Data from the United States Bureau of Labor Statistics about startup failure rates revealed that just 80% of new businesses last more than one year. That means that there’s a one-in-five chance that your business will crash and burn before you are able to celebrate its first anniversary.
For most startups, this failure comes because they run out of money. They may lose funding, investors may pull out or their product might not be as large a revenue driver as they’d hoped. What can give a startup a better chance at success, however, is innovation. Making products and providing services that no one else offers that create new solutions to existing problems can help your business stand out and increase its chances of survival. Yes, doing that as a startup on a budget is difficult, but it can be done.
Innovation Management Solutions
You hired your team for their talent and their knowledge of your industry; tapping into that like a miner looking for ore can yield great results. Not all organizations are set up for this sort of collaboration, however, so you’ll need to make a few changes to encourage innovation. One thing you may find helpful in this regard is an idea management platform. An idea management platform is a system that gives you a streamlined way to take on ideas from your employees and customers. A more sophisticated version of the suggestion box, it helps you to turn brilliant ideas into moneymakers.
These platforms can help change your office culture and allow you to detect ideas that can be potentially lucrative. Systems like those offered by Qmarkets can also give you a way to see the return on investment of these ideas and see if they’re working or not.
Create Innovation Teams
Your employees may find it difficult to come up with new innovations while working on other tasks for your business. You may need to create innovation teams, such as Google’s X Development team which has created products such as its Waymo self-driving vehicles, Wing which can deliver products with flying vehicles, and Loon which uses balloons to provide internet access to remote areas. Analysts say that Waymo could one day be worth $175 billion, Project Loon is expected to be worth $10 billion, and the drone delivery market that Wing is a part of is worth more than $29 billion.
Put Funding Into Education
Some of your employees may have great ideas but feel that they don’t yet have the right skills to work on them. Use a section of your budget and put it into an employee education fund so that they can develop these ideas. This can also grow employee loyalty and reduce turnover and gives you something that your competitors don’t. The estimated cost of one module of higher education costs £1,000, so multiply that by course and employee for the full figure.
Work With Other Companies
The saying is that two heads are better than one. A new saying could be that two budgets are better than one, where two businesses are able to fund research and development. To find a business to work with, look at companies outside of your industry that you have some overlap with. You could also look at companies you’ve worked with before so that they understand your work processes.
Nintendo’s announcement that it would be getting into mobile games, working with DeNA, saw its stock price grow by 28% in the United States and 21% in Japan. When Airbnb teamed up with social magazine platform Flipboard, the content it created generated 4.2 million page flips and had a 9% click-through rate for Airbnb, which potentially made the company millions of dollars of revenue.
Testing all of your innovations may be difficult, expensive and can take time to provide a return on investment. However, you can develop MVPs, or minimum viable products, that may not have all of the tools but can still be released to make money. You can then make changes to your innovation to make it better.
Startups don’t have to keep away from innovations. They can be great new revenue streams for a company, but founders just need to budget and spend correctly.