineers or executives.
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