By Rieva Lesonsky
Do you dream of starting the next Facebook, Google or Instagram? Even if your small business isn’t located in Silicon Valley, with access to world-class talent and venture capital, there are some important startup and growth lessons you can learn from Silicon Valley success stories. Scientific American recently highlighted the findings of a study that sheds light on what makes Silicon Valley such a hotbed of business growth.
Innovation is the root of success in Silicon Valley, but there’s more than one way to innovate. In fact, the study pinpointed three types of innovators in Silicon Valley. The first and most successful: The Need Seeker. These companies focus on finding out what their customers/target market need (whether those needs are spoken or unspoken), developing products or services to meet those needs, and getting their offerings to market ASAP.
There are many benefits to being a Need Seeker. Specifically, the study found that Need Seeker companies’ profits and value grew faster than any other type of company over a five-year span.
How can you become a Need Seeker? In addition to doing ongoing market research and staying in touch with what your customers need, here are some other habits of successful Need Seekers:
- They communicate their overall business strategy to every employee.
- They devote time and budget to R&D; at the same time, they’re open to ideas from outside the company or from any department within the company.
- They create a culture where employees are passionate about the company’s products and services and strongly identify with the customers.
The second type of Silicon Valley innovator is the Technology Driver. These are companies whose product offerings are led by what they’re able to do. As the authors put it, they “take their direction from their engineering departments, rather than their customers.” The danger of this approach, of course, is that you may get so caught up in what you’re able to develop that you forget to ask whether anyone is willing to pay for it.
A better approach for small businesses is that of the third type of innovator: Market Readers. “If you can’t be first, be fast” is the motto for these companies. They quickly copy ideas from first-to-market Need Seekers, make incremental improvements or adjustments to differentiate their offerings, and get to market rapidly to take advantage of demand.
You may not be located in Silicon Valley—but there are some things you can do to share in its “secret sauce”:
- Value innovation, both in word and deed (i.e. with your checkbook).
- Hire and reward employees who are passionate about serving the customer.
- Stay in close touch with your customers by surveying them, connecting with them on social media and just plain talking to them to see what they want.
- Keep ahead of your competitors by doing market research, reading industry-leading blogs and journals and keeping your eyes and ears to the ground to spot the “next big thing”—and get in on it fast.
- Remember, perfect is the enemy of good. Focus on getting your product or service to market fast. Test your idea on a small scale first; then fix problems and scale up as you go.