When the MIT Technology Review compiled its list of the 50 smartest companies of 2014, they focused on those businesses that had made strides over the course of the previous year, strides that would define their field and that would force competitors to rethink their strategies.
The top three companies on the list are:
- Illumina
- Tesla Motors
According to the MIT Technology Review (Mar/ April 2014 issue),
These businesses are setting the pace of innovation. They’re shaking up markets or creating new ones.
Pretty exciting stuff, right? If MIT ranks these guys top, we want to know why. We want an inside look at what these companies are doing that sets them apart from the rest.
Illumina – advancement through accessibility
Before Illumina, genome sequencing technology was all but unaffordable to the masses. It was a tool for researchers. Thanks to breakthrough technology by the innovative San Diego-based company, this is no longer true. As of January this year, Illumina claims to be able to read a person’s genome for just $1,000. This is a staggering advancement when you consider that in 2003, this would have cost $5,800; in 2008, $10 million and in 2001, just shy of 100,000 million US dollars.
To get where it is today, Illumina had to make big changes. They have gone from selling chips used to examine specific spots on the genome, to selling full genome sequencing machines, analysis services and software to interpret results. While many of Illumina’s advancements would likely not have been possible without their primary acquisition of Solexa in 2005 – a company that made genome sequencing machines – Illumina’s success is apparently not just down to their clever acquisitions. According to Doug Schenkel, a managing director for medical technology equity research at Cowen and Company, Illumina has a track record of improving the technology it buys.
This is a perfect example of a company that has looked for a way to make the unaffordable, affordable and in the process to improve the unaffordable. Given that Illumina has 70% of the market for genome-sequencing machines, it’s hard to argue with their approach.
If you’re sticking with lofty prices and struggling to compete in your market, consider adapting your product, or investing in another, complementary product that will enable more people to buy from you or do business with you. This does not however permit ‘slacking on innovation’. After all, Illumina improves products. Take a leaf from their book and look into the future of your own industry. It’s your vision that will help you stand out in even the most crowded marketplace. What is your vision? What is your company’s vision?
Tesla Motors – in on the inevitable ahead of time
Electric vehicle company Tesla Motors isn’t on this list because of an acquisition. It’s here because it’s run by people that are doing things their
own way and who are creating products that will change the future, products that are already redefining the present in spite of opposition by those who have dirtied their hands in the petrol industry – politicians, dealers, gas stations, suppliers.
Tesla’s survival is down to not trying to play the game by following the traditional rules. They do not outsource the design of their products, not even their batteries or motors or any electronics. They sell cars outright and avoid dealers. They build their own charging stations. They supply clean energy for those charging stations via Solar City, another Elon Musk brainchild. They don’t rely on people waiting for their car to charge, they offer a ’90 second battery switch’. Everything they do breaks the rules that the auto industry and even that other EV companies have played by. Musk and his team are nothing short of genius. Their vision will catapult us into the future, hopefully leaving a dirty, petrol-oriented world behind.
If there is opposition to the products and services you offer via traditional, accepted channels, do what Tesla has done. Play by your own rules. Innovate. Create your own products. Do things your own way.
Google – planning for the future by branching out
If the MIT Technology Review is anything to go by, the only reason Google is on the list is thanks to Nest, a company that Google acquired for $3.2billion in January this year. In case you haven’t heard, Nest turned home thermostats and smoke alarms into veritable iPads. That is, the company made them look sexy, minimal and modern. The design and marketing is perhaps not so surprising given that the co-founders are ex-Apple employees that helped build and design the iPod and the iPhone.
According to the MIT Technology Review, Google’s problem prior to the Nest purchase was that their strengths lay elsewhere, in building, giving away and improving software over time, with little thought given to advertising and marketing. Whereas ‘selling stuff’ requires persuading customers that the product is finished and perfect in every way! Will the Nest purchase and the 100 or so ex-Apple employees hired by Nest transform Google into a commodity powerhouse?
If we’re going to learn anything about why Google got put on the ‘Smartest Companies list’, it’s because they’ve got a few more irons in the fire. We’re not just talking Nest here, we’re talking about their other recent acquisitions: Motorola Mobility (2012), Buffer Box (2012), Makani Power (2013) and Boston Dynamics (2013).
While Ads do still account for 85% of their annual revenue (based on last year’s figures), we’re looking to a future in which Google might seriously begin making innovative products.
The point is: don’t get stuck in your niche. Yes, you may be good at something – seriously good at it – but if you’re not thinking about the future, if you’re not thinking about the fact that one day someone else will come along and do what you do best even better, you’re setting yourself up for distant failure. Make sure you do what you do well, but make sure you’ve also got your eye on other targets.
Summary
Those who do not want to imitate anything, produce nothing – Salvador Dali
Setting out to make your mark and to make your business stand out from the rest, is about looking to the future, innovating and doing the things that no one else dares do. If you have to acquire, copy and steal, so be it. This is life. If you can afford an acquisition or two on the path toward achieving your mission, great. This will help speed it up but only if your purchases are in line with your vision. Illumina, Tesla and Google simply represent examples of companies that are innovating, branching out, looking to the future. But they are also examples of companies that have taken ideas from others and built on them. Originality is only your ability to link different ideas together to make something that works.
