This is a great Dilbert cartoon from Scott Adams earlier in January.
I have heard a lot of people or company’s say they need to act like a start up to get innovation. I find this to be alarming. At one time, the company had to be innovative or it probably wouldn’t be in business today.
Somewhere along the way, the company hit on a big innovative idea and migrated from innovation and trying new things to care and feeding of the big idea that put them on the map. It is an easy trap to fall into. It isn’t about acting like a start-up, it’s about never losing your roots as a start-up company. Innovation and care and feeding must happening at the same time. It isn’t one or the other. It should be both. The ones who do both well…win.
There are many small start-up companies out there that create quality products and are trying to survive and flourish. Some are making new and innovative products while others are trying to fill a need that they see in the marketplace. The former describes my wife’s small business Crimson Hill Soaps and Scents.
My wife started the company because our kids and I are very sensitive to the detergents and chemicals that are in mass produced soap sold in stores. Following the suggestion of a fellow soap maker, we tried all-natural soap and were amazed at how quickly it helped our skin and we were hooked. After months of research and meeting many people, especially children, who were dealing with similar sensitive skin issues, my wife knew she had found a niche in the market that was untapped.
After months of trial and error and refining recipes, Crimson Hill Soaps & Scents was born. My wife has a complete line of natural adult soaps as well as soaps just for kids. My wife is very entrepreneurial, so she created her own website and online store and also started promoting online. She attracted local customers by attending handmade craft shows on the weekends. The soap business grew and, before she knew it, the soap was selling consistently and most importantly, she was passionate about what she was making and selling.
Isn’t this how all companies start off? A need, a passion, and a ton of hard work. From there some businesses stay small while others grow into giant companies like Apple or Microsoft. For instance, one of the suppliers my wife buys her materials from started with one woman making soap in her home to gain extra income to help support her disabled child. Her vision has grown into a multi-million dollar corporation that still has the best interest of the small businesses at heart.
There are people making incredible products that are affordable and very high quality. These are two concepts we talk about from a lean perspective. Managing cash flow is another metric we use in lean but it also applies to the small business owner too. Getting cash into their hands as quick as possible and not tied up in inventory is not easy for the small business owner, as it takes time to understand the marketplace and product demand. Now that we know the amount of effort that goes into running a successful small business, my wife and I find ourselves supporting small businesses whenever possible by buying unique items as gifts or for ourselves.
With the holiday gift-giving season quickly approaching, I encourage you to shop online at Etsy and ArtFire. These are great websites that allow small businesses to sell their handmade products to the world with ease. These websites started because of the vision, creativity and need of small business entrepreneurs. Who knows….one of these people could become the next Warren Buffet.
Last week, I came across a great article about Atari and how they started the video game revolution. I found it very interesting how the article talks about Atari being the original lean startup. The article points out how Atari used rapid prototyping.
The forerunner in the video game world used a disciplined approach to testing new products and ideas. It followed lean manufacturing principles applied to innovation (such as rapid hypothesis testing and validated learning about customers) and had a disciplined approach to product development.
What really struck me was Atari founder Nolan Bushnell’s ability to see a vision for new technology that was being developed.
Atari came to life in the time of mini-computers, but at $2,000 apiece, those systems were prohibitively expensive as a platform to market games. Atari founder Nolan Bushnell quickly realized this and knew he would have to invent a radically cheaper platform if he wanted to enter the market.
What I did notice was how Nolan had engineers go and see how the games were used and distributed.
Bushnell felt his engineers had to experience being in the shoes of both customers and distributors to experience their pains first-hand. Engineers were charged with running games in test locations, with P&L responsibilities, like real distributors. As a result, these engineers found problems and defects before customers or distributors and got a better sense of which games worked and which didn’t.
Atari also rotated its engineers onto rotation on the assembly line, so they could learn to design products for ease of manufacturability.
Sounds a lot like lean thinking to me. I’m not saying Atari was a lean company, but they sure seemed to use a lot of the thinking in the early on stages of the company.
Did Atari fall because they got away from this thinking? If so, why do companies get away from the principles that made them successful in the beginning?
I thought this was a very interesting article to share.