Is innovation the key to growth?

Last week we explained the fourth building block of the business model – strategy – with an engrossing, even scary, use-case of slot machines in Vegas. Today we will introduce you to the fifth building block – innovation – with yet another mind staggering use-case. And as usual, we will try to gain perspective within the context of the Buddhist framework.

What is innovation? The dictionary definition of innovation is ‘something new or something different’. This is one of those definitions that no one can improve upon. It is pithy, it is evocative, it is appropriate. This ‘something new, something different’ can be in what it is; it can also be in what it does.

Eg: A pencil with an attached eraser is not only different to look at from a regular pencil, it is also different in the customer experience it delivers.

Innovation may also be incremental (marginally new or different), or disruptive (hugely new or different).

For example, roasting a corn cob on charcoal and smearing lemon and masala over the corn cob is incremental innovation. But creating an ice cream with fresh fruits, without using preservative, to have the same shelf life as that of a regular ice cream is hugely disruptive.

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Innovation is crucial in the context of an entrepreneur

There is a notion that you need to innovate only in the early stages of the company when developing the product. The association seems to be that innovation is only associated with a product. Nothing could be farther from truth. Firstly, you need to innovate till you die or your company does. Second, innovation is not just about the product. It is about everything that your company is and does.

Amul did not just innovate dairy products; they innovated in how they sourced milk from the villagers; they innovated in how they used community radio to bring all the villagers on to the same page in terms of knowledge, skill and attitude; they innovated in the way they collateralized the mnemonic, the memorable ‘utterly butterly’ girl; and they innovated in the way they ensured the largest mindshare of their customers by using current news to embed their brand messaging.

Innovation is also very crucial in the context of an entrepreneur in a start-up stage. Given that his resources are extremely limited, the entrepreneur is likely to take his product to market in a bared-down version. Minimal features, even an unambitious customer empathy map. May not even have the intention of monetising at this stage at all. This is his V.O but he has plans of adding features, may be even products, new markets, new channels, on his GANTT chart with forward datelines. Typically, all these should go into his innovation pipeline.

Let us now understand, within the four Buddhist truths, what innovation is and what it does, with a disruptive use-case - that of Slack.

Slack is a chat and productivity tool used by most companies. It has been estimated that 77 percent of Fortune 500 companies use Slack. So it is no surprise that it reached $1 Billion in valuation in less than eight months of operation, without spending a penny on advertising and without even hiring a CMO! Slack has a very interesting history which is worth recounting here.

Stewart Butterfield started a company called Tiny Speck. With his team of four, he set out to create something new and original for the massively multiplayer online role-playing game (MMORPG) market. He called it Glitch. As each of the four members operated in different cities, and even multiple time zones, the team used Internet Relay Chat (IRC), an online chat tool that was used by most people.

At some point, the team felt that IRC did not serve the purpose and set out to design an internal communications tool expressly for the purpose of building their gaming product. They called it Slack, an acronym for Searchable Log for all communication and knowledge. This was in 2012.

In 2013, they shut down Glitch as it did not set the cash register ringing.

In 2013, they decided to launch Slack as a commercial product to enterprises.

The death of Glitch gave birth to Slack.

Now let’s understand how Slack used innovation within the framework of Buddhist doctrine.

What is the pain point Slack addressed?

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Slack made work look like fun for its employees

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IRC was the most popular tool at that point in time with most organizations. Being regular users of IRC themselves, the team knew both the upside and downside of IRC.

They also came from a gaming background, so they knew exactly how to design a product that would make repetitive tasks fun, engaging and addictive within an organization – because, this was the core value on which all gaming products in this genre were built.

What was the origin or source of pain?

The paradox of productivity tools in the context of organizations is that most users of these tools find it a drudgery to use the tool, notwithstanding that they are supposed to enhance their productivity! Slack on the other hand made work seem like fun!

And the bonus was that using Slack left employees with more personal time. In fact their tagline was: Be less busy!

How did Slack put an end to their customers’ pain?

Their tagline said it all. Be less busy. Which meant the end users who used Slack had more time on their hands, thanks to the productivity-enhancing capability of the tool. And it wasn’t just that it gave them more time for fun, using Slack itself was fun!

That was the gaming stickiness that Stewart brought to the product and made it the runaway success it was. And this was a complete win-win for Slack’s enterprise customers who saw how Slack contributed to their bottom-line!

What did Slack do to avoid pain?

Having had the painful experience of shutting down Glitch, Stewart and his team wanted to ensure that once the end users got hooked on to Slack, they in turn would ensure that their organizations subscribed only to Slack.

As one enterprise customer said: it looks good, feels right and search works!

Let’s now understand how Slack ensured that the element of stickiness glued the end users together, within the eight guiding posts of Buddhism...

Ease of use. Fun in-app features. Communication in topic-based ‘channels’. Internet relay chat that allows collaborators to tag each other in conversations. And yes, interactive video calling that allows users to approve budgets and evaluate job candidates with the same ease and fun as browsing flights — within the app itself. Not just the right view, but a panoramic one at that!

The way Slack has gone about achieving user stickiness hits the bullseye on right thinking. Leveraging its ‘freemium’ pricing Slack offers an ‘easy-to-sign-up’ free version of its platform. It packs a lot of value into this offer and lures its users by sheer love of its features. So much so that over time, many willingly opt for the premium model!

“We want to get the annoying, friction-filled stuff out of your workday,” Slack’s VP could not have nailed the right speech better. And they are not just words. Slack’s ‘Wall of Love’ has its users falling in love with it. It effortlessly engages people and keeps them actually engaged in work conversations. Collaboration and team culture are winners by more than a mile!

Customer stickiness happens when the right words are backed by the right actions. Slack doesn’t stop with the pride of its technology-driven exceptional user experience even for the least tech-savvy person. It has invested in a large customer experience team across the world so that users can always talk to a human.

Slack’s full page ad as a message to Microsoft in response to their release of Microsoft Teams as a ‘clone competition’ of Slack was a brilliant marketing move, no doubt. But it also reflected their philosophy of right livelihood. “Communication is hard, yet it is the most fundamental thing we do as human beings. We’ve spent tens of thousands of hours talking to customers and adapting Slack to find the grooves that match all those human quirks,” said one line.

Slack has demonstrated the right mindfulness in listening to customer feedback. They have continuously rolled out new product improvements and remained on top of innovation to stay ahead of the competition curve and on the cutting edge. That is how it has replaced the email, instant message and chat with its platform. That is also how it brought in Enterprise Grid to offer separate spaces for different teams, and Shared Channels to connect teams from different organizations to collaborate.

The trust that Slack has built among their users is mind-boggling and is a testament to their right diligence. Without monitoring their usage, customers believe that the company totally safeguards their interest. They actually issue a credit if a company’s active users are less than what they have signed up for.

With an amazing dose of right concentration, Slack has brilliantly positioned itself as a prime business tool – one that its users believe they cannot live without. And by seamlessly integrating across devices, Slack feeds into this belief by ensuring that users never have to be out of touch.

So what is the ‘something new’ and the ‘something different’ in your business? Does it pass the Buddha test?

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