3 Studies Demonstrate The Value of Innovation and Creativity in Entrepreneurship

What are the requirements for producing an original and creative product? It is not an easy question to answer because business innovators typically spend a lot of time and money bringing their big ideas to market.

Those who are successful can reap fantastic financial and other benefits, and the so-called first mover's advantage is actually real. It implies that a popular product might set the rules for an entirely new industry. Starbucks was the first business to advertise the sale of coffee, eBay was the first online auction site, and Amazon.com was the first major e-commerce company.

What makes eBay and Starbucks different from the hundreds of other businesses that never make it off the ground? Check out some innovations in business, some of which are risky, while others are fun.

3 Studies Demonstrate The Value of Innovation and Creativity in Entrepreneurship

1. Market visualization

In response to the US government's request for synthetic rubber during World War II, General Electric developed an intriguing material called Gupp, which expanded and contracted, unlike synthetic rubber.

General Electric sent samples of the material to researchers and academics worldwide, asking for suggestions on using it because the material was so interesting. Anyone could undoubtedly think of a scientifically sound application for this wonder substance.

Nobody knew, but after the war, an unemployed marketer named Peter Hodgson saw a toy store owner named Ruth Fallgatter to pull out the material and play with it, and they both thought it would make a great toy. Hodgson borrowed some money, paid General Electric $147 for the patent rights and a quantity of the material, and got to work.

He gave Gupp a new, humorous name, had it noticeably wrapped in red eggs, and did put it in a few toy stores and bookstores. Still, no one would buy it until a writer at The New Yorker bought some, played with them, and fell in love with them before writing about them in the magazine's following issue.

Peter Hodgson never had to worry about money again. Over the following three days, he received 250,000 orders for Silly Putty, and when he passed away in 1976, Hodgson had a fortune of $140 million.

The tale's lesson is that when trying to pitch a new product, sometimes nothing beats some good old-fashioned PR.

2. Error-Resistant Versatility

Bette Nesmith Graham was a single mother who worked as a secretary in a bank in the 1950s. Although she wasn’t a good secretary and frequently made mistakes, she was a great artist. She painted holiday decorations on the bank windows each year.

She once made a mistake while painting a holiday scene and immediately covered it up, saying, "I wish I could do the same in printing."

Graham then went to work with some tempera paint to cover up the typos and soon realized that this was a fantastic idea that could lead to a successful business. After work, she worked from home while experimenting with painting.

She worked hard to create the mixture that was eventually named Liquid Paper. The success of Graham's invention took longer than Peter Hodgson's, though. She continued to work at the bank while also producing packages of Liquid Paper in her kitchen, selling 100 bottles each month.

The challenge was that few people understood why they needed it, so work advanced slowly as more people became aware of the product, and it took 18 years after the product's launch before sales of Liquid Paper reached one million dollars a year. It took five more years for sales to reach $25 million a year.

The rest of the story is actually well-known. Mike Nesmith joined The Monkees in the 1960s and later became a film and video producer. Eventually, Graham's fame would surpass that of her son.

Working from home is great, but there are many instances where persistence is the key to success. It is easy to understand why this is the case, and it is frequently necessary to explain to consumers the benefits of an innovative product like Liquid Paper.

3. False Inventions

In the history of bad business decisions, Coca-Cola's choice to use New Coke instead of the Coke name may have been the worst of all because they discovered it was against convention to do so.

The decision was made in the middle of the Pepsi vs. Coca-Cola conflict in the 1980s. A television ad campaign for Pepsi asked viewers to participate in a blind taste test before being told how much better Pepsi tasted.

As a result, Coca-Cola executives began secretly developing new formulas until they created one that, in taste tests, performed better than Pepsi's flavor.  They launched "New Coke" with complete confidence that they had won.

This was possibly the worst new product to be received. They provided plenty of laughs for comedians, consumers boycotted the new product and even began requesting the old one, and Coca-Cola removed New Coke from stores within six months.

What went wrong, then? It was all very unclear, and somehow it wasn't tested on the market or warned people that New Coke didn't mean there was Old Coca-Cola.

The lesson should be obvious: Innovation is great, but it is not sufficient on its own. A truly innovative product must be more than just brand-new; it must also satisfy an unmet consumer need, and Coca-Cola's replacement was not required.

It is difficult to come up with a better alternative. It takes a great idea, flawless execution, and market research. It's not just a matter of chance, but if you put it to use, you can change the world.