By
definition, innovative firms are 'idea' firms. The idea may take the following
forms:
a. New
products.
b. New
services.
c. New ways
of doing things in a cost-effective way.
In reality,
innovative firms tend to grow exponentially because they meet needs that
consumers can't get elsewhere. They tend to be monopolists in this area. One of
the obvious reasons why innovative firms are important is job creation.
Innovative firms such as Google, Yahoo, Starbucks, Microsoft,
Enterprise-Rent-A-Car, and others are the largest job creators in the United
States. Take a look at the thriving regions in America, and you'll
discover that the highest employers of labor are innovative
firms.
Having big
ideas is one thing, implementing these ideas is another thing. At times, or
most of the time, an idea might not seem totally new. For instance, Google
wasn't the first search engine, nor was Starbucks the first coffee shop chain
in America. But, both of them became successful by improving upon existing
ideas, in an extraordinary way. Some innovative firms came into existence by
fine-tuning not-so-big ideas: Fred Smith named his company Federal Express,
because initially, it was meant to serve the Federal Reserve System. When this
concept failed, he expanded his strategy to serve American businesses. Starting
an innovative firm attracts lesser risk level. But, growing this business is
where the risk factor comes in. With an increased capital, and asset base,
there will be the tendency to lose everything; and i mean, everything.
This is not a reason to quit, but a testing
ground to know how tough you are as an entrepreneur. You just have to fire on
all cylinders to get your business going. Please, share this post to your
friends.
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