Innovation Beyond the Core with John Carter

In the episode of this podcast "Innovation Room", John Carter talks about why companies need to look other than core competitors to innovate.

This is because innovation other than the core competence often leads to a highly profitable growth opportunity, and is easier, quick and low. John also talks about how companies take this opportunity and maximize.

As you may have remembered, John is the founder of TCGEN, and through his career, he has advised many global companies, such as Apple and Amazon, and advice on innovation processes.

Table of contents

• What is innovation beyond the core?
• merit
• example
• Failure
• To succeed
• Organizational support
• summary

What is Innovation Beyond the Core?

Jesse: Today's topic is innovation beyond the core. Of course, most companies, including innovation, spend most of their resources on their current flagship products and activities. But you argue that if a company wants to grow, it needs to exceed it. Could you tell us what you were interested in this theme?

As you know, Jesse, I have spent the first part of my career in Bose on home appliances. It was so not only in this field but also in other fields.

While working with a company like Apple and Amazon, and studying how they are selling products, I have about how successful companies can innovate beyond the core competence. , Some points have been connected.

Let's give an example. By 2025, Apple is expected to make a profit of $ 50 billion with services alone. In other words, except for the iPhone, laptop, and iPad, $ 50 billion profits are not a revenue but profit.

The other is that when you look at Amazon, you think it's a shop, but it's more than that. You know Amazon Web Service (AWS). AWS now has a profit of about $ 10 billion in the quarter, which accounts for 70 % of the current profits. AWS is a smaller company that has nothing to do with the Everything Store, but seems to share infrastructure and is making profits than Amazon's main business.

And why are these companies more outstanding than other companies? I started studying this question seriously and conducted a drainage survey to find out what they were actually doing and how they had such a great success. Of course, they have introduced innovation at major supermarkets in their country, but have introduced innovation across borders.

Jesus: I actually believe in the line that actually clarifies what we have in the form and speaking about the core is great. Finally, can you tell us a little more in detail what the word "core" means and what is going to be further advanced?

Of course. This is a wonderful question and a meaningful clarity.

Everything began with Theodore Levit and his book, Marketing Imagination. In that, he explains very clearly that the product is actually a little more difficult than expected. In other words, you usually think that products are iPad, laptops, or cars.

But in fact, buyers can get products as expected. In other words, it is an iPad with the necessary software, maintenance, help in the event of a failure, and an apple brand that enhances the product and its simplicity.

In other words, there are typical products that are essentially considered a computer without a touch screen keyboard, and basically everyone knows what it is. The iOS14 and other current versions can be considered a representative product. There are hardware and software, which is a leading product.

However, the expected product is what the buyer actually gets. This is a brand, service, help, application, and utility. In addition, Levit says, for example, there are comprehensive products.

These three circles can be assumed that they are for yourself: the inside circle is the core. The next layer is expected, the third is supplemented in the product, which may be a tangible or intangible area, among which products are successful and often please customers. There is a fact that this is not considered part of the expected product. These are likely to be an auxiliary offer. This may be added to the upgrade appearance. Tesla is a good example. You buy a car, but in fact, they get an operating system that they could install overnight, and suddenly you get a completely new machine for the day. Who was waiting for this? Who was waiting that you could install OS on the car overnight and get better results without going to the store? This is an example of a supplement product.

Finally, the core is a basic widget that people acquire, and there are often protected innovations. This may be a leading integrated integrated company in Apple and hardware, and a revolutionary development of batteries and manufacturing technology in Tesla.

These are the main luggage, and as a result, they are characterized by normal innovative arrangements and try to introduce illegal innovation to the core. As a result, they believe that they are obliged to spread and increase.

And this is not a bad thing. It is necessary to continue to develop innovation in your reading area. However, normal innovative alignment focuses on this point. We encourage the organization to introduce innovation under this strategy, which is not only the leading field, but also achieving the largest span in the market with the support of enhanced products.

And, as Amazon and Apple clearly show, the margins of complementary products are quite large, but they have more possibilities. In the case of Amazon, the margin is more than a preceding commercial.

In other words, these complementary areas can generate considerable profits. And instead of assigning investment resources share to comprehensive products, if you do not focus on major products, you will miss market skills and expansion. In fact, remember that all of these should be determined by the product formation strategy that indicates the conditional direction of investment in fresh products.

If you do not allocate investment resources to an expanded product, and focus on leading products, you will miss the market skills and expansion.

Benefits of investing in innovation outside the core

Jesse: As you have already mentioned, how is the excellent quality of investment in these areas other than influential activities?

John: Well, I think there are some. The important thing in it is what the buyers are looking for. They don't want to buy a failed widget. They want to accomplish their work. Thus, innovation in comprehensive products can solve a more serious job for buyers, and as a result, they look more.

The highest profit margin has already been mentioned.

The third is a competitive advantage. Other texts can increase your own market share and control as a result of deciding a huge job if you can think more globally about the enhanced product. 。

There are many good points, but one of them is the fact that people unexpected, but can make technological innovation easier here. Innovation in the to p-notch field hopes to invest in infrastructure, have the ability to enter brick buildings, have the opportunity to enter the laboratory, and have a lot of immutable costs, so the field of supplements. Then, it may be easier to innovate.

However, if you look at the supplemented products, you can often arrange them with mechanical suppor t-based on the artificial origin of the mind, only in the conclusions of maintenance and help. Others require strong and significant investment. In this way, there is another advantage that if innovation is introduced outside the core, a small margin can be obtained with a small investment. Thus, this is a very powerful technique for those who do not have a huge bol t-on coat and want to receive innovation from their bags.

If you introduce innovation outside the core, you can get a big margin with a small investment.

In addition, the important time to implement such innovation has the potential to be shorter. The core innovation generally requires a large amount of investment and a lot of time. Innovation for the finished product may be possible with the minimum and minimal time if it is reasonable. And this means that you can actually do it and do a lot of development immediately.

Jesse: That's good. I basically think that this happens because there is already a core. In other words, there is already a large part of value proposal, which adds a new angle element.

John: Yes. The core is a protected share. In other words, you put a tick and pull it up in various ways.

Examples of Innovation Beyond the Core

Jessef: Do you have the opportunity to share this method safely, depending on the case and situation? You've already mentioned Apple and Amazon, but are there any other examples that make it easier for some audience to understand?

John: Of course, there are some. Probably, there is the first, the largest sample, and the current model in the next, but the current model.

The first example is a really interesting situation. For a while, three organizations were competing for night delivery in the United States.

U. S. postal corporation, Fedex, UPS (United Pursel Service). All of these companies were fighting between ourselves and reaching the Bazaar, Night Delivery, which was just revealed.

The most exciting is that there is only one victory candidate, and that is Fedex. But the fundamental cause of Fedex's victory is not clear.

Fedex's main product is quick delivery. What do you think of this product? Well, you will think of trucks and airplanes. And you'll think of a serious investment. You will think of an operation research that will use these major methods as efficiently as possible.

However, Fedex actually took a favorite position because he did not have any dust, such as business for ful l-fledged equipment. This was not about their main products. In a way, this was not the minimum business for night delivery. It was a tracking. Eventually, Fedex invested on the host, so that if the product was delayed, it could minimize the consistent ones. In a sense, this is a Cabinet Order that fedex is unlikely in general. If they distribute other texts for you overnight, they will not have to track it for the fact that they can be completely trusted. Well, it is not unconditionally reliable, but if your luggage is delayed, you may not be lost, stolen, burned by trucks, or other problems.

She has the opportunity to tell her that her luggage has left the distribution of Memphis and has arrived in our area. You can be distributed, for example, whether it is at the area beyond. All of these luggage did not have a small company for their main products, including a flat park, trackpark and addition. There is no data. These were rudimentary information technology.

As soon as Fedex introduced it, they began to win this place. I was working with UPS, but they were definitely trying to catch it. This is also the field where the first person who entered Bazaar wins.

Innovators often have the biggest market share, which is definitely something that happened to Fedex. In my opinion, this is the best historical model. < SPAN> The most exciting is that there is only one victory candidate, and that is Fedex. But the fundamental cause of Fedex's victory is not clear.

Fedex's main product is quick delivery. What do you think of this product? Well, you will think of trucks and airplanes. And you'll think of a serious investment. You will think of an operation research that will use these major methods as efficiently as possible.

However, Fedex actually took a favorite position because he did not have any dust, such as business for ful l-fledged equipment. This was not about their main products. In a way, this was not the minimum business for night delivery. It was a tracking. Eventually, Fedex invested on the host, so that if the product was delayed, it could minimize the consistent ones. In a sense, this is a Cabinet Order that fedex is unlikely in general. If they distribute other texts for you overnight, they will not have to track it for the fact that they can be completely trusted. Well, it is not unconditionally reliable, but if your luggage is delayed, you may not be lost, stolen, burned by trucks, or other problems.

She has the opportunity to tell her that her luggage has left the distribution of Memphis and has arrived in our area. You can be distributed, for example, whether it is at the area beyond. All of these luggage did not have a small company for their main products, including a flat park, trackpark and addition. There is no data. These were rudimentary information technology.

As soon as Fedex introduced it, they began to win this place. I was working with UPS, but they were definitely trying to catch it. This is also the field where the first person who entered Bazaar wins.

Innovators often have the biggest market share, which is definitely something that happened to Fedex. In my opinion, this is the best historical model. The most exciting is that there is only one victory candidate, and that is Fedex. But the fundamental cause of Fedex's victory is not clear.

Fedex's main product is quick delivery. What do you think of this product? Well, you will think of trucks and airplanes. And you'll think of a serious investment. You will think of an operation research that will use these major methods as efficiently as possible.

However, Fedex actually took a favorite position because he did not have any dust, such as business for ful l-fledged equipment. This was not about their main products. In a way, this was not the minimum business for night delivery. It was a tracking. Eventually, Fedex invested on the host, so that if the product was delayed, it could minimize the consistent ones. In a sense, this is a Cabinet Order that fedex is unlikely in general. If they distribute other texts for you overnight, they will not have to track it for the fact that they can be completely trusted. Well, it is not unconditionally reliable, but if your luggage is delayed, you may not be lost, stolen, burned by trucks, or other problems.

Companies that have failed in trying to innovate outside the core

She has the opportunity to tell her that her luggage has left the distribution of Memphis and has arrived in our area. You can be distributed, for example, whether it is at the area beyond. All of these luggage did not have a small company for their main products, including a flat park, trackpark and addition. There is no data. These were rudimentary information technology.

As soon as Fedex introduced it, they began to win this place. I was working with UPS, but they were definitely trying to catch it. This is also the field where the first person who entered Bazaar wins.

Innovators often have the biggest market share, which is definitely something that happened to Fedex. In my opinion, this is the best historical model.

A more fresh and interesting example is live nation. They are concert promoters and mainly sell tickets. They came up with the concept of 360 deals. A 360 deal is to find artists like Madonna, for example. And contract for all rights. These are also called mult i-judge decisions, mult i-judge trading. This includes goods sold at concerts, group websites, shops, tours, sponsorships, and fan sites. All the extra income created by the artist will be their. The 360 ​​contracts with Madonna reached $ 120 million in 10 years. In other words, this is a really big number.

Can anyone selling a concert ticket expect this? In fact, they worked in the service industry, but they had to be creative and complement them with physical material products. In other words, adding intangible assets does not mean that products will be expanded.

In the case of 360 deals I think I am creative, I created a completely new method to earn more income from artists. Such examples are interesting besides Apple and Amazon.

That way, the dots are connected and you will see it everywhere.

John: Yes, innovation appears in an unexpected field. For example, the insurance industry has begun to pay attention to how many customer data is and how artificial intelligence can be used to extract meaning from that data.

How to Innovate Beyond the Core

For example, an insurance company is investigating people who are susceptible to affected people to understand where to place Kobid Wakuchin and pharmaceuticals. They actually use intellectual data to provide aggressive services. This is an insurance company, but we use AI and OD in other fields.

I think that more and more companies use data as a method of complementing products and services. This applies to all industries with financial services, insurance, banks, and other expansion data.

Jesse: I think there are cases where companies face problems in innovative initiatives to exceed their main business. Have you ever seen a company that failed to adopt such an approach?

• First of all, I read that innovation other than reading work is more profitable and have a chance to put it on a bazaar. Look at the live nations. They don't have the chance to make Madonna every year, but they have all the opportunities. For example, there is a chance to arrange them to change their position, make them stronger, or add accompanying products and offers to their main music services. In fact, this extended innovation could be easier than the main one, and as a result, they are considered real estate.
• The other is that, because the investment is small and the price of the problem is low, there is a possibility of a certain number of failures, but it is not essentially a huge failure.

It is not regarded as a huge failure because the company did not invest a lot of funds in serious equipment, which must belong to a predetermined shareholder. In principle, similar innovation databases have not only strategies but also sympathy for buyers. Usually, buyers don't usually do it because they don't try to settle radical things with their customers.

Therefore, they do not have shareholders, do not sad the buyers, and have no paid shabby. These are rather trivial conditions. But I definitely don't mention what you can't distinguish between you and your listene r-this is that you have the opportunity to be really difficult. As a result of these companies that succeeded in this, it is quite difficult and not enough. However, in fact, in consideration of the low level of investment, it is justified by buyers, and it is actually determined or supported by a business strategy, and many. It has a passing wind. As a result, I don't think it's simple, for example.

In fact, I think people often look for innovation, not places where innovation is needed. They search for innovation in the wrong space, but if they search in a true space and do it correctly, they can achieve the splash.

It's very good. I do not doubt that you have guaranteed the need to dedicate more interest beyond the work of leading work and searching for technological innovation in the appropriate space. As a result, I think this is of course the questions coming.

John: Again, if you want to make use of this awareness, it's a very kind question. Actually, I think about this and have some things that can be presented to the public.

The first is to draw a strategic or innovative map. Here, the VIIMA Board and other conclusions have a chance to freeze with a remarkable tool to visualize your innovation and strategy. You have it and ask a powerful question: Where do you want to invest in your portfolio? This is usually either:

universe

Areas where you can see the rise of the market you are growing without driving out of space} rivals

{space}

Space｝ A field where your value proposal is quite tight.

That's why you start choosing your skills by looking at your strategic maps and maps of innovation. I'm not there to choose a conclusion, but to choose the fields to be opened and focus on it.

In fact, I think there are five ways to introduce innovation beyond the lead work. These five steps may be useful when choosing innovation opportunities.

The first is to lead care for information technology. They have all the possibilities to freeze on the platform, and they will definitely help you with something else you can understand and serve, as a result.

Getting organizational buy-in

The second is a bit advanced, but it is the fact that the data is related to 1-The data can be reincarnated with the artificial support and consciousness of the mind and mechanical research. This knowledge has the potential to lead to new service methods and customer support.

For example, in the insurance market, you can find fresh products and offers by fully utilizing mental data.

Third, the proposal has all the possibilities that freeze most of the products complemented between the current used cycles, and the margin of the offer is often much higher than the core product.

An excellent example is the iPhone's ecosystem, and application creators receive 30 % of relief. The cost of transferring such a phrase family is quite low. As a result, consider the margin of proposal to the entire used cycle. In fact, I believe people often think about technological innovation for this for this for the acquisition of the original line. As a result, you will see your daily life cycle.

4: Content is a new currency attached to the main sentence. Content is provided by influencers and buyers. Companies have all the opportunities to license and reuse it. There are a wide variety of ways to use content.

I believe that Facebook's current turmoil in Australia is a remarkable example of content power. The news provider wants to charge Facebook a fee for posting their content, and does not want to pay Facebook, but Facebook is the king and provides it. The fact that he noticed that he had to do, he has reached an agreement.

Conclusion

This is because in this case, a great value is achieved, and your company has the opportunity to gain a big wallet share. Finally, let's expand its range and significance with the buyer, considering the meaning of giving it to your own buyers.

Start again with the innovation map and choose your own bet. Next, I talked about five ways to introduce innovation outside the kernel, but I think these are a good way to actually start.

Well, and another thing to remember is not to ask a conclusion, but start with difficulties and skills.

Jesse: This episode is about to end, but before that, is there any more common and useful baggage when listeners start this? For example, what should I do if my organization is not always aggressive in collaboration and has not assigned resources to similar innovation?

Of course. I start being small and actually justify. If there are about 10 employees, it is absolutely possible to innovate to complement the main products.