May 12 2010
May 12 2010
The way good ideas come to life is changing in light of a rising tide of successful “lean start-ups,” angel investors, and social product development sites. Traditionally, innovators have sought out venture capitalists who after a lengthy green-lighting and due diligence process provide access to large sums of money (often with investment minimums in the millions) along with industry, financial and legal guidance. And, in exchange venture capitalists often demand board seats and impose complex deal terms.
But modern start-ups are bucking the traditional VC model. A new wave of successful start-ups, including the likes of Facebook and FourSquare, are following the lean start-up model coined by Eric Ries and Steven Blanc. These companies launch with little investment (Facebook started with well under $1 million), small teams, and a minimum viable product to test market response before additional investment and expansion. They don’t need millions to launch, nor do they need a board of directors. So, they rely on a new funding source, the angel investor, rather than venture capitalists.
Angel investors like Ron Conway, Dave McClure and Mike Maples Jr. are wealthy, well-connected investors without the constraints of VC firms. They don’t mandate complex terms or board seats, they are willing to invest relatively small amounts (tens of thousands instead of millions), and they are quick to make investment decisions (essential for making sure an idea does not get “out-scooped” or become irrelevant). On the downside, they typically do not provide the comprehensive business development guidance a VC firm does.
There is a second alternative to venture capital funding for lean start-ups, the social angel, otherwise known as social product development sites. Open source websites like Quirky.com, Kickstarter.com, Idealist.org, and Innocentive.com are bridging the gap between the angel investor and the venture capitalist. They cultivate innovative businesses by providing both funding and guidance. They are intermediaries between innovators and consumers designed to ensure that no good idea will be left behind due to distance, economic circumstance, or executional know-how.
As an example, the Split Stick is an idea submitted by Marc Julian Zech, an advertising copywriter in Hamburg, Germany for a double-sided mini hardrive (a single USB plug with personal data on one side and work data on the other). Zech submitted his idea for a $99 fee to Quirky.com, and within weeks, the Split Stick had a name, final design and a manufacturing launch thanks to the help of Quirky members.
As these social product development sites mature and gain traction, there is an opportunity for venture capitalists to show they too can be nimble and adapt to the times. Perhaps they can partner with some of the social product development sites to add valuable business guidance and capital. While this may be a departure from their current way of doing business, it’s markedly better than obsolescence in the increasingly successful lean start-up market.
April 29 2010
Expanding existing brands into new business areas that create new customer experiences provides strong financial incentives and an opportunity to strengthen the brand. LVMH’s Cheval Blanc venture is a testament to this. LVMH Moet Hennessy Louis Vuitton recently announced that it plans to develop more resorts named after its Bordeaux winery based on the success of the first Cheval Blanc location in Courchevel, France. The move signals that LVMH is looking to grow without making pricey brand acquisitions in the notoriously saturated and costly-to-enter luxury goods market.
A few of LVMH’s competitors have ventured into the hospitality arena in recent years. Buglari has two resorts, in Milan and Bali, and Giorgio Armani recently opened a hotel in Dubai. What makes Cheval Blanc so unique is its ability to create a new experience and push its retail products in one package that leaves room for choice and expression. You can get a facial at the Givenchy Spa, purchase new Louis Vuitton shoes and a Dior dress to wear to dinner that night at Le 1947 Restaurant. Cheval Blanc offers luxury and convenience without making you feel like you’re in one big outlet.
In contrast, at the Armani hotel in Dubai everything is one style, Armani. There’s the Armani Fiori flowershop, the Armani Dolci chocolate and sweets store, and the Armani Privé nightclub. In fairness, Armani does not have a holding company like LVMH, which enables a “house of brands” approach. But, LVMH’s two key competitors, PPR and Richemont, both house a variety of luxury brands. They could and ought to follow on the success of Cheval Blanc and create new experiences that add dimension and revenue to their brands.
February 18 2010
An all in one soccer ball, portable generator, community builder and global health tool, sOcket is a “shining example” of functional innovation and design. Developed by Harvard University students, this soccer ball turns energy from a kick into electricity, which is then used to charge lights, cell phones and batteries. For example, for every 15 minutes of play, sOcket can store enough energy to power a LED light for 3 hours. In a world where over 1.5 billion people live in areas with no access to electricity, the sport of soccer, with its global appeal, is a perfect partner.
January 13 2010
Fearful cries about the ‘death-of-print’ have been all the rage this year. 2009 saw many magazine closures and newspapers worried about the shift to digital. This shock to the industry has caused print-based companies to quickly innovate, often relying on their old friend: The Designer.
In a TED talk (below), Polish designer Jacek Utko explains his dramatic redesign for several Eastern European newspapers. The result? Readership went up by as much as 100%.
Though the following project didn’t see the light of day, Information Architects explain their thoughtful concept to revolutionize newspaper design. How? By taking all the learning from websites and translating it back to print.
*Note the blue highlighted keywords that allow you to read the entire front page in just 20 seconds.
