In was Langdon Morris that pointed out in his book that “Great companies disrupt industries by reshaping entire market ecosystem. The market is forced to adapt to them”.
What example comes to mind? Google, Amazon, Facebook, WhatsApp, YouTube, UBER etc. These companies reshaped their entire market ecosystem as a result of their innovation. In Langdon Morris’ book called “Agile innovation” (he co-authored it with 2 other people and was published by Wiley) he broke it down that innovation is made possible by a way of thinking that comprises of 5 key components:
Innovation is about 10X improvement NOT 10% better.
One of the greatest innovators of our time is Larry Page, co-founder and CEO of Google.
He said that, “…. It’s often easier to make something 10 times better than it is to make it 10% better”. He lives by this mantra which helped him to look at everyday problems from a completely different point of view.
Take for example Google Search. Google Search helped to solve the problem of archiving and retrieving information. Before the internet and search engine came, you have to depend on libraries. The issue is that a better library would NEVER solve the world’s library problem. Google and other search engines disrupted that industry forever.
The Components of 10X innovation
In companies like X (which I will talk about later) and other present-day 10X innovative companies they are of solving HUGE problems with RADICAL solutions by exploiting BREAKTHROUGH technologies.
Let’s look at a few examples.
Google X. [Moonshot thinking]
X, previously Google X, is a semi-secret research and development facility created by Google. On their site they listed some of the amazing projects they are working on like self-driving car, Google Glass, Project Loon Internet service via balloon, Makani energy kites (to make clean energy accessible for everyone), drone delivery service dubbed Project Wing. On the health fields they ventured on the Google Brain neural network, creation of smart contact lens (that monitors blood-sugar levels and corrects vision in a new way) and a project that hopes to release nano-particles in the bloodstream to detect early disease.
According to Astro Teller; the President of X, below is the blueprint that drives the radical innovations at X:
We look for a huge problem in the world that affects many millions of people.
Then we try to propose a radical solution for solving that huge problem.
And third, there needs to be some reason to believe that the technology for such a radical solution could actually be built. Some glimmer of hope to get us going and some clear first few steps we could take along that journey. (source)
2. WhatsApp [Achieving scale with minimal resources]
WhatsApp took instant messaging to a whole new level at a scale that is enviable with only 57 engineers. At 1 billion user count, WhatsApp alone does more messaging than the entire SMS industry combine.
The global SMS system does around 20bn messages a day. WhatsApp is now doing 42bn. With 57 engineers. pic.twitter.com/zZrtSIzhlR
— Benedict Evans (@BenedictEvans) February 2, 2016
According to Jan Koum, WhatsApp wanted the experience of messaging to be seamless that he did not allow advertising to interrupt user experience on the Platform, even when that meant lower ROI than competing platforms like WeChat. At their recent anniversary announcement, WhatsApp announced its radical turn to position itself as a business tool.
3. Rocket Internet [Execution and Speed]
Rocket Internet is the king at scaling and execution. Their mission is to be the largest Internet Company outside US and China with a business model to clone successful US startups in their target markets. They have cultivated tremendous brutal execution tactic to make this happen.
From day one, Ollie (Oliver, Rocket Internet’s CEO) knew he wanted to copy other companies. He didn’t care about being original. He only cared about execution and he chose every other location except US and China.
The team at Rocket often cared about how fast they can validate that an idea will work. For example, once an idea of what startup they want to clone is picked, the next step was all about growth. It was growth at all costs. The first six months is 100% week-over-week growth. Then, after $1 million in revenue, it’s 20% growth every month. That way, they built billion-dollar companies in 36 months.
Today, Rocket Internet is worth $4 billion and spreads across most of Africa, Middle East and Asia.
4. Slack’s [Simplicity and Gamification]
Slack is the fastest growing B2B SaaS business app ever. From its early days, Slack has enjoyed the highest adoption rate for any enterprise app.
— Marc Andreessen (@pmarca) February 10, 2014
So, what has Slack done to stack the odds so monumentally in the favor of growth? According to GrowthHacker what they did early on to set the stage for success include:
Defining their market space and identifying user pain
Nailing the product experience by focusing on doing a few things exceptionally well
Using a freemium model that fueled bottom-up word of mouth growth
The success of Slack has many secret sauces.
In one part, the secret is that Slack hired a design agency to turn their early prototype to something that is fun to play with. In another part it could be because the product focuses on teams. It could also be because Slack is the product of game thinking which makes it to be addictive. Stewart Butterfield, Slack’s founder summed it all up in an exclusive interview with First Round Capital.
5. Android [Build an ecosystem]
Android is the global open source platform that powers 80% of smartphones. It is the fastest OS or app to reach 1 billion users. Even though, Apple’s appstore is a lot more profitable than Android it has achieved significant success by building an open-source OS used by leading OEMs.
6. Uber [Redefine your market]
In every city where Uber operates, it is a clear warning that it is no longer business as usual for the taxi industry. On-demand taxi apps like Uber, Lyft, OlaOla did more than merely improve on the taxi industry, but created a completely new market by shaping how people move from place to place including their latest attempt at self-driving cars
James Altucher, a New York Bestseller went as far to “prophesy” that the impact of this “UBERised” way of thinking is going to eradicate some tradition businesses just like Uber actually put the Taxi industry in countries like France to panic.
7. Payment [a fusion of online, mobile and banking]
One of the key areas which I think is ripe for 10X disruption is payment. So, how can we bring some of the lessons we learnt above to 10X innovate payment. What do you think it will look like?
In plain terms, I mean it should do the following well.
1. Reduce Transaction cost. Currently, the cost of moving money is high as a result of associated gateway fees. There is a need to leverage new infrastructure to reduce transaction fee
2. Seamless inter-connectivity. Imagine that you can move money around in whatever form and be able to carry on transactions without being required to register with financial providers. For example, being able to send money from a VoguePay wallet in Nigeria to the PayPal account of a friend in US or bank account of a customer in India seamless
This platform can also adopt its global exchange platform to converts any locally accepted means of exchange to a legal tender among its large network of partner; such that even my local telco airtime can be exchanged for cash value (like Rupt was attempting to do) and bitCoin, dollar, naira, cedis will all be referred to as pools of money.
3. Platform. I am almost asking for too much already. But imagine a trusted payment platform that can be extended to receive any payment on the push of a click. School fees? medical bills ?hotels? Subscription? Everything hooked to this platform.
(While I was writing this piece, I came across the medium post of Ade Olabode, CEO of Prognostore. His post captures some salient points too – touching on data access, privacy and security issues )
I am aware of the efforts of different #fintech startups to solve this problems (I am actually working with a payment startup too), yet some of the current providers still have a big opportunity to 10X innovate and disrupt the market leaders. I am aware that the infrastructure for innovation is costly, but if we redefine the problem, we can solve it differently.
One option that looks closest to the answer is the “Stellar Way”.
However, Stellar claims it functions a lot like SMTP is to email by allowing other payment players to build on its network. Hopefully, this might revolutionize the payment industry if it eventually takes off, especially as a low-cost alternative to Western Union and SWIFT services.