I just got back from a meeting my largest client held for its top brass.
Although my role is to provide ideas, I take as many notes as the next guy. One good idea from anyone can mean millions in profits.
I’ll be sharing some great business-building ideas with you in the coming weeks. Today, I want to begin with the one on top of my list: the importance of innovating.

As I pointed out in Ready, Fire, Aim, no matter what size your business is, there are only two ways to keep it growing.

(1) Increase revenues with sustaining innovations — by continually improving the products you are currently producing.

(2) Use disruptive innovations to create a new market, expand an existing one, or move into a different price category.

Sustaining innovations are perhaps the easiest to produce, because their need is apparent. (A microprocessor that enables computers to operate faster, for example, or a laptop battery that lasts longer.) Plus, the technology comes from existing research.

Apple does a fine job of sustaining innovations. That is one reason its customers are so cult-like in their loyalty.

But Apple made its greatest recent stride with the iPhone — a disruptive innovation. Disruptive in that it provides much more than cellphone users have been used to at a comparatively miniscule price. It is already eating up huge bites of the market. And when Apple’s contract with AT&T expires next year, sales will soar.

Improving your products incrementally will keep them fresh in the minds of your customers. That will mean continued renewals and back-end sales. But if you can introduce new products to the market — then you have the opportunity to double or triple your revenues in a matter of months.

Initially, disruptive innovations perform poorly compared with established products. But because they are often cheaper, simpler, and more convenient, they can create new markets.

When the transistor radio came out in the 1950s, it had very poor fidelity. It couldn’t, therefore, compete with the market for stereo systems: adults. But its portability and low price made it enormously popular with teenagers.

You want sustaining innovation so you can hold on to your existing customers. And you want disruptive innovation so you can expand and eventually dominate your market. Every smart businessperson wants both.

At ETR, we are constantly looking for ways to make our newsletters and information products more useful. We want our customers to get used to things getting better. We hope this will separate us from the competition. And, of course, we hope we’ll be rewarded for our efforts with more customer spending.

We also understand the importance of developing new products. In fact, we are committed to creating at least one brand-new product every three months.

For your business to succeed, you need two parallel processes: one that allows for sustained improvements, and another that gets you into different markets.

Both processes start in your head.

For one thing, you must recognize that coming up with incremental improvements is entirely different from creating something radically new.

You may need two sets of people and procedures to do both well.

If you run a new product idea through the regular channels, it will no longer be innovative by the time everyone has finished “polishing” it. It will be just another modification of what you are already doing.

Most senior executives I know claim they care about product improvement, but don’t walk their talk. When improvements are suggested, their first response is to worry about the costs — in terms of money, manpower, and time.

To create incremental improvement, you have to believe that it will pay off. Eventually. That’s a head thing.

And to create an environment where disruptive innovation flourishes, you must recognize that any sizable growth will come from ideas that are far afield. This, too, is difficult for most entrepreneurs. And with good reason. Their success is based on what has worked for them in the past. Not on moving into the unknown.

So your first step is an internal one: Make a commitment to innovation, both sustained and disruptive.

Your next step is a matter of communication. You must persuade your key people to believe in both types of innovation. You must give them a vision and inspire them to achieve it.

Your third step is one of implementation. You need two separate systems. Incremental improvements can be done with your core team. But the radical ideas — those will probably have to be developed on the side. (I like to bring in copywriters and marketers from other industries to brainstorm disruptive innovations.)

Ultimately, whether or not you keep the two processes separate doesn’t matter. What matters is that you become a business of “making things new,” as Ezra Pound once said.

Your customers — like all customers — are always on the lookout for new and better. If you don’t provide it for them, your competitors will.

Source: Michael Masterson

In the 20th century, America grew to become the world’s greatest economy because of entrepreneurial innovations. From Henry Ford (cars) to Abraham Levitt (homes) to Steve Jobs (iPods, iPhones), entrepreneurs created new products and services so compelling that consumers had to have them. Moreover, each of these new products or services created entire industries of support products, such as gas stations, restaurants, furnishings, cell phones, etc. However, for entrepreneurs today, the last decade of innovation stagnation has created the greatest economic opportunity in history because there are so many ready-to-be-implemented advances in virtually every sector of our economy. The greatest personal fortunes of 2020 are about to be created by entrepreneurs who either lower the price of existing products or introduce new products and services to our economy.

Many people blame today’s financial crisis on Wall Street. However, once the crisis had begun, the crash on Main Street was caused by consumers realizing that the emperor had no clothes—that many of the products and services they were buying were simply not worth their cost.

As we assimilate the events that led to the great crash of 2008, as well as where we are now, it’s clear there is no better time to step up and be the entrepreneur or intrapreneur who has enough vision and courage to give consumers what they really want: innovation. How do you do this?

Consider these strategies:

Master your industry. Learn as much as you can about your industry. As you learn more, your functional skills will improve and you will build a network, adding value to your new idea.

Fix the world. Notice the problems your customers have and fix them in a new way or in a less expensive way than your competitors.

Focus on the solution. Instead of focusing on the struggling economy, focus on ingenuity. How can you separate yourself from the crowd?

Hold on to your dream. Don’t let past failures or dire economic forecasts make you a pessimist. Keep your youthful dreams alive and create your own opportunities.

10 Things Aspiring Entrepreneurs Should Do

Look for problems. Just pick up any newspaper or watch any news program and you
will see how many problems need to be solved. Finding problems to solve are the business opportunities for entrepreneurs. Our past and future success lies in human ingenuity.

Become a leader in your field. Accumulate knowledge. Pick an industry, focus on it, and master it.

Build your network. Become recognized in your industry as someone who is good at what he or she does. Build a solid reputation for expertise.

Schedule your time. Don’t waste your 168 hours in a week; schedule them. I schedule my time intensely.

Notice what could be improved. Businesses become rich because they find a way to serve others better.

Stay wide open in your thinking. When you’re 18, your world is wide open. But as each year passes, one more nail goes into the coffin, killing your dreams and inspirations. And by the time you reach 25, you’ve been beaten down and become a realist. And my advice is you can’t let these things get you down.

Hone your entrepreneurial instincts to make the world better. We have to take responsibility for making the world a better place, and when we do, we’ll create our own opportunities. All my businesses started the same way: I got rich by improving the world and making a lot of people happier in the process.

Deal with the slaps. Rebel against rejection. You can go out into the world and do anything you want.

Exhaust your existing skills. Utilize all of your existing skills—what you know and who you know.

Communicate well. Becoming a successful entrepreneur starts with accumulating knowledge about many topics. First you have to work on your generic skills: reading, writing, and basic math. If you cannot communicate effectively with people, you are in trouble.

Source: Paul Zane Pilzer

Our past and future picks are a provocative and comprehensive challenge to anyone who thinks the age of prosperity is behind us. But, as always, we value your views. Post them to our 85th Anniversary discussion forum.

As this is an anniversary event, we’ve drawn up an vintage Forbes covers to recall and classic cover stories to read.

Finally, try the When Was That Invented? quiz and see how you do against other readers.

What are the greatest breakthroughs of the last four score and five years? A collection of people, products, services and companies that have changed our lives in a profound way. This is not a list of the greatest business minds–that’s why you won’t find Bill Gates on it. It is not a roster of the deserving (Gandhi) or the powerful (Stalin) or the biggest empire builders (Kaiser). It is a history of lightbulbs that went off and changed the world. The transistor gave rise to a trillion-dollar piece of the economy and a potent deflationary force. The pill altered human behavior; the polio vaccine and protease inhibitors altered life spans; the discount brokerage changed our capital markets.
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1917 Sneakers
When U.S. Rubber introduced Keds, the first mass-marketed rubber-soled sneaker, the company used the reigning color scheme for men’s leather shoes: black soles and brown canvas uppers. Keds remained a big seller until the late 1960s, when sneakers got a face-lift from University of Oregon track coach Bill Bowerman, whose waffle-soled running shoe would form the foundation of Nike and trigger an explosion in the athletic shoe business.

1923 Business Management
Long before Steven Covey and Tom Peters, Alfred P. Sloan (1875-1966) created modern corporate management as he rescued an ailing General Motors and made it the most powerful corporation in the world. He reinvented governance with an independent board of directors and executive and finance committees–a balance of power that has slipped lately. He decentralized decision-making for divisions that met financial benchmarks, a style widely imitated.

1923 Multiplane Camera
With his brother Roy, Walt Disney (1901-1966) turned a small animated cartoon shop into an entertainment epic, first with silent Mickey Mouse strips, next with feature films (Fantasia, Cinderella, Peter Pan), then with theme parks, his playgrounds of fantasy. Though Disney will always be remembered for characters like Goofy and Donald Duck, his biggest contribution to filmmaking was developing the multiplane camera. Traditional animation stacked cells on top of each other, giving little sense of depth. The multiplane camera got around that by placing each cell at a different level, allowing elements of a scene to move independently, giving them more realistic dimension. Moviegoers first experienced the magic with Snow White and the Seven Dwarfs in 1937.

1924 Frozen Food
1924 Mutual Fund
1925 Bell Telephone Laboratories
1926 Rocket Engine
1927 Television

1928 Penicillin
After working in field hospitals during World War I, Alexander Fleming (1881-1955) struggled to find a cure for the infections that killed more soldiers than bullets did. He came up empty–until one day, cleaning up his cluttered lab and sifting through old petri dishes, he discovered that a mold killed staph bacteria. Penicillin landed him a Nobel Prize in 1945.

1929 Synthetic Rubber
1930 Jet Engine
1933 Frequency Modulation
1933 Wallboard
1934 Value Investing
1934 Nylon
1935 United Auto Workers
1937 Blood Bank
1937 Pulse-Code Modulation
1938 Xerography
1939 Automatic Transmission
1939 Helicopter
1940 Radar
1942 Electronic Digital Computer
1945 Nuclear Power
1947 Cellular Phone
1947 Microwave Oven
1947 Instant Photos
1947 Transistor
1947 Tupperware
1948 LP long player
1949 Magnetic Core Memory
1950 Diners Club Card
1951 Levittown
1951 The Pill to prevent ovolation
1952 Thorazine to reduce shock suffered after anesthesia

1952 The Conglomerate
Seeking protection from the business cycles of the textile industry, Royal Little considered diversifying into nonrelated businesses in the 1920s. But it wasn’t until the early 1950s that the ailing textile business made the idea a necessity. Little’s Textron would go on to acquire 70 companies, including Bell Aircraft and golf cart maker E-Z-Go, becoming a template for modern conglomerates like GE, ITT and Tyco. The form survives, despite a crash in conglomerate stocks in the 1970s and the recent travails of Tyco.

1952 Holiday Inn
1954 Fortran
1954 Polio Vaccine

1955 Fast Food
Though he had a nice business selling commercial milkshake machines, Ray Kroc (1902-1984) figured he’d make more money flipping burgers. In 1955 he opened his first McDonald’s in Des Plaines, Ill. The Golden Arches changed the American landscape, doing to restaurants what Kemmons Wilson did to hotels: making them predictable. The franchise concept caught on, and Kroc went national with just a dollop of capital.

1956 Containerized Shipping
Trucking magnate Malcolm McLean (1913-2001) tired of the slow speed of transporting cargo across country and overseas. Adapting a truck-trailer design to railcars and ship cargo holds allowed quick loading. The first containerized cargo ship set sail from New Jersey in 1956–spawning a new industry that set a precedent for the likes of FedEx.

1956 Disk Drive
1956 Fiber Optics
1956 Ampex VRX-1000 for analogue video tape recording
1958 Implantable Pacemaker
1958 Laser
1959 Three-Point Seat Belt
1959 Integrated Circuit
1961 Pampers
1962 Telstar I satellite telecomunication
1962 Modem

1962 Point-of-Sales Data
Former J.C. Penney management trainee Sam Walton (1918-1992) opened his first Wal-Mart in Rogers, Ark. Four decades later the retailer has sales of $238 billion and 4,300 stores. He married a genius for efficient distribution and inventory with point-of-sales databases. In the mid-1980s Wal-Mart began sharing store-by-store sales info with vendors so they could tweak product lines–and let Wal-Mart leverage better prices from its biggest suppliers. If Walton were alive today, he’d be the richest man in the world.

1964 Mainframe Family
IBM’s System/360 product line was the first that consisted of a family of commercial computers using a common program language, so that customers moving up the scale in computer power could take their software with them. The creator of the 360 line, Gene M. Amdahl, left Big Blue to create a mainframe competitor in 1970. He later went on to found three additional computer companies.

1965 Consumerism
Long before he became a presidential election spoiler, Ralph Nader was America’s chief corporate scold. His Unsafe at Any Speed targeted GM’s Chevy Corvair. The book influenced Congress to pass the National Traffic and Motor Vehicle Safety Act in 1966. Perhaps more important, it provided a template for “activists” looking to target corporations for a variety of ills–real or perceived–and bolstered the market for plaintiff lawyers.

1968 Mouse

1969 ATM Automated Teller Machine
Bankers talked about automated cash dispensers for years, but Donald Wetzel, a former minor league baseball player and IBM salesman, gets credit for the first working model. The vice president of product planning at Docutel, then an automated baggage-handling equipment maker, installed the first ATM at a Long Island branch of Chemical Bank. The first machines were offline, but today some 1.1 million units are linked together across the globe. Wetzel left Docutel to start his own companies that sold banking equipment like vault doors.

1969 Charge-Coupled Device

1969 The Internet
Who knew that the military-industrial complex would become the midwife for Web porn? Designed to let scientists working for the U.S. military communicate via computer, the Arpanet started small, connecting terminals at Stanford and UCLA. The National Science Foundation later took the technology and created a network that could handle greater traffic; it still helps support the Internet today. As it became less military and more commercial, the Arpanet morphed into the Internet.

1970 Compact Disc

1970 Relational Database
Oxford-trained mathematician Edgar F. (Ted) Codd developed the concept of the relational database while working as an IBM researcher in 1970. Earlier computer databases had fields of data arranged in a rigid way; Codd’s notion was that disparate data sets could be combined by linking fields they have in common (say, a customer number). Codd clashed with his bosses at IBM, who were pushing a more primitive system. But the relational database is now standard–and the basis for Larry Ellison’s Oracle fortune.

1971 Answering Machine
1971 Microprocessor
1972 Computed Tomography Imaging
1972 Ethernet to describe the system of wires and microchips that allow computers linked locally to talk to one another
1972 UNIX/C Programming

1972 E-Entertainment
Nolan Bushnell (b. 1943) gave geeks another reason to stay indoors by introducing Pong, a crude electronic tennis game, which was later miniaturized for the home. Bushnell’s Atari dominated the videogame market, but he eventually sold out and started the Chuck E. Cheese’s pizza parlor chain. The game brand he created is more visible today on hipster T shirts than on TV screens. But the industry he started, now dominated by Sony and Microsoft, generates more money in the U.S. than the movie business gets at the box office.

1973 Discount Brokerage
It’s unlikely taxi drivers would have turned into day traders had it not been for Charles Schwab (b.1937). He positioned his company as the anti-Wall Street firm, dumping all the trappings of a typical brokerage house–the commissions, front-end loads, markups and fees–in exchange for simple, low-priced, per-trade fees. Today his San Francisco-based outfit serves 8 million investors who control $800 billion in assets.

1974 Catalytic Converter
1974 Index Fund, a basket of stocks made up of the 500 largest companies.

1976 Personal Computer Chic
Apple cofounders Steven P. Jobs (b. 1955) and Stephen Wozniak (b. 1950) helped usher in the era of the PC by making their machines accessible and cool–as desirable, in their way, as sports cars. But because Apple never made a serious stab at the business market, it has always been a shrimp compared with larger outfits. Those same competitors, though, were always ready to adopt Apple’s innovations in user-friendly design and clever marketing. Wozniak retired in 1985; Jobs was forced out of the company in 1985, but returned in 1997 to lead Apple’s latest incarnations.

1976 Recombinant DNA
Robert Swanson, then a 29-year-old venture capitalist, teamed up with University of California, SanFrancisco professor Herbert Boyer to commercialize Boyer’s breakthroughs in “recombinant DNA” technology–splicing together strands of DNA to whip up marvels like human insulin for diabetics, growth hormones for children and antibodies for cancer patients. The two founded Genentech, the first in a wave of biotech companies. It went public in 1980, raising $35 million. Swanson died in 1999. Today his $17 billion (market cap) company does $2.2 billion in sales.

1977 Cash Management Accounts
After a meeting with members of the Stanford Research Institute, Merrill Lynch chief financial officer Thomas Chrystie came up with the idea of an all-in-one account that included check-writing, money-market benefits, a Visa card and brokerage services. The idea was slow to take off, and Merrill nearly abandoned it. But it eventually became copied to the point of ubiquity, giving inspiration to those who harbored dreams of creating megabanks.

1977 Original-Issue Junk Bonds. Michael Milken opened up the capital markets to fledgling firms by putting together a $30 million bond issue for a small oil company called Texas International. The bait for investors: a high yield of 11.5%.
1979 Spreadsheet
1984 Liquid Crystal Displays

1984 Customized Mass Retail
Michael Dell got into the disintermediation business–bypassing distributors–during his freshman year at the University of Texas at Austin. He bought overstocked IBM PCs at cost from local dealers, then sold them to consumers at 10% below list. He dropped out of school that year, and started selling his own homemade versions of the computers for $795–built to customer specs. Now Dell dominates the PC market, posting $31 billion in annual sales. More impressive, his customized retail strategy, once an anomaly in the computer business, is now standard practice. That’s good news for customers and for the mass distributors who parcel out the machines, but worrisome for conventional retail outlets.

1987 Mevacor
It took more than 35 years for scientists at Merck to conjure up Mevacor, the first widely used drug that reduced cholesterol. The pill worked by blocking an enzyme from creating mevalonic acid, thwarting the liver’s production of cholesterol. Under Chief Executive P. Roy Vagelos, Merck researchers developed Zocor, a second generation of the drug, and proved that it, as well as other cholesterol-lowering drugs, reduced the risk of heart attack. Zocor sales jumped in 1995 when the FDA approved it as a product to prevent heart disease in patients who already suffered a heart attack.

1987 Prozac
Ray Fuller, a researcher at Eli Lilly, developed a drug that blocks serotonin, a neurotransmitter thought to cause depression. Today Prozac is the world’s most widely prescribed antidepressant, with over 40 million users in 90 countries. The pill also challenged traditional concepts of psychology and identity, igniting a debate between enthusiastic advocates and those who believe that mental states are too complex to be treated like a common virus.

1991 World Wide Web
Software consultant Tim Berners-Lee developed Enquire, a program that linked documents from various computers around the world, effectively granting a visa to the masses to travel through cyberspace. Marc Andreessen brought further order in 1993 by creating Mosaic, a program that allowed people to view pictures as well as well as words. Two years later, Netscape: a point-and-click browser that made surfing an indoor sport, and ushered in the era of high-flying Internet public stock offerings. Yeah, and you think it hasn’t changed the world forever?

1995 Protease Inhibitors
In December pharmaceutical company Hoffmann-La Roche received approval for Invirase, the first protease inhibitor for patients suffering from HIV. The new class of drug disabled the protease enzyme from duplicating the HIV virus in cells, offering the first glimmer of hope for an AIDS cure after nearly two decades of searching. Years later doctors used the drug as part of a triple cocktail that includes AZT. When taken, the cocktail virtually wipes out signs of the HIV virus in most patients.

1995 Internet Business
Lured by the promise of a new business paradigm, Jeffrey Bezos started selling books online at Amazon.com, and Pierre Omidyar launched Ebay, an online marketplace. Hundreds of other entrepreneurs followed suit, selling everything from bicycles to bubble gum. Most flamed out, often in spectacular style, but Amazon and Ebay endured.

1998 Viagra
Working in Pfizer’s Sandwich, England office, researchers Peter Ellis and Nick Terrett noticed an uplifting, if unintended, side effect in test patients taking sildenafil citrate, a drug being developed to treat angina. They patented Viagra, making erectile dysfunction part of the national conversation and Bob Dole an unlikely celebrity spokesman. Approved by the FDA in March 1998, 3 million prescriptions were filled in the first three months. Since then some 16 million men have taken the drug and an average of nine tablets are dispensed every second. Sales to date: $5.8 billion. Viagra imitators and drugs for female sexual dysfunction are in the works.

2000 Automated Sequencing Machine
Using 300 high-speed DNA-sequencing machines, gene guru J. Craig Venter stunned the scientific world when his company, Celera Genomics, deciphered the entire human genetic code in just over two years and with a research budget of $270 million (it took Uncle Sam 13 years and $2.5 billion). By studying the genetic variations among humans, scientists will be better able to diagnose and ultimately cure diseases like diabetes and schizophrenia.

Source: Forbes
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What will the next 85 years bring?
The last century has seen only a few major display innovations, among them the move from black-and-white monitors to color and the introduction of flat, liquid crystal displays to replace cathode ray tubes. If Richard Friend’s discovery lives up to its promise, the LCD will someday be tossed aside in favor of the OLED–organic light-emitting display.

OLED could open new areas of art or, more prosaically, lead to a new kind of camouflage bodysuits, even constantly updated newspapers that look and feel like the original thing. “One always falls into the trap of going into the straight-replacement mode,” he says. “But with a revolutionary technology you should not simply map it on to existing products. Not if you are an optimist.”