Ever heard the phrase, "one must spend money to make money?"
With today's tight credit markets, that's one cliche in danger of fading from memory. To compensate, an increasing number of companies are spending a different kind of currency -- intellectual capital in the form of innovation.
Regardless of industry or sector, it is the innovators -- those coming up with new technologies, or new, interesting ways to utilize existing technologies -- who are redefining successful business models.
'Revolution' Vs. 'Evolution'
Commercially successful innovation tends to come in small, consumer-oriented steps, says Alberto Yepez, chairman of the Hispanic IT Executive Council, an organization that seeks to prepare Hispanic executives for world-class business and IT leadership.
He said the biggest leaps, which he calls "revolutionary advances," spring from academia. However, the steady raising of the tech bar comes from "evolutionary advances," like the innovative or more targeted use of existing technology.
Mr. Yepez, a partner at venture capital firm Trident Capital, founded and sold two startups, was a long-time senior manager at Apple, and has served on many tech company boards of directors.
"In the case of my two startups, innovation came not necessarily from great ideas, but by working to address customer needs. If you listen to the customers and they give you direction on what's required, it generates successful innovation," he told Hispanic Business magazine.
Rocking The Music Industry
Innovation results in tweaks and more to once-entrenched business models.
Already on the cutting edge of Web innovation, Peter Rojas, the founder of ultra-popular gadget blogs Gizmodo and Engadget, launched his newest enterprise last November. With RCRD LBL ("Record Label"), Mr. Rojas exploits the Internet's potential to revolutionize the marketing and delivery of products, especially in the entertainment industries.
The venture is based on the idea that music can be distributed free to customers, if advertisements are displayed during the search-and-download process. Mr. Rojas said that RCRD LBL was started as "more of an experiment or proof-of-concept" than anything else.
"We wanted to see if we could get amazing bands to let us give their music away; whether we could get big blue chip brands to spend real dollars with us; and whether we could get music fans to care," he told Hispanic Business.
RCRD LBL has satisfied all three of those goals, even in the crowded online music space. However, Mr. Rojas is quick to point out that it's not change for change's sake, but one that makes sense for his goals and audience.
"I think for what we're doing, which is focusing on emerging artists, a free, ad-supported model makes a lot of sense," he said, "but I don't pretend that it's the only model or the best choice for every artist."
An Affinity For Technology
One group displaying a particular affinity for cutting-edge consumer products is Hispanics. According to a study by M:Metrics, a research company specializing in data on mobile usage, almost three-quarters of English-speaking U.S. Hispanics use text messaging, access multi-media, or surf the Web via mobile phone.
Mike Valdés-Fauli, managing partner with The Jeffrey Group, has seen this first-hand. His job with the marketing, communications and public relations firm is to "target the Hispanic market where they live and breathe," so he's in a perfect position to observe that group's interaction with technological advances.
"Where once 100 percent of our efforts went to print and radio, we now have a wider focus and breadth of outreach tactics," he said, adding that his firm has noticed the Hispanic market's propensity to adapt quickly to innovation.
"[Many] who didn't have cell phones last year have an iPhone today. Hispanics who didn't have an Internet connection last year skip dial-up and go straight to broadband," he said.
"Now Hispanics are at a higher percentage than the general market as far as texting, Google mapping, and instant messaging on their cell phones."
Learn To Ride The Innovation Wave
Mr. Valdés-Fauli said that even in a communications role, his clients demand "at least some understanding or capability in working with the newest technology". Some clients, he added, "absolutely require an ability to provide counsel and outreach plans involving technology."
Mr. Rojas takes the view that young people will quickly adapt to changing technology; their willingness to try new technologies marks a major change from past generations.
"Young people today don't wait to be shown how to use a computer, or send a text message, or edit a video," he says. "They just mess around with something until they figure it out."
Shrinking World = Giant Possibilities
Familiarization and comfort with technology are important. However, formalized training is a major issue and Mr. Yepez is troubled by the lack of Ph.D.s in the Hispanic community. "You need highly specialized education to make the next huge play," he said.
A tech-savvy individual definitely has the advantage in enabling "global citizenship." Technological innovations are making business much more flexible and allowing access to the world from a desktop, a handset ... or from anywhere.
"As a global citizen, you can see the big picture. You can look elsewhere to see where jobs are being created and how people are making money," Mr. Yepez said.
The future appears to belong to the companies, managers, and employees that are not afraid to embrace change, those who can use technology comfortably to stay customer-focused, world-conscious, effective, and creative.
It will be business people who can hit the sweet spot between early adoption and practical application who will be in perfect position to capitalize on technological innovation.
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