Investing Time Or Money In Market-Making Or Disruptive Innovation

Protect your brand, product or invention from the hazards of consumer product launching and go from idea to product to big brand with guidance from retail product design and development experts Tracy and Tom Hazard get the insider secrets to put the right things in the right order with the right resources so you can out design, outsource and out profit your way to retail success.

Hey there.

Welcome to Product Launch Hazards. I'm Tracy Hazard and today I decided to do a little bit different. Rather than doing an episode where I'm talking straight with you, I'm going to give you an insight into one of the talks I gave recently at a City Summit event in Salt Lake City. For those of you who have never heard of the City Gala or the City Summit, although I may have spoken about it before, you may have read about it in my column for Inc. City Summit and City Gala are the events raised funds to help seed nonprofit social good companies. And I've been involved in the organization for a couple of years now. And sometimes they get let me preview who's going to be their big celebrity headliner. It was Ashton Kutcher last year, John Travolta and Halle Berry before that. And so anyway, it's always interesting and the idea is that they bring celebrities together for a cause to try to help move that forward and help raise funds to seed a nonprofit and get it going and started. Which is really, really difficult because, you know, at least those of us who are in the product inventing world, right? We have a product, we have an asset. At the end of the day, we have market proof. There's sales, there's revenue. It's a little more direct of a return on investment. But when you're just doing a social good project and you don't have a lot of that proof early on, it's really hard to get investors to come in at the early stage with you because it seems more like just a donation and not necessarily an investment. So this company helps to do that. Ryan Long and Dale GoldBoldo, those are two of the big founders of it and make this happen every year. And they've been doing this executive and entrepreneurial education program around the globe country. So they may be in your area and you should check them out. CitySummit Co is their website and can check them out and see if they've got an event coming in your area. I'm about to go to another one in San Diego and I'm gonna give the same talk that I give and so I wanted to give you the video of it. There's a SlideShare, there's no video of me. You can just hear my voice. That's because all I had was a voice recorder with me. There wasn't somebody doing video that day. But you can have my SlideShare from it and that might help you as well. But the one thing that I want you to consider is that while I was giving talk to people thinking about investing in innovation, I was really also kind of coached in the process that you could be looking at this from whether or not it's worth your time. It's the same thing. So whether you're investing your time or investing your money, you really need to think carefully about how you're going to invest in innovation. And specifically, I was looking at the difference between disruptive and market making innovation. So I hope you get something from it and please give me some feedback. I'd love to hear your thoughts about whether or not you're in a disruptive or market making venture yourself. So thanks again, everyone. This has been Tracy Hazzard from Product Launch Hazards.

So many of you asked me what I do and this is not what I do on a daily basis. But this is what I wanted to bring you because I don't like to give the same talk twice. I get bored really easily. I don't know about you, maybe that entrepreneurial thing, but this is a culmination of something that I think would be really valuable to you. Because the number one thing is I get approached by authors, speakers, brand builders, inventors. Oh, the inventors come out of the woodwork when they find out that I have 37 patents. So they want to tell me their story and their products and they want to pitch me because I write for Ink. So we get this all the time. And this is the thing that I tell them all the time. Are you worth it? Are you investable? And how do we figure that out? So what I'm going to give you is thinking about this investable innovation. This is whether or not you should invest your time. So if you're not an investor, how many of you are actually investors? Right? You invest your money into things. Okay, great. How many of you, though, invest your time in your companies, in products, patents? Anyone? Yeah. So if you're going to invest your time in something and your time is extremely valuable, I believe it's more valuable than my money. Then how do I decide what I'm going to spend my time on? So I apologize because I'm a real. I'm an Italian speak with my hands. So there's gonna be this like sound thing going on. But so anyway, so this is what I want to bring to you today. So disruptive versus market making. So we hear this term all the time, because I write about disruptive technology. We hear this term, it's a disruptive company. It's gonna change the world. It's going to, you know, autonomous cars are gonna get rid of taxi companies and vehicles and everything's gonna go away. Nobody's gonna have garages anymore, you know, or nobody's gonna have parking lots. Like what's gonna happen with all of this stuff, right? So we start thinking about these things, but how often do we really see something that's truly disruptive versus something that truly just created a new market? So there is actually a difference in terminology. Harvard Business Review wrote a big, big expose this past year about the difference between disruptive companies and market making companies. And I want to challenge you because it's actually a lot easier to be a market maker than it is to be a disruptor. So let's think about whether or not we have these two characteristics and what we should invest our time in. Tesla is truly a disruptor.

Why?

Because they went for a high end part of the market, not the low end part of the market. They went for the high end part of the market and they looked at it and they said, yeah, we think that these people will buy electric vehicles because we think millionaires and those who make a lot of money care about the environment. That was a pretty big leap for the automobile industry. That was not, not what people thought. And I think I just read a statistic or something recently that they have outsold BMW, Mercedes and Audi put together here in the U.S. that's a pretty astounding number. So they have truly not just created a market, but they disrupted the current auto industry sales process. So they truly are Apple, of course. I mean, how many mobile phones do we have? And they started that. So we have them to think Netflix a disruptor, but not because they actually went into it. They went into the marketplace to try to. They didn't go after the low end, right? They didn't go after directly to compete with Blockbuster. They went in to go after and say, well, we think there's a lot of people just rather have it. They don't care if it's like a new version. They just want a convenience to watch a movie in their home that they heard everybody watch. But they're like three months behind everybody else, so they don't care to be first. But then what happened was digital media came about and helped disrupt the market for them. So they were like what Brian Smith was describing, right? They were the Reebok, they were the Nike. They got to go along with the flow and actually disrupt the market. And so that's what happened for them. So we look at Amazon, Airbnb and Uber and they actually are not disruptors, although they're described that way in the press all the time. Why is that? Well, because Uber didn't disrupt the taxi industry. They didn't go underpricing taxis. That's not how it happened. They just went after a market that just was like, oh, I'll just switch, right? They didn't go after to treat an underserved part of that market. They went after and people went, that sounds kind of more fun. That sounds kind of more convenient. And all of a sudden it was Amazon, the same thing, right? Started buying books in 1998. I am like one of their first customers. This is a joke running because I have a friend who works for them that I was the model they created the Amazon Fire phone for. I was actually the profile. It was called Tracy. So I am their profile customer. So how does that happen that they come in and they disrupt retail? Well, they didn't really disrupt it. They just created a whole new market and online happened, right? So they went along with that. So market making, they create that opportunity. Let's look at the sixth rate. You have a 6% chance of being the disruptor in the market, 6% chance of being success. But you have a 28% chance of success of being a market maker, because you're watching the signs, you're seeing indicators, you're going along with it, and you're building a market within something that's already happening and already going on. So you upped your odds already. So we want to be market makers because that's actually better us, right? We have a better chance of success. Oh, that's my husband, Tom. Most people are like, oh, you have a husband? They never see him at my events. We don't travel together because we have three daughters, two of who are really young. Our oldest runs one of our companies. So if you've talked to Alexandra at our company, then you've definitely talked to my daughter. She's 23, she's married, and her husband created your video that you produced, right, Jonathan? That's right, yeah. So these are ways to find me. I just want you guys to know that, look, I'm not going to talk about my story and about my stuff here, because that's not who I am, and that's not what I do. I want to serve you today. I want to give you some things. But you can find my column. You can find my podcasts. We are actually a case study in IP and entrepreneurship at Harvard Business Review, if you want to take a class. So let's see. So how do you know if it is worth investing in? How do you know if it is it? Right? How do you get it? So Tom and I have been working in product design and development for 27 years. And we know all the time we work on different products, we work on different things. And 3D printing came about. You guys heard about 3D printing? You guys know that? Yeah. And so we said. So Tom bugged me. I was having my third child. We had just gotten stiffed by a consulting client. I was really pissed off. And he kept bringing out make magazine and saying, look, these 3D printers are only $3,000. And, you know, we could make products in our, you know, in our office, and we could sell them. We could use this for our clients. Even though we had a model shop in China and we had, like, tons of resources to make models, I was like, I don't know. We want to do that. So a very grumpy just, like, said, forget it. We're not doing that. Why would we invest in that? There's not a market for it. And then he reminded me of the one thing that I always say. Well, it's our job to decide and help our customers and our clients evaluate whether or not there is a market for something. And if we don't experience, how will we know? Grump me with my own words. And so we bought a 3D printer, and it took us nine months to make something that was Instagramable. It's that tie. It's a necktie. It was on him in the last shot. So it's a necktie. He wears it to all the events and takes great photos of it. But I looked at it still, and I said, I still have so many questions. Is this a market? Is it worth buying? Are people gonna really stop buying products? Are retailers gonna stop stalking them? Like, where is this market for it? And so I said, well, how am I gonna go out there and figure that out? So we can do some market research, we can do some various things, but the best way is to figure out if somebody will plum dung dollars for it.

Right?

So we built a podcast. And so this is almost five years ago, we built a podcast about 3D printing. We started talking to people, and as we Started talking to people. We started to figure out if there was a market for it. That's the podcast right there. Wtff and FFF stands for Fused filament Fabrication. It is not a swear word. And so you can still listen to that. There's almost 550 episodes or more, I think that we have. So we've had that our whole time. And if any of you want to know, it ended up not being viable. I'll explain that in a minute. But when I talk about 3D printing as a disruptive technology, it ended up not being viable. But you know what? We have an authority site. It makes us money every single day. That podcast makes us money every single day. And all I do is record things and record interviews with people. So it wasn't worth investing in. Here's my criteria for investing. So I'm having trouble seeing, but credibility. And, you know, for some people, this is like character. It's like, does the team think about this? Does the team. Does the inventor, do the people who are going to do this, do they have credibility? Can they do what they say they're going to do? Well, it goes that same way with the technology. Can the technology do what it says it's going to do? What are the barriers for that? Does it have credibility? Is it, you know, above board? Like, you know, sometimes we look at things like Bitcoin and we wonder, is it going to get squashed by regulation? So we look at that as a risk factor. The other thing we look at, concept proof. Okay, this is my biggest. I do 100 talks on market proof a year. I mean, this is the one I cannot talk enough about. You should have market proof. Whether you have a service business or a product business or whatever that is, proof matters most. Collateral, ip, is it going to give you something that is valuable at the end of the day that somebody else wants to invest in or buy out from you? So that's what we think about. As I mentioned, concept proof is the most important because upping the odds of somebody wanting this is whether or not the dogs eat the dog food and more importantly, whether or not the owners will buy it. Okay, I care where the dollars are spent, because if you match the product market fit, you up your odds by 56%. So product market fit is the number, number one and two, failure. So we can go, I have a great product, but I don't have the right market, or I don't know what the market is, or I don't know how to reach that market, or I have a great Market, but I have no idea what to make for them. So it can go either way. But when you have a mismatch there, it is not team, it is not money, it is not all of those typical things that people think cause startup failure or launch failure. It is product market fit. That is the absolute, that makes the biggest difference. And if you can get a match in that, you can have a success rate. So I've done 250 products for mass market retail. You buy products that I designed every single day at Costco, Walmart, Target, Amazon, all the time. The difference is that I have an 86% success rate. And it is because we don't go into making a product that we don't know is going to sell. We already know it's going to sell, either because we know the channel and market or we know that the product itself has that market.

So let's talk about some technology that you might be a little late to the game in. You might be a little late to the game in autonomous cars, right? It's pretty far gone. It doesn't mean it's too late. But it's a different kind of investing. When you get on board at this stage, right. You're not an early stage investor, you don't do the high returns on investment, space colonization, clean energy. Doesn't mean it's not worth investing in. No. If you care about it and you're passionate, there's some great companies out there working in these industries and these industries have come far enough along that they're mature enough to succeed. So then it's just a matter of evaluating that credibility and that team and whether or not they have a concept that is going to work. So these are good things. This is CRISPR medical tech. I don't work in medical tech, but this is a really good field. If you're looking at stuff like DNA splicing and other things like that, you want to really look at that and say, does this fit my trust factor too though? So is it a sin? My ethical, the ethical side of what I believe is okay in the world. So these are ones that you should still consider. But you got to consider companies that are at a different stage in what they're doing and they must have a higher, higher proof stage. So you're not going to get them at the seed stage. So let's talk about AR VR and mixed reality. Like people are like, oh, that's done. I can tell you I wrote 12 articles this past year on AR VR and mixed reality alone. The biggest areas where they're having the biggest impact is in advertising. So some of the companies are doing some amazing things. I don't know if any of you seen recently, Facebook put out a new filter that you can take a photo of. And it does 3D. It basically has. You'd be in the foreground and all those people be in the background. And it looks pretty dimensional. It's pretty cool. And it's a form of what they're.

Going to roll out.

And this is why they invested in virtual reality. It's coming. These are things that it's still not too late. There's some amazing companies. I met like three or four. There's a great company doing some architectural walkthroughs. Can you imagine that? You don't actually have to. They're doing virtual real estate. So, like, you can imagine this commercial space and what it's going to look like and what it would look like as an event. And you can do that already without ever being there. So you can imagine it as yours. So there's a lot of really cool things going on there. This is definitely a technology worth investing in still. And AR has a much higher. How do I say this conversion rate would be the best way to use the term conversion rate, because it's getting into your head, through your eyes and through your seeing it, but giving you deeper dive information that you believe you're a part of it. VR does that in. I mean, it helps people heal. If you're afraid to get on an airplane, they can teach you. They can get you over your fear of flying without you ever getting on the plane, which no one would safely allow you on the plane to learn how to do this. But you can get over that because you believe that it's happening to you. And when you believe that it's happening to you, you believe that it belongs to you. So if you're talking about buying conversions, very high 3D printing, I had talked about that briefly before. So do I think that there would be 3D print products in the world? I think it's really far from that. I think there's tons of really great. But I do. I think it's like consumers want to do this. No. The reason why is because not a single company in the five years that I've been covering 3D printing that I've been 560 episodes that I've talked about it, not one company has invested in content. So you remember when itunes came out, there were songs on there, right? It wasn't garageband stuff. It was like professional Stuff. Well, you cannot create products in your garage that easily. When you create products in your garage, it's 14 year old boys creating products. It's the handyman who's really great at it, but nobody really wants to buy that. So if you want quality products that you want to buy, you need to get women involved. You need to have a different scope of things. And is that happening? No. Because nobody has invested in professional content. It's why it's failing. It's why we did do it. Because nobody would invest the kind of dollars necessary to build a catalog that was so amazing. So that's why it hasn't taken off in that kind of world, but it's taking off in aeronautics and robotics and underwater ROVs. I mean, there's some amazing places that things are 3D printed that you don't even know about. And every single product that we bring to market that can be 3D printed and tested before we tool for it, we do that. So we actually sell stuff on Amazon that you don't know is 3D printed when we're testing out whether or not some people will buy it. Right. So it's enabled us to make runs for thousands of dollars instead of tens or hundreds of thousands of dollars. So there's a lot of viable things going on there. It's just a matter of finding the right companies, the right projects and the right interesting information. Okay, this is my favorite one, AI, because it's so controversial. People are always asking me, oh my gosh, artificial intelligence, like so scary. But really you're seeing it already. AI is in our IoT, so Internet of things, in our voice, our Alexas, we're seeing machine learning. Like if there's machine learning involved, we've got some amount of AI going on in there. And how, you know, this is what I truly believe. I truly believe that my job here on Earth is to be an originator, right? I'm supposed to be original. I am supposed to be that kind of person. And if the mundane tasks, if the research, if the finding stuff is getting in the way of me being able to do that, then why shouldn't I create a program to do that for me? Why shouldn't I have Alexa search through the Amazon catalog instead of me spending an hour trying to figure out what SOAP is top ranked, why should I do that? So this is really where I have high, high indicators of everything going really well. Is it overhyped? Yeah, Iot is really overhyped. Because how many of us really want our dishwasher to reorder its dishwashing detergent. It's kind of, it's a little overdone, but Voice, Voice is killing it. Voice is the future. Right now Google has invested a tremendous amount of money in competing against Alexa with Voice. I think Alexa wins every time because Amazon has a higher trust factor. But Google owns the Keys to the Castle because at the end of the day, when I mentioned I had an authority site, the reason my authority site does better is because I can speak 6,000 words in 30 minutes. So can you write a blog post in 6,000 words? How long would it take you? I can get to the top rank on Google because Google is rewarding me because it's voice recognized pattern of language, what they call nlp, but not the NLP you all speaker authors know. It's nlp, natural language patterning. So the natural language patterning is being rewarded. It's been being rewarded for years now as they've been testing it out. And it's why the sites that we have, and we have a partner who has 1,000 revenue generating authority sites and all the sites that we have, podcasts that turn into blog posts, they are all outranking because Google's rewarding this. So they're going to town on this. They just opened the Google podcast app too. Blockchain. Some of you guys approached me about Blockchain, my new favorite thing to write about. And we're starting a new podcast in December. I'm starting with a woman named Monica Profitt. So it's Proffitt and Hazard. So we're going to talk about the benefits and the risks and so the new trust economy. But the reason I love Blockchain is because it rewards originators. There's some really great things going on here. Now this is really early stuff, really early stuff. So you want to talk about the early age, like 1995, 96, 97. Don't you wish you got your name dot com? What if you could get your dot block right now? So there's a new company, NASGO. Cheryl knows it really well. Right. I just interviewed Eric Tuppetz, the founder, and they are the godaddy of Blockchain. And wouldn't that be cool if you could get that right now? Wouldn't it be even better if you could get it for a few hundred bucks?

What's the risk if blockchain goes, which it should, I don't see any reason because of what it's doing. And you can talk to me after because I'm like 30 seconds from time Here, but wouldn't it be cool if you could do that? So I'm hot on that. Not the cryptocurrency side, I would say there's still a high risk in regulations there. But.

Media disruption, this is a little of a catch all for me. But you see what's going on with YouTube, Facebook, I mean these companies becoming media companies without even realizing it. All their dollars are coming in ads. But lack of trust is happening here and there's a lot of that. But then look at the influencers that are popping up of nowhere, right? You too can become an influencer, you too can become an authority, you can become all of those things. The thing is that you got to learn how to do it. You got to figure out what works and what doesn't. However, if you can figure out that formula or if you can become a part of a done for you service that does all of that, then you can get in on the ground floor. I am really hot on podcasting, as you all have probably already heard and figured out from now. But I'm going to tell you why. Podcasting is old technology to some people. It's been around 10 years, I think John Lee Dumas has had his podcast for eight. So like, you know, it's old to some people, but the reality is is that Spotify just got on the top 100. They're number 98. Number 98 of the top search websites. So where are you going to be found? There are only about 150,000, I'm going to say active podcasts, people who are continually making new episodes. 1.4 billion or more, as Daniel was saying, many more websites on Google. But you can be found in a podcast really easily and I can tell you from experience. So I have a company, it's called Potaties. Potatize is a podcast production platform. But it's also a done for you service that does everything from. Wouldn't it be great if all you did was just do this talk right here, get it recorded and there's a recording device right over there, get it recorded, have it transcribed, have it put in your website for you, have a podcast made for it, have a video made, have it put up on YouTube, do all of those things and you don't have to do anything else. That's the kind of service models that are coming up. These are the kind of businesses, this is what I want you to take away from today. I want you to take away that I have a business that generates a tremendous amount of cash flow and is a fantastic business. And I get investors coming up to me and asking me, literally, how much do you want for me to have a piece of it? Because I have proof, proof of concept. I have 125 clients, including Kevin Harrington and Josh Martin. Anybody? A New York Jazz fan, Josh Martin. I also have doctors, entrepreneurs, thought leaders, speakers, authors, Hearst Publications, Esquire, O Magazine, all of them. We are the engine behind it. And the reason we're going to grow really fast next year, and I'm excited about it is because we're partnering with marketing agencies and we're just doing it for them. So when you've got a company that's like, that is built so it can automate and move forward but your proof of concept is solid, then it's worth investing your time and energy and building those systems in. But when you're proof of concept from the beginning and you're not really sure and you build all this stuff and then you go, okay, I'm ready to sell it. You waited too long. Test it from the beginning.

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