Steve Jobs and the True Meaning of Innovation
Steve Jobs died on Wednesday. He was an icon of our age, the true embodiment of the word entrepreneur.
Watching TV after the announcement of his death there were many words attached to Jobs: visionary, disrupter, legend, creative genius, revolutionary. But perhaps the word most often used was "innovator." Steve Case, an extraordinary entrepreneur himself and founder of AOL, tweeted that Jobs was "the most innovative entrepreneur of our generation." President Barack Obama said he "was among the greatest of American innovators."
Are small businesses innovative?
All this made me revisit the somewhat controversial piece on Slate.com. The point of the article was that small businesses are largely not innovative. Based on their research, Erik Hurst and Benjamin Wild Pugsley of the University of Chicago issued a paper "What Do Small Businesses Do?" concluding, "Few small businesses intend to bring a new idea to market. Instead, most intend to provide an existing service to an existing customer base."
This was hardly news to me. I must have missed the decree declaring all small businesses innovative and entrepreneurial. Entrepreneurs and small business owners are not synonymous terms. While obviously anyone who owns a small business (the study included businesses with up to 100 employees, though most had fewer than 20) is a small business owner, only a small percentage of those folks qualify as entrepreneurs.
Most small business owners, or "common village professionals" as Slate's Annie Lowery dubs them, don't have entrepreneurial aspirations. They're looking for a way to make a living or replace income after losing their jobs. Maybe they're immigrants who might have a hard time finding a corporate job. As I've mentioned, I grew up in that world; my dad, uncles and grandfathers all were small business owners.
Small businesses and innovation
My struggle with the study is the way Hurst and Pugsley define innovation. They're concerned that most small businesses don't spend money on research and development, and don't file for a trademark or patent. Instead, they lament, business owners are entering a marketplace already crowded with similar ideas. Innovators to them are ONLY the business owners seeking venture capital funding -- and only those, they argue, are the companies and business owners who should be rewarded with tax breaks.
This myopic view is held by far too many people. Somehow they've decided all innovation is technological in nature (those are the companies who get the bulk of VC attention). So if a VC decides you're unworthy, your business is by definition stagnant and me-too.
What a crock.
That scenario leaves no room for reinvention, for creating a bigger or better wheel. For refining manufacturing processes and distribution. For improving customer service, or marketing.
Innovation doesn't require a brand-new idea
Innovation does not equate to starting from scratch. There are countless entrepreneurs, legendary ones even, who looked at that crowded marketplace and decided to recreate an ordinary business. Tom Monaghan (Domino's) or Frank Carney (Pizza Hut) did not invent pizza. Ray Kroc (McDonald's) didn't sell the first fast-food hamburger. Leslie Wexner (The Limited) was hardly the first person to sell clothes to young women (his immigrant parents, in fact, operated a women's clothing store). There were plenty of places to buy coffee before Howard Schultz (Starbucks) came along. Entrepreneurs and small business owners usually start the same way: with one small operation.
I don't know of a formula that can, at the beginning, distinguish between those that will stay small and those that will grow big. But I do know the differentiator is NOT whether they ask a VC for money.
Empires are built because entrepreneurs can look at something as mundane as a cup of coffee or a hardware store and see something else. Several years ago Steve Jobs told technology writer Walt Mossberg that he saw Apple, not as a computer company, but rather as a digital products company.
Steve Jobs was a creator. And he was also a genius at reinvention. Among other things, he proved that reinvention is not any less innovative than creation. You could argue, in fact, that it's even harder to take the ordinary and turn it into something extraordinary. But that's what entrepreneurs do, every day.
More articles from AllBusiness.com:
- Is Your Perfectionism Holding You Back in Business? Here’s How to Overcome It
- Can Franchising and Innovation Go Hand in Hand?
- Launching a Startup? 7 Keys to Making It Past the First Year
- 5 Ways to Encourage Innovation in the Workplace
- 10 Tips for Bridging the Gap Between Early Adopters and the Mainstream Market
