Role of Innovation in Growth and Market Leadership | Greg Coticchia

Great companies say, oh, we've got this huge cash cow. They don't say, oh, how are we going to protect it? How are we going to defend it? They look at it and say, what's next? And what's going to, you know, someone's going to attack this and beat this. Let's beat it ourselves. Right? That's what great companies do.

Why is innovation so critical for businesses?

If you want the company to succeed and you want it to grow and thrive for the shareholders, for the employees, You have got to bet on innovation. It's got to be your number one priority.

What is the good time to start thinking about building the next product?

They killed the product that created and saved the company. Now that takes real, I won't say it on this family-friendly podcast, but that takes guts. How about I'll say it that way. But that's what makes trillion-dollar valuations. It is exhilarating. It's almost like a drug. When you can take a product and solve a problem and have an award-winning product that makes a difference and is used by companies or people around the globe, it's about as satisfying as it gets, but it's really hard to do.

Hello everyone. Welcome back to the Vit Lotion Podcast. Today's guest is Greg Coticchia. He's a 6-time CEO, 2-time COO, 4-times founder, and a product leader. He has decades of experience founding and leading technology organizations and driving profit to his companies. So yeah, nice to have you here, Greg.

Vid, thank you for having me on, and I appreciate the kind introduction.

Yeah, yeah, sure. So today I invited you to talk about the importance of innovation and developing new products for growth and for competitive advantage and things like that. So, um, but before we jump into the topics, um, if you could tell a little bit about your background and the work that you do now.

Sure. So as Vitt said, my name is Greg Coticchia. I like to think of myself as a product guy, a product leader. And I have had the good fortune of being in the product business, mainly in B2B software for the majority of my life as a technology business leader and entrepreneur. Very early on, I am an industrial engineer, or as my father kindly called it, an imaginary engineer. And I went from being an engineer to immediately going into sales. And my mother only cried for about 6 months, but she got over it. And I enjoyed selling because I really was problem-solving as well as being an engineer. But that problem-solving eventually led me to wanting to be a product manager and owning the what of the, as I like to say, the what of the product. You know, what is the product going to do? Not necessarily how it's built. Or how it's architected, et cetera. And I went to school, got my MBA, and the first company that would hire a guy with an engineering degree and sales experience was a startup. And way back when dinosaurs roamed the earth, startups weren't as exciting as they are today. You told people you were an entrepreneur working in a startup when you were out of work. And, but I soon fell in love with the idea of not only creating new products, but innovating new spaces through creating new businesses. And so, the first half of my career, Vit, was all around launching new products. And I've been very fortunate to be literally involved with hundreds of new products, whether they were built from scratch, the story of, you know, coming up with an idea in a garage or in the second bedroom of a townhouse and figuring out what to build and testing those ideas and launching many of those products successfully. And the second half of my career is really about what has been really about leading companies. And I like to think of companies as products themselves. In essence, I know there's a lot of religious issues about is the product manager the CEO of the product. And while there are significant differences, There's a lot more similarities, I think, than people think. And I always treated the products that I led, the companies I led, as I would a product management person. I recently left a company called Sophion that was in the innovation and new product development space. So I got to actually work providing software and services in the space that I've been involved with as a professional all my life. So that was very satisfying. And now, I am with CEO Coaching as well as SE Healthcare. So, I help coach other CEOs. And importantly, I'm helping innovate a new space in healthcare by helping reduce burnout and stress for nurses and physicians. So, it's been a great career. I've had a lot of fun and there's more fun to come.

Yeah, yeah, that's great. Yeah, you have an interesting story going and building all these products throughout your career. That's great. So why don't we start with the topic of innovations and just in general, why is innovation so critical for businesses?

Well, you know, if you take a look at and talk to any CEO and you say, what's your number one challenge? At the end of the day, they're really talking about growth and growth means innovation. There's, literally stories upon stories that we can revel in about CEOs and leaders of companies who failed to see the changes in their business, failed to adapt, and didn't grow. And many of those, whether it's the famous story of Kodak inventing the digital camera and failing to be involved with that, or Blockbuster failing to see people moving to streaming. And we all know many of these types of classic stories. They happen every day. There was a recent survey of business leaders and they asked, "How many do you think of your current business model and set of products will still be around in 10 years?" And over 90% of them said, "No, none of our products in our current business model." If you look at the great businesses, as has been written about, they are really not dedicated to a product. You look at businesses like IBM, its business of what it provides has changed radically, although they've been in and around the technology business. But, you know, going from providing cash registers to mainframe computers to technology services to, you know, whatever, it has changed many, many times. The company survived, but it's not just been— and if it was still selling cash registers, I would guarantee you it would be out of business, right? And so, they've been able to adapt and change, and that is innovation at its core. You've got to be an innovator if you want to continue to grow and you want to survive. And in any of the businesses that I've worked at, you've got to put the business, you put the company first. And if you want the company to succeed and you want it to grow and thrive for the shareholders, for the employees, You have got to bet on innovation. It's got to be your number one priority.

Yeah. So innovation equals growth. That makes sense. And, uh, there are some stories about, like, for example, you mentioned Blockbuster. Um, Netflix started around the same time, right? But they, they got attached to this problem of solving for people to provide their entertainment, provide their movies. So it doesn't matter whether they were mailing discs or now it's streaming, still the same thing. They provide value to users, but they innovated a lot of times, a lot of things. That makes sense.

Yeah. The story is that the founder of Netflix, Reed Hastings, turned in his Blockbuster rentals late and he got hit with those classic late fees for those of us old enough to remember those. And he was very angry about that. And he said, I'm going to go solve this problem. There shouldn't be late fees on my VHS tapes. And that started— and people don't realize, by the way, the great companies, as I mentioned, people like IBM, I mean, we think about Netflix today. We often forget that they started by mailing DVDs, right? I mean, so you used to go online and get your DVD in the mail. They innovated. They killed what actually made them successful. So, great companies say, "Oh, we've got this huge cash cow." They don't say, "Oh, how are we going to protect it? How are we going to defend it?" They look at it and say, "What's next? And what's going to— someone's going to attack this and beat this. Let's beat it ourselves." That's what great companies do. The ones that are afraid, that are risk-averse, that don't want to change, they hold on to it and say, "Oh, we got to protect it. People are going to love DVDs in the future. They want to get all their stuff in the mail." And it's like, yeah, that's the, that's the key to going out of business if you'd like that.

Yeah, they would have survived for maybe a couple more years and that's it. So yeah, that's great. So then not all leaders probably know, or at least understand this. We have these examples of failing companies. How leaders can foster this culture of innovation? Um, maybe, yeah, any ideas on that?

Yeah. So, first of all, it starts with understanding that even if you have a very crisp, successful, people-in-the-right-seats type of business, it involves risk and there will be failure. And you can't penalize those who try and fail, right? That's the worst part. You've got to celebrate those failures. Most importantly, you got to learn from those failures. The third part I would say about that is you've got to fail so that it's not fatal to the business. And I think that's what people are really mostly worried about is, is this going to be such a distraction to our existing business? Is this going to be siphon off resources that we need for our core business that if it also fails, then my other business fails too? Now, sometimes that association is made irrationally, but I think that's right. You've got to cordon it off and you've got to give it, and you've got to allow that it can succeed or fail. The other thing you've got to do, so recognizing and rewarding and learning from that, all really, really important in creating that safe environment where failure is okay. Right? You've got to also encourage the type of communication and idea sharing across various levels. You never know where where someone's gonna, and by the way, I really don't like this whole idea of like, you know, getting the next best idea. It's really not about getting a great idea. It's about recognizing a really severe problem, right? Because great products start with a problem that is painful for a business or an individual or whatever, right? And so recognizing that problem and then saying how we can solve it That part of the idea, that's beautiful. And you've got to encourage that in your organization. Famously, Google offers a percentage of their time to everyone on their team to work on things. That's where things like Gmail came along, etc. And so, they created a culture that was deliberate, that welcomed new ideas, that challenged the status quo. They didn't say, "Oh, we're not in the email business. We're in the search business." They define themselves as a company that provides technology. And so that's a different thought process. And so recognizing, rewarding it. The last part I would tell you is don't starve the resources to invest in new R&D or new ideas. You know, you can't do it with saying, oh, well, we're gonna have, you know, 50 developers on our core product, but we're gonna give you 2 to develop that new product and no marketing resources. But if you get some customers in the first 3 months, let us know, we may give you a little bit more. You got to resource it. You want to take a bet? You go to the carnival, you go to the circus, you got to place the bet, right? And you got to be willing to put the resources behind it too. So, be deliberate, be supportive, be intentional, right? Those are really important parts of creating an environment where people feel like I can contribute and I can help the company grow.

Yeah. Yeah. Those are good. And I, I guess after the Google's example, many companies started doing this idea of take Friday and do this. I just had somebody on a, on a podcast recently. They said LinkedIn is doing the same thing. They give some days a month to developers to, for innovation or whatever, to do whatever their R&D they want to do. So that's—

Years ago, there was a Years ago, there was a mainframe software company, BMC Software, they're still around. And one of the great things they used to do is they incentivized people, particularly their software developers, that if you came up with a new product that they wanted to actually resource and commercialize, that the developer would get a royalty off of it, just like if they had done an acquisition. Well, you should see the level of new products that came out of that as a result. So here they institutionalized an incentive system that was only done for acquisitions, right? Someone would get a royalty stream or something from the thing and they internalized it so they could create more new products and create a little bit of competition, ego, reward system, et cetera, internally. I always thought that was just a brilliant idea.

Yeah. Yeah. I was just thinking that maybe those companies that fail, the leaders are too much into bureaucracy and too much about protecting their little corner over there and, and not trying to be, um, like creating this new culture, you know, uh, or new incentive program, I guess is a better way to say that. Yeah.

Yeah.

So, uh, are there any sort of, uh, metrics that we can, uh, set up to try to measure how successful innovations are or things like that?

There, there, there is a lot of metrics. I would say, you know, certainly the most traditional one is how much you spend on R&D. Now, that may be for a larger corporation, or people do measure how much new products or services are contributing to your overall revenue, your ARR, however your top-line revenue is. And that is a good metric of saying, hey, are we aging as a company? Is the majority of our revenue coming from one product that's 20 years old, or are we starting to diversify? I mean, You wouldn't go and bet all your life savings on one stock, right? You may get lucky, right, Eric? So, that's why we have portfolios, right? And similarly, there are very few $100 million in my business software products. So, you better have a portfolio of software products where you place bets and a percentage of those you have to see every year, how are they growing? And are we placing our bets and are we growing our business? So the growth model has to work that way. And you have to start seeing how that's done. You know, other things are important too. Do you have a model that you have metrics where you're trying things and you're killing things along the way too? Or do you have a process where you bring in the ideas, you vet those ideas, you kill some ideas, some more move on, some more move on, and then, and finally you get some that go all the way through to commercialization. Is that process owned and run in your business? And from an efficiency perspective, what's the time to marketplace? So that's another really good metric to look at. You know, are we getting time to marketplace for those? But in general, I think contribution by new products and services, percentage investment spent on that, whether it's time-based or whatever your currency is, those types of metrics are going to tell you whether or not you're dedicating enough to new products and innovation.

Yeah, yeah, that makes sense. And then another question around innovation is many times companies already have something, they need to keep the lights on. How do you balance between this? Like we just talked about, you're going to give people 2 hours per week for innovation. That's probably not enough. Like, how do you prioritize this?

Yeah, you know, there's a lot in that question to unpack, man. And you know what, I look at it not so much as to the latter part of your commentary about how you make people prioritize it, but I will tell you that it is human nature that when you finally get a product to success and it has revenue and it has customers, that's such a hard thing to do. People don't realize how challenging it is to get there and how rewarding it is. That once the machine starts going, you're making money, that people tend to go from being on the offense and risk-taking to all of a sudden being on the defense and trying to figure out how to protect it, right? And even internally, I call it the second product problem. When that second product comes along, people get real touchy about, well, are those resources going to the new product? And isn't that new product driving revenue yet? And why doesn't it have more customers? So, any of the mistakes made by the new product, they forget all the mistakes they made while they were building the first product, right? And the second product, they attack, attack, attack because they look at it as a threat to what they've built in their business. And that's just a terrible thing. And inevitably, what will happen is the old guard will wear away at the new guard, particularly if the old guard business starts slowing down. That's when you find it's like immediately we go to the second and third product and say, "Get rid of all those. We got to protect the crown jewel." Meanwhile, the crown jewel is dying. And what you should be doing is betting on those new horses because they're the future of the company. And all you're doing is holding on to a dwindling asset that's going nowhere, right? And so you're going to shrink, shrink. You know, Ernest Hemingway wrote in one of his books, one of his characters asked another one, you know, how did you go out of business? And he said, slowly, then suddenly. And that's what happens. That's what happens when you stay holding on to dear life with the one product that built your business. And you see it over and over and over again. But some of it's just human nature. And so, you've got to have strong leadership that's patient, that actually invests. New products don't come out the door making money. Most products come out the door not making money. People forget that products like the iPhone, great fan for everything like that. It was not the immediate market leader day one. It took almost 4 years, 4 years for it to, you know. And so, and products take time to get product market fit. And so, it's very easy when you have an operating business that's generating revenue and getting customers and you try something new to say, oh, 6 months into this, oh, it's not, we're not going anywhere. Forget about it. You know, we tried that, it failed. Well, unless you're in the consulting business where, you know, you're providing a service, you know, the product business works a little bit differently. Product business, you got to build something, the money goes in, and it takes, you know, typically even in B2B enterprise software products, it may take 3 years if it's a good product, if it's a success product for it to start to be cash flow positive. Well, some people don't have that patience or they forget what took them to the dance.

Yeah, so a little bit to follow up with this, what is the good time to start thinking about building the next product? Because you may, like you said, everything will die out. Like how to catch that moment?

Yeah, yeah, I don't, you can't start too soon. And this is why companies got very good at acquisitions because they were lousy at internally developing products and they didn't take the risk. And it all had to do with culture. Internally, they couldn't get there. So they said, well, we'll let somebody else build it, figure out the product market, get the things, and let them take the risk. It'll be cheaper for us to buy them than it will be for us to do it internally, which is totally demotivating to the existing internal team and company. It's like, we could have built this thing ourselves, and they went out and paid whatever for this product. But that's part of our culture. When is the right time? You got to cordon it off and start today. I'll give you a bet. We just talked about Apple and I know everyone loves to talk about Steve Jobs and Apple and not that they do everything perfect or everything right. But again, another example of attacking what got you there. Can you imagine Steve Jobs acquired by his old company when he was working? He was with NeXT at the time. He had been booted out of Apple. He gets acquired by Apple. It gets put in. He tries to right the ship through skinning it down. And they bring out this thing called iTunes and the iPhone. Or the iTunes and the iPod, right? The iPod first. So, the iPod literally is a product that saves the company. If it wasn't for the iPod, Apple wouldn't be here today. They killed that product. They killed that product with the iPhone. And they could have milked that thing for another— Is there a category called MP3 players anymore? No, doesn't exist, right? But they— and by the way, what's even more stunning is the iPhone has nothing other than music playing and streaming of music in common with the iPod, right? They didn't use that. If people remember, there was that famous wheel on the iPod, right? And I mean, that was the thing. You notice there's no wheel on your iPhone. So, they didn't use anything they learned from that. They created it from scratch. They went and created another category and they killed the product just like Netflix killed the DVD mail. They killed the product that created and saved the company. Now, that takes real— I won't say it on this family-friendly podcast, but that takes guts. How about I'll say it that way? But that's what makes trillion-dollar valuations. That's what builds valuations. That's the kind of innovation and new product development. They didn't wait for somebody else to attack them. They attacked themselves and they rode that horse. And so you can't start that, you know, you can't wait till somebody attacks you and they're making progress. You know, the game's over by then and your valuation won't pay for that upstart's valuation in terms of acquisitions. You know, you got to place your bets early.

So there is a saying that just popped up in my head that you have to compete with yourself. Don't worry about competition. Don't worry about what other people are doing or other companies doing. Compete with yourself. Just become better than you were yesterday. And I think this applies here. If you have something great that it's working, that's great. But tomorrow somebody will disrupt and you're going to be out of business. So you have to constantly innovate, so there is no right time. Just do it all the time, I guess.

Look through the lens at your existing business. Let's say you have a 20-year-old enterprise software product that has services and say to yourself, if I were going to attack myself, how would I win? Yeah. And I guarantee you someone's out there thinking about that already. And either you're going to get there or they're going to get there. So, the question is, how do you get there first? What are you going to do to win that marketplace? And then what resources, how is that market going to develop? But if you're not thinking strategically, you're just holding on to what you have, you're just going to lose. You're just going to lose.

Yeah. Yeah. So let's say that we are not trying to rebuild the same product, but trying to come up with a new product. How one can assess market needs and figure out those problems, not by accident, but if I wanna start research, what are some strategies to do that?

Great question, Vit. And people do unfortunately not only use the word ideas a lot, as I talked about earlier, but they also have this romantic version of the world where these things come up by lightning in a bottle. Someone spilled something, someone applied this chemical to something and it magically disappeared and they found this application. Unfortunately, innovation, real innovation doesn't work that way. Real innovation begins by talking with customers and talking, whether you call them customers or prospects, since they haven't bought anything yet, I'll call them prospects. And it starts with asking them about their as-is situation. Again, let me say that again. Their as-is. How do they do things today? And by the way, so don't come with a pitch. Don't come with, I have this idea that's going to solve this or do this for you. Sit down and start with, how do you solve this problem? Like, what is the process today? And how much time does that take you? What's involved with that? What are the things that create issues? How much pain or gain is involved? How much benefit is there for you if you get it right, if you improve that? And how much pain is there in how you do that today? It could be a problem people have, but they don't spend money on it. We have things in our personal lives that, oh, I have this problem, that problem. But you only have so much household income, and you're going to spend money on maybe the top 2 or 3 things. You're not going to solve all of them. Businesses are the same way. They're not going to solve every problem. They're going to say, well, yeah, it's a problem, but it's not a big enough problem. So it starts with active listening and good questions. That's where product discovery and innovation begin. Once you have defined the as-is situation, then you can start figuring out, well, how could I solve that? By the way, asking people how much they're going to pay and would you buy this and if we built this thing, People don't know the answer to that. You're asking them to predict the future. And people, I would say almost all of us are lousy at predicting the future. And so they don't know the answers to that, right? So that's why you got to build an MVP. You got to build some prototype, something that shows them then, and you can get a reaction from that. But guessing and predicting, people aren't good at. All they can tell you about is what they do today. And how much of a problem that is. And that's the start of great innovation.

And then, um, what are some challenges, uh, with actually starting to get a new product out of the door to people?

Well, I think it really depends on what stage of business you are. If you— certainly if you're at a startup, you've got to get the right team, the right people in the right seats, and you've got to build an entity, and you've got to get some type of funding in order to get an initial product to marketplace. A little bit differently, an existing company, you've got to figure out, you know, who can sponsor your initiative, what resources the company is going to be willing to associate with this, can you get a share of the budget, you know, where that comes from. And of course, there's always political issues that you have to deal with that is, you know, are you taking resources from somebody else and somebody else already working on a similar project, will the company continue to support this, etc. So, you know, where in the company Will you find support for this? So, you know, look, it all starts with the problem and then defining that problem and then your solution, then the right team and then the right amount of money to get it to marketplace. You have those elements put together so that you can at least get to, you know, you can get at least to the initial stages of showing something to get evidence that this thing, the dog will eat the dog food.

Yeah. And then let's say you're doing this prototype in MVP stage and then you realize nobody's going to use this. Nobody's going to buy this. What are those indicators that people can sense and kill these ideas earlier, not to overspend?

It's a really challenging area because the optimist, and particularly the entrepreneur startup, always wants to continue to invest more and believes in the idea. I think the key question is, what have you learned about what you've built relative to the problem that you initially identified? And in many cases, have you built something that truly solves that problem, or is the problem less of an issue than you thought it was, right? And the question is, should you pivot, right? Should you change some things and that is going to provide you and the prospect the value you want? Or have you really built something that is just not something that's worthwhile in the marketplace? I have fortunately or unfortunately been with several products that started out extremely slow in the marketplace and we pivoted several times And today they're worth several hundred million dollars. And those products could have easily been killed if it was just based upon revenue. If someone said, oh, we don't have any customers or we have a handful of customers, there's not enough revenue and we're putting more resources in it. So let's just kill it. That may be the stupidest reason to kill a product, right? What you've got to do is say, What were our original assumptions? Did we deliver on those? What is the reaction that we're getting? And how is that relative to the level of pain? And then look at the investment that still needed to be made. And is that investment something we're willing to take in order to change that, change the trajectory of where you are? But I've seen too many companies where new product comes out. It's not an instant hit. You know, people aren't flocking out to see things and then all of a sudden they just say, oh, pull the plug on it. And you see that in consumer marketplaces a lot today. You know, I laugh every week as I see hundreds of millions of dollars spent on a movie. Right. And it's released and, you know, may cost $100 million to make and $100 million to promote, $200 million. And they put it out one weekend and You know, it doesn't get the, you know, it only gets $50 million. People show up and immediately it's a dud and they're rushing it to streaming. And you think, you know, sometimes these products need to find an audience, right? And there's, I'm sure, a lot of testing that goes on with these movies as well. But I, you know, for instance, I'm just reading about this. This is being recorded in July of 2024 for posterity. But there's a Mad Max movie that's out and there was another one one that was out that didn't come out of the gates instantaneously, you know, making beaucoup money. And here they are on streaming and they're doing quite well, right? There's a golf movie with Dennis Quaid. Similarly, it's like a year after it was released and it's a huge hit and doing well on streaming services. And so you say to yourself, like, That means that the product itself was good. The product itself met the marketplace. And if they had figured out either the launch or the timing or the promotion or something, if the primary distribution channel was movie theaters, right? That may be a wrong assumption, by the way. But if that's what it was, maybe they wouldn't rush it out. So, it's too easy to bet just on, oh, it's revenue and that's the only metric. You know, you will pull the plug on great products prematurely by just measuring revenue.

Yeah, just going back to those metrics, maybe need to measure a few extra things rather than just how much money it brings or how much you spend on it already and things like that. And also discipline, right? You have to be a little bit patient and try different things to see if you executed all the options to promote it and to launch it. Maybe there's something left. So yeah, those are good ideas.

Yeah. There's plenty of products out there where people announced the product and were first to marketplace or even a fast follower. And you know, they, I was watching a YouTube video about the story of video discs, if you remember that technology, and how much RCA had spent in terms of R&D and announced the product and their history in terms of radio, their history in terms of making LPs, long play records, and how they had figured out the technology of video discs. And, you know, so much of what they did was, was it was early to marketplace, but it was spot on. And you see today what's being done in terms of streaming and even before when it was physical media that RCA had it right. And, and they just, they, they, they prematurely pulled a lot of things that they didn't have to.

Yeah, yeah, sometimes it happens. And I was also thinking, like, with this Kodak example, they actually built the technology and that, but they didn't act on it. Maybe it wasn't in the right time, right? And, and it's just sad because some people had this idea, they actually executed, but then nobody took an action to actually go and try it and sell it and show it to people. That could happen as well, and it just kills the whole organization. Yeah.

Well, they were very, you know, holding on to the film business. And I don't think there's anyone saying, gee, I can't wait to be in the film business. They weren't in the film business. They were in the photo business and the medium didn't make any difference. Right. And so, you know, they were protective of that model versus trying to figure out how to continue to be in the business they were in. And that's at the heart of innovation.

Yeah. Are there any other strategies to stay competitive other than just trying to build new products all the time and innovate? Are there anything else?

Well, you know, innovation anymore is not just about products. You know, I'm a product guy. I love that. I think first about products. You can hear that in the discussion we've had today. But a lot of, I'd say a lot of innovation today has to do with business models, maybe even more so with business models about how you consume the product. You know, certainly we've lived in the last 10, 15 years where things have moved to a subscription model for almost everything we buy. People are probably tired of subscription models by now, but it is a, but you know, that was an innovation where people said, hey, this is a way for me to acquire an asset to build, get access to something that maybe was a luxury item that I couldn't afford, or try something with a low barrier to entry or an easy exit if I don't like it, that I don't have to spend a lot of money on. And so subscription services were really great. They also work great for the company because you could predict the revenue and manage the churn or the exit of customers very well. So, and so applying that business model is, was, you know, fractional ownership of things and fractional renting of things through subscription. Is a real innovation. So it's a pricing innovation. It's a business model innovation because it's much more than pricing, as we all know. There's a, there is a whole go-to-market and retention issue that you have to think about and how you organize your business and run your business. But I think those business models offering the exact same thing as somebody else, but how customers interact with your company, how they buy it, how they use it, how they dispose of it. Those are innovations all themselves. And I think that we are still a long way away from exploring all the different ways of the as-is business model where people say, I can't get access to that, or I don't want to buy that, or I don't want to spend, where you can get it as a subscription model, try and buy it, shared model. I read about a guy, this, I, who knows if this will work, but I thought it was a really cool innovation, which, you know, we, one of the problems with people that have electrical electric vehicles today, and I happen to own two of them, so I know the problem well, is that there's not a lot of charging places, right? There's not a lot of charging points. And so like Airbnb or VRBO or other, you know, Uber or Lyft or whatever thing he wants to make your private home charging station, a public charging station, right? So and I've seen this with pools and other things, but, you know, it's an interesting, it's an interesting model. And I don't know if it'll work. But I mean, he's not building anything, right? He's not investing any capital or anything. He's just changing the business model for an existing asset. And that's real innovation too.

Yeah. Yeah. There is also car sharing service where you can register your car and people will rent it out from you directly, which is crazy to me. How can I give to somebody my car, somebody I don't know? Well, and imagine you have a line of cars next to your house trying to charge there.

That's what I was thinking is that my neighbors would go crazy if I had my electric charging points. Someone's wheeling in and charging, they'd be like, what the hell are you doing all day? But I'm sure he's thought about these things as he looked at the ads. I mean, I'm probably just stating some of the obvious, but at the same time, I just think that's great. He just took an app. Figured out the app, figured out the business model, figured out the pricing. He didn't have to, I mean, certainly had to build some software and things and registration and understand laws and everything, but really not building a new product per se, right? It's really the business model is where the innovation is. And that's just a fabulous way of innovating.

Yeah, yeah, that's very interesting. So speaking of those of, uh, things that come out with technology, and I'm sure everybody's like heard many, many times by now with artificial intelligence and machine learning and all the businesses jumping on it, building all kinds of stuff that may not even be useful at all. What trends do you see in technology world specifically that help with innovation and new products and take us to the next level?

Yeah, well, great question and a lot to unpack there. First of all, let me tell you that while most people think about innovation as technology, I don't. And just as we talked about with the business model, it doesn't have to be technology-based. And I work with great consumer packaged goods companies at the company I was recently with. And their definitions of innovation may be incremental product improvements or differentiation, new packaging, new flavors, new tastes, new ingredients, ingredients, right, that look in a technical world as new features to an existing product, but to them it's innovation. And there is science that goes on behind that. So, you know, technology does not always equate innovation. The other thing is, yeah, there's a gold rush going on with AI. And I'm old enough to have lived through one of the earlier generations of AI in the late 1980s. I actually worked for a machine vision and robotics company startup in the late 1980s. When machine vision and artificial intelligence and expert systems and things called Lisp machines and all kinds of other things were out there and they were going to change the world and revolutionize everything. And all the promises that you read online and any article about how AI is going to eliminate jobs, that was all— go back in the late 1980s and read lots of articles that say the same thing. That didn't happen. Now, certainly, I want to give credit where credit's due. We're a lot more sophisticated. It's been 40-plus years. We have better technology. We have better systems, and certainly it can do more easier, and it's more democratic. All of us have access to it. And so this current generation of AI, particularly generative AI, is really a fabulous productivity tool. I mean, I use ChatGPT or some variant of it to create PowerPoint presentations, write a white paper, do a post, whatever it is, probably every day, right? Even to rewrite something I want to write and get some feedback on it, whatever. And I just think it's a fabulous, fabulous productivity enhancement technology. And we're still 40 years after the wave that I was in at the infancy of AI. And I think we haven't gone through the, you know, Gartner Group has the hype cycle. We haven't gone through the trough of disillusionment yet with AI. And we're going to go through it because there will be a trough of disillusionment. It's not going to create world peace and solve hunger and make people live 1,000 years. It's a productivity enhancement. Workday is a fabulous productivity aid that 10 years ago you couldn't even fathom. So it is a little bit like magic. So AI, certainly everyone's got to have an AI this or AI that. I think the real innovations that you see in the marketplace are people who look at existing problems and say to themselves, how much of a problem is this? How big of a problem is this? How many people suffer from this problem? And how can we apply a business model, a technology, maybe something that already exists to help unlock and solve that and create— it's a little bit of my marketing hat on. At the end of the day, you've got to create differentiated value. And it doesn't matter if it comes in a business model or technology or a new ingredient in a candy bar. That differentiated value is why people adopt and embrace innovation. They consider it new innovation. And it's why companies grow because people say, I'll pay money for that. And it sounds so easy. It's so hard. And I would say for practitioners like myself who have had the blessings of working in the space and working on lots of new products, it is exhilarating. It's almost like a drug. When you can take a product and solve a problem and have an award-winning product that makes a difference and is used by companies or people around the globe, it's about as satisfying as it gets, but it's really hard to do.

Yeah, yeah, I can see that. So we're coming to the end here. So what would be your advice to business leaders, entrepreneurs, um, for innovation and staying ahead of technologies or any other types of innovations?

Yeah, first of all, uh, you know, I think going back to what you said is The existing business that you're in is going to go out of business. And the only way to prevent that from happening is for you to figure out how to attack your own business and for you to understand how other people attack your business and figure out what's right around the corner. Second thing is you got to create that culture of, of safety and failing and investment. You know, when you kill that second product, everyone's going to remember that in the company and no one's ever going to bring that second product up again. And now you've gone down a path and you've made an investment and you've sent a message culturally that that's failure and you don't want to be associated with it. And so, that's a really bad thing if you want to be in a growth business. So, make sure that you're creating a culture and making the decisions that say, "Hey, we're willing to accept risk. We're going to learn from that and we're going to figure out how to make it safe for you to experiment." The third thing is kind of what we talked about a little bit, which is innovation is not some kind of magical, romantic, you know, lightning in a bottle, wonderful thing that just comes around happenstance because someone saw, you know, X and Z together and they just put it together and had an aha moment. It's deliberate. It's process-oriented. There are frameworks. You need to dedicate time and resources to it. You'll get better at it just like exercise. So, if you dedicate resources to it and people to it and you put process and frameworks around it, you'll get better and better and better at it and you'll get better and better results. But if you don't practice it, just like a musician, if they don't practice every week and they don't go learn from the great masters or a professional athlete, the same kind of thing, you know, you're just going to try out and be, you know, try out for the National Football League because you think you're really athletic, you're probably not going to make the team. So, so make sure you make sure you're practicing and putting in process. And those are important things. So I would say those are the last one. You asked me a question that was very important. One, have some metrics, have some KPIs, put some objectives. When you have that annual planning meeting, we're coming almost through that time of the year here as we head towards the fall where people are going to have annual planning. What part of your planning is going to be percentage of new products that are going to generate revenue? How much money you're going to put in R&D? You know, how we're going to start contributing to our portfolio and measuring the portfolio success for our products and services? Do you have those metrics on there? Because if you're still betting on the same horse, the horse is going to die someday. So, you know, make sure that you have a second horse or a dog or a cat or a squirrel or whatever else that you're selling to.

Yeah. Okay. Yeah, that's great. That's great advice. That's a lot there. And, uh, yeah, thank you very much for your time today. It's been really a pleasure talking to you. Um, great information, great answers and wealth of information there.

Yeah, I really enjoyed this. Thank you for finding, uh, this and thank you for the discussion. As you can tell, I'm passionate about the subject and if people want to reach out to me, they can find me on LinkedIn. and hopefully you'll find me through, uh, through this podcast. Thank you.

Yeah, yeah, absolutely. And, um, uh, yeah, I hope we can talk more in the future sometime. You know, innovation's coming every month, every day, right? So there's plenty to talk about for sure. Yeah. All right, sounds good. Have a good day.

You too.

Bye-bye.