THE MOST SUCCESSFUL INNOVATORS IDENTIFY CONSUMER TRENDS BEFORE THEY HAPPEN—OR DISRUPT EXISTING TRENDS AND CAPITALIZE ON OPPORTUNITIES BETTER THAN THEIR COMPETITORS
empowers innovation and encourages team members to create, lead, test, fail, and start anew. Innovators also replace themselves by introducing next-generation products before competitors’ step in to fill a void. Apple’s evolution of the iPhone and iPad is the preeminent example of this strategy. One of our recent clients is emblematic of a strategy to be first, better, or different. In this case, they successfully achieved all three. We represented a highly innovative company called Blue Microphones in its sale to global consumer electronics leader Logitech International (NASDAQ: LOGI) in 2018, after having previously sold Blue to a private equity firm in 2013. Since its inception, Blue has engendered a unique culture of creativity and innovation in an industry in which the underlying technology dates back to the 1600s. Blue’s founder and subsequent leadership led with innovation; all products had unique form factors and sonic signatures and enabled new-use cases. Blue products also featured distinctive names such as the Bottle and Spark, Yeti and Snowball, which were an extreme departure from the traditionally staid microphone industry, where the best-selling microphone is the SM58. With an unconventional approach, Blue immediately distinguished itself in a competitive industry and took this a step further when it debuted the first USBconnected digital microphones. Its products spoke to the internet generation in a new way due to its design-forward yet retro brand signature backed by brand credibility, having supplied its products to platinum-selling artists and music producers who work with international musical icons such as Sting, Coldplay, Bob Dylan, and Justin Bieber. Content creators quickly adopted Blue’s products for use with Skype, podcasting, and home recordings, a trend that Blue identified early on and enabled with a suite of affordable microphones targeting next-generation content creators. Fast forward, and Blue is now the ubiquitous tool for digital content creation, having built a broad suite of products to address nearly every consumer recording application. The company’s differentiated culture, consistently executed over two decades, enabled Blue to garner a premium valuation in a sale to Logitech.
EMAIL email@example.com firstname.lastname@example.org WEBSITE intrepidib.com ADDRESS 11755 Wilshire Blvd. 22nd Floor Los Angeles, CA 90025
Technologies of Westlake Village, Calif., identified this need and embarked on a journey to revolutionize the tabletop industry by incorporating thermal technology into dishware. This spawned Ember, a company that ranked high on the Forbes most innovative list due to its ability to constantly innovate. Ember’s first product, the Ember Travel Mug, launched nationally in Starbucks in 2016 and sold out in several days. Ember’s second product, the Ember Ceramic Mug, launched in 2017 and sold more than 100,000 units in the first six weeks, earning it the distinction as one of Time Magazine’s 25 Best Inventions of the Year. At the same time, Alexander and Ember were conceptualizing new ways to leverage Ember’s intellectual property. Within 12 months, Ember was not only a consumer brand but had also developed products for hospitality and healthcare. Not every company can move this quickly. Ember’s core DNA mirrors Alexander’s philosophy: “Nothing is impossible. There are limits to innovation. Every idea is worth exploring. Move quickly, or the company will pass you by.” Importantly, Ember successfully built its team to support this vision, attracting professionals who thrive in a fast-paced, ever-changing environment. This alignment of team and vision is critical to maintain an innovation culture successfully.
CSA - Freedman
Solve a Problem Before It Exists
Have you ever thought that you wanted your dishware to have self-contained heating elements to keep your food and drinks warm or cold? Innovator Clay Alexander, CEO of Ember
CSQ Q1 2019
Position Your Business as a Target
For even the most prolific innovators, strategic acquisitions can act as an outsourced R&D function to bolster internal capabilities. Technology heavyweights such as Amazon, Google, Facebook, and Apple acquire dozens of companies each year, paying hefty premiums to acquire revolutionary technologies or innovative companies. Amazon acquired Ring for reportedly north of $1B in 2018; Google acquired Nest and Dropcam for a combined $3.8B; and we saw Facebook become a leading innovator in augmented reality overnight through the acquisition of augmented-reality headset maker Oculus for more than $2B in 2017. Each of these targets shared the attribute of being first, better, or different in a niche category that eventually fell within the sights of a large acquirer. How do you, the business owner, apply these cases to your own business? Does your company culture support innovation? Is your organization and leadership aligned with your vision? What changes would enhance the value of your company? Building an innovative culture is an important starting point for any company. end
Q1 2019 | Innovation & Technology