New Zealanders tend to be obsessed with ‘innovation’ when better results could be achieved faster with ‘branding’. Don’t believe me? Look at what Geoff Ross achieved with 42Below. He didn’t invent vodka. Or Rod Drury, with Xero – accounting software existed already. What about Trade Me? Sam Morgan didn’t come up with the idea of auctions, online or otherwise.
‘Innovation’ is just a fancy term for a new idea. And while new things are important, the amount of effort invested in them and the amount of money allocated by government to them, through organs like Callaghan Innovation, is surely excessive. Instead, I’d like to see more attention paid to taking existing ideas, making them better, branding them right and taking them to the global stage.
It’s not like there isn’t ample precedent for branding over, or before, innovation. Take Apple, for example. Apple didn’t invent the portable media player; it just took major strides to perfecting it for the masses with the iPod. Apple didn’t invent the tablet computer – Microsoft did. Apple didn’t invent the mobile phone, either. And it most certainly didn’t invent the watch, or even the smartwatch. It just made all these things simple to use and, through branding, extremely attractive to own. Yes, Apple is innovative, but that imaginative thinking has always been driven by a singular brand idea – to humanise technology. And therein lies the nub - brand leads.
What all these companies, and indeed most successful businesses (see Best Global Brands 2016), have in common is that their singular focus has fallen on improving products with which their customers are already quite familiar.
How is that to their advantage? Other than the obvious margin and shareholder value they create: Apple tops out the Best Global Brands with an estimated brand value of US$178,111m - not bad for a company with essentially no factories.
Part of the trouble with new ideas and whole new categories of products or services is that they are inherently risky. While inventing the next great must-have widget might appear to have the advantage that a whole new market is created – and hence there isn’t any competition – it just isn’t quite that simple. The potential customers don’t know that they ‘need’ your new gadget (or service), so you must get out there and tell them about it. Creating a new market isn’t a simple matter. Your great ‘innovation’ might end up being the next Facebook. It might. But it probably won’t.
It is also fiendishly difficult to come up with a truly new idea that is commercially viable. Even the bible said (in Ecclesiastes) ‘there is nothing new under the sun’. While that could be debated (not in a pub), the sentiment nevertheless holds true.
Which brings us to another structural reality of the New Zealand market. We simply don’t have the scale of other nations. If it is tech innovation, anyone who has been to California’s Silicon Valley will instantly acknowledge the massive disparity in that hotbed of technology when compared with, say, Wellington. Without knocking our ‘best little capital in the world’, there can be no question that the scale is very, very different. The streets of California aren’t paved with gold, but when it comes to innovation and venture capital dollars, it might as well be.
And then you have London, Paris, New York. Even Sydney. It might sound like a fashionable T-shirt, but with the scale of sheer numbers of people and the resources they represent, well, it is hard to match.
This Kiwi preoccupation with innovation over branding means there is less oxygen available for the latter. Just for a moment imagine if more entrepreneurial minds – for that is something New Zealanders have plenty of – were turned towards taking clunky existing things, and making them beautiful and appealing. What we have is the freedom and distance and cultural heritage of doing things differently. We should see a bigger focus on creative ways to adapt, market and build brands; that is the future and that’s what some of our top exports have done.
Take Rockit apples as an example. They most definitely didn’t invent apples, not even red ones, but their simple tube of apples packaging concept made the stalwart fruit all of a sudden coveted and highly attractive. 42Below made a quintessentially Russian drink fantastically Kiwi; and speaking of which, we’ve managed to completely and utterly rebrand the Chinese gooseberry (that’s right: now internationally known as Kiwifruit).
And, I mean, who describes accounting software, of all things, as beautiful?
Rod Drury and Xero. That’s who.