I love getting tips from other entrepreneurs on how to build disruptive businesses. One of my favorite interviews was my interview with Peter Rahal on how he bootstrapped his protein bar company, RXBar to a $600 million acquisition.
However, we don’t get much information from innovative executives of companies who have a unique vantage point/insight into startups, because they can potentially utilize or acquire technology from startups for their own company.
I sat down with Sanjeev Addala, Chief Digital officer of GE Renewable Energy and we talked about the future of digital innovation and how entrepreneurs can create disruptive companies in 2018.
A big part of Sanjeev’s job is to ensure GE Renewable Energy is setting the long-term digital and innovation strategy. From IoT enabled wind farms to how to connect renewables with next-generation electrical grids, to the future of energy, Sanjeev has a pulse on what it takes to build something great in 2018 and in the near future.
Here are three things I heard from Sanjeev on how to think like a disruptor in 2018.
1. Focus on every customer touchpoint.
“Some of the most disruptive startups and companies I’ve come across are not just because the product itself is innovative, but the company utilized digital and analytics to create a seamless customer experience at every touchpoint for the consumer and innovated their journeys,” says Addala
Toys R Us didn’t close multiple stores because their toys were bad quality or they were more expensive than competitors. That’s the farthest from the truth.
The reality is that Toys R Us never focused on the customer experience. The app was barely usable; there were no ways to rent or borrow toys and also no place to throw a birthday party.
Toys R’ Us made the mistake of thinking they were in the toy business. They’re in the kid’s fun business. To Addala’s point, it’s not just about the product. It’s about the experience.
Entrepreneurs who are building brands should start with a customer journey map and document how every touchpoint your customer has with your brand.
2. Disrupt yourself. Take a short-term loss if you believe your investment will pay off in the long-term.
“If you’re comfortable with what you’re working on, chances are, it isn’t innovative enough and may not work in the future. You sometimes have to embrace potential risks to your current revenue stream for the sake of the long-term prospects and longevity,” says Addala.
“A ‘disrupt yourself’ mindset is critical for success, before someone else does it to you. This is true for enterprise companies and even one person startups.”
As an entrepreneur, I had several opportunities to pivot the services I provided that would guarantee I would make more money in the short term, but I made the conscious choice of declining those offers because I knew that I needed to build a strong foundation for long-term revenue growth.
Uber and Facebook are also great examples of this quote in action.
Facebook de-prioritized “viral pages” and then lost a significant portion of their ad revenue and stock price almost immediately. Mark Zuckerberg is sacrificing the short term for the long term.
Uber is also making a large investment in driverless cars which is a recognition that their current system of on-demand employees, will soon be a thing of the past. They are making investments even though they know it will eventually cannibalize their primary revenue stream.
Just because you’re making money now, doesn’t mean the money will always be there. Startups have an opportunity to disrupt larger companies who aren’t taking risks with their revenue streams.
3. Provide value to the community
When I took coffee meetings to build my network in Chicago, the first thing I noticed is that there were a lot of representatives from bigger companies who were interested in what’s happening in the community. If you’re an entrepreneur, use this chance to network with people that can give you insights from a different perspective and may even be a contact that can acquire your company in the future.
“I think there are some great companies working on some amazing things. I like to meet and advise founders who are building next-generation technology,” says Addala. Even if my company can’t utilize the tech, it is great to hear the perspective of founders and investors on how they see their companies changing the landscape and the world.”
Sanjeev closed our conversation with a great quote that resonated with me: “Never be comfortable. You should always be learning and looking for breakthrough ideas. Just because you’re on top, it doesn’t mean you’ll always be there. The entrepreneurs who focus on what technology can do for their community will always be ahead of the game. Help the community first and they’ll help you back.”