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Some of the most recent successful business ideas have come from simply being willing to embrace change and disruption.
Take Uber and Sendle. The innovators behind these companies injected some much-needed dynamism and innovation into two outdated business models – the taxi industry and small business parcel delivery. In doing so, they created businesses that finally gave customers what they’d never had in those industries – a competitive choice.
Then there are businesses that refuse to embrace change because “that’s the way we’ve always done things”. Sadly, it’s only a matter of time before they get left behind.
Here we talk to entrepreneurial strategist Paul Broadfoot about how small business can be open to change and the warning signs that they’re getting stuck in a rut. We also get some insights from successful disruptors Nick Lavidge, the CEO of digital marketing firm Alley, and James Chin Moody, co-founder and CEO of Sendle.
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Broadfoot says that small businesses may have the edge over larger companies to successfully disrupt an industry – they just need to be open to it.
“If we use the metaphor of a speedboat (startup or small business) and a battleship (large organisation) – the small company is more nimble, highly manoeuvrable and faster,” he says.
“A battleship has more equipment, resources, firepower but takes longer and requires more sustained power and energy [to change course]. So smaller companies are far easier to adapt to change but are often looking for it less and can be less open to it.”
Changes in customers’ buying behaviour is one sign that innovation is needed, Alley founder Lavidge says.
“Industries change rapidly and therefore businesses need to be fluid in their operations, product offerings and marketing,” he says.
“If you notice something isn’t working as easy as it did in the past then it’s probably a warning sign that you’re falling behind and need to re-evaluate that part of your business model.”
As digital technology is starting to infuse into every aspect of business, Moody says that at a minimum, every operation needs an online presence.
“A question for many small businesses that may not yet be online is this: what is the digital version of what you do? Because you can bet that someone is trying to work that out right now,” he says.
While embracing change and innovation can be daunting, disruption doesn’t have to be earth shattering; small changes can have a massive impact.
“Uber is a great example of how easy disruption can be,” Broadfoot says. “It’s a simple idea – they just changed the business model of an industry. They didn’t have to invent the technology of a location-based app, they just used new technology to facilitate a change in booking a ride.
“They also tapped into an asset they didn’t own; the personal car. All that was more about the idea than it was about invention.”
Moody says having a great team driving your business is more important than a great product or service.
“Sendle’s purpose is to help small business thrive by making parcel delivery simple reliable and affordable,” he says.
“[But] you also need to create a culture that values feedback, where people can enjoy working together, and where you can get the best work done of your career.
“I once heard something very wise: ‘To have a successful startup you need three things – a great market, a great team and a great product. But if you had to sacrifice one of them, sacrifice product.’ A great team in a great market will work the product out.”
Sometimes you can be too far ahead of the curve and your customers aren’t ready for your innovative product, Lavidge says.
“Disrupting is risky because there is very little proven success before you. You’re working off a hypothesis and the chances of it are failing are much higher than a proven model.
“Therefore, limit your failures by being quick to fail and investing in minimal viable products to find market fit.”
Moody says that successful disruption happens when you can do something better, and cheaper, than your competitors.
“For Sendle, we saw that there was a lack of choice for small businesses wishing to send parcels simply, reliably and affordably,” he says.
“Effectively our main competitor, Australia Post, had a functional monopoly over this market, and we found that we could use cutting edge technology to build a service that could do better prices than lining up at the post office, but for door-to-door delivery.
“This not only saves our customers money, but also time. Better AND cheaper.”
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