The Innovator's Dilemma (Book Review) PART 1

“Innovation built this goddamn city!” - Unknown.

Before we dive into this review,  Ferzona has a goal for doing all of these. Ferzona currently runs a business (Ferzona Mobile Repair & Ferzona Events) in Cambridge. Ferzona is willing to share with you his journey running a business in the city of Cambridge. He is willing to share with you the knowledge he has acquired during this journey and the books he's learned to acquire that knowledge. I believe the entrepreneurial drive is present within the very soul of each of us. Why? It's simple. Entrepreneurs heal wounds, solve problems, shape lives, transform cities; and created the very fabric of civilization we enjoy today. In other words, Entrepreneurs are Heroes! We all can be heroes. All it takes is knowledge and action to awaken the dormant drive living within us. Here I am sharing the first part of this equation with you: Knowledge. Dive in! [Special shout to Caleb for taking that action; A #FerzonaFollower!]

Ferzona's Intro

Not everyone knows this: Every successful business today exist because they fulfill a primary duty - Value Creation. Plus, a 'company' is nothing more than a shell that houses a business or multiple business. 

There are two ways to look at value creation. Either you go big n berserk and sniff out innovation (electric cars, online movie streaming, Augmented Reality) or you go traditional and offer basic stuff like phone repairs, retailing groceries and hair dressing. Whichever you do (as long as you do it well), you're in business. But history and current happenings has shown us that the tide to massive success (more often than not) rests on Innovation. What do I mean?

How did entrepreneurial companies like Netflix, Apple, Air BnB steal market share and defeat industry giants - BlockBuster, IBM and Hotel Chains? When we look closely, it falls easily to the concept of innovation. Innovation can be described as a radical change of an existing method of doing things OR (in modern use) the simple application of new ideas, creative solutions, and novel thoughts to solve problems and meet market needs. It might also be the smart idea of revealing a 'hidden problem' within a market and offering a ready-made solution. Regardless of whatever definition we take, this concept of innovation is what made many start-up companies the money-making machine they are today. They create new products/services (value) that benefit consumer's lives in new and amazing ways and exchange that value for money. If their product/service attracts a huge customer base; they make huge amounts of money. Netflix, Apple, Air B'n'B delivered innovative solutions to common problems within their various markets, which attracted a huge chunk of the population and this simple approach drove earlier industry giants out of business. [..and made these start-ups lots of money]

Remember this: Every business exists to MAKE as much MONEY as possible. This includes innovative companies. The two guaranteed way of staying in business and making much money is:
1. Constantly innovate - Create new, useful and attractive products regularly. This is the APPLE approach with the launch of a new iPhone once a year with mind-blowing features. OR
2. Maximise profits on existing value - The NETFLIX approach: Launch an innovative movie streaming service. Make it cheap (to rapidly attract paying customers), then gradually increase price to get more money. [Any business that offers the same products/services while sneakily increasing price under various smokescreens will fall under this category.]

Look....Innovation is great. Every big and massive company you know today; I can almost guarantee you; is an innovative company or was at some point in their lives. They come up with new and brilliant ideas that make consumers’ lives easier, smoother and more enjoyable. However, the benefit is not one sided. The incentive for companies to innovate is very obvious. Consumers reward them with market dominance! [...which means a shit-ton of money for these companies] But....the big but, innovation comes with a sulky price. It takes unbelievable man hours of thinking and big money on R&D (research and development) to come up with the next big thing. A few times you succeed; majority of the times you fail. Not pretty!

Putting the maxim of making money and the duty of value creation side by side; the options become clear for businesses. Either take the hard route of constant innovation and anticipating market change OR innovate once and squeeze every ounce of profit you can from your previous hard work. The solution to most of us, is very clear.

The Book!

Creating innovative value is hard enough; constantly going down that route is even harder. Huge companies will rather sustain prior innovation (maximise profit on existing value) than continue in a loop of creative genius. The reason why small and entrepreneurial companies will always have the opportunity of defeating huge giant companies is because of what Clayton Christensen(Author) calls "Disruptive Innovation."

[PART 2 COMING SOON!]