A version of this article was originally published by Knowledge at Wharton
When Guy Kawasaki talks about business innovation, he brings more than 25 years of major-league experience to the conversation. After getting a psychology degree at Stanford and an MBA at UCLA, the Hawaii-born Kawasaki became the second software "evangelist" at Apple Computer, where his job from 1983 to 1987 was to convince people to create software for the Macintosh.
After leaving Apple, Kawasaki started his own companies in addition to becoming an author, consultant and venture capitalist. His books include "The Macintosh Way," "Rules for Revolutionaries," "Selling the Dream" and, most recently, "Reality Check." Now 54, Kawasaki listens to pitches from start-ups regularly at his venture capital firm, Garage Technology Ventures. Its portfolio includes technologies ranging from logistics outsourcing to renewable energy.
Here is a summary of Kawasaki's 10-point manifesto on how to make something of value for customers.
1. Make meaning, not money. "As venture capitalists," Kawasaki says, "we deal with many companies, and often they come in (saying what) they think we want to hear: that they want to make money. It's been my observation that most companies founded on this concept of making money pretty much fail. They attract the wrong kind of co-founders and early employees." Entrepreneurs should focus on making their product or service mean something beyond the sum of its components -- and the money may very well follow.
2. Make a mantra, not a mission statement. Bland, generic company mission statements serve no one but the consultant brought in to develop them, Kawasaki says. Instead, keep it short and define yourself by what you want to mean to consumers. Nike stands for "authentic athletic performance." FedEx is about "peace of mind." To get everyone internally and externally on the same page, explain why your organization exists and how it meets customers' needs and desires.
3. Jump curves. Innovating is harder than just staying a little bit ahead of competitors on the same curve. That's easier in some businesses than others. Kawasaki notes how in the days before refrigeration, the ice industry consisted of ice harvesters in cold climates using horses, sleighs and saws to collect ice outdoors during winter months. Ten million pounds of ice were shipped in 1900 that way, he says. Then came "Ice 2.0" -- factories that could freeze ice anywhere and an ice man who would deliver it to establishments and homes. Finally came "Ice 3.0": home refrigerators.
Of course, none of the ice harvesters got into the ice factory business, and none of the factories got into the refrigerator business. That's because "most organizations define themselves in terms of what they do," he says, "instead of thinking 'what benefit do we provide the customer?' True innovation comes when you jump curves, not when you duke it out for 10 percent or 15 percent better."
4. In product design, "roll the DICEE." That's an acronym. "D" is for deep, which to Kawasaki means thinking about features that go beyond the norm. "I" is for intelligence, as seen in the design of Panasonic's BF-104 flashlight, which uses batteries of three different sizes to accommodate the random mix of extra batteries many people have around the house. "C" is for complete -- or being not just a product, but including support and service. The first "E" is for elegance: Beauty matters, according to Kawasaki. "The second 'E' is for emotive. Great products generate strong emotions: Think Harley Davidson, Macintosh."
5. Don't worry, be "crappy." This doesn't mean ship a bad product, but "your innovation can have elements of crappiness to it," Kawasaki says. Twitter has a litany of flaws, but it is changing people's habits.
6. Polarize people. Try to be all things to all people and you often ship mediocrity, Kawasaki says. The boxy Toyota Scion xB looks ugly to some people but very cool to its devotees. TiVo became popular while maddening the advertising industry.
7. Let 100 flowers blossom. Borrowing from Chairman Mao, Kawasaki says you never know where the flowers will emerge, so let them grow. Innovations may attract unexpected and unintended customers. Rule one, he said, is "take the money. Rule two: Learn who's buying your product, ask them why and give them more reasons. That's a lot easier than asking people who aren't interested 'why not,' and trying to change their minds."
8. Churn, baby, churn. Always improve. Listen to customers for ideas. That's difficult, Kawasaki says, because an innovator or entrepreneur must often ignore the advice of naysayers and "bozos" who say it can't be done. Once it is done, and the product reaches the hands of customers, it's time to start listening to their feedback. "Once you ship, then you flip," Kawasaki says.
9. Niche yourself. Find your place, Kawasaki urges. He shows a simple X-Y graph, with the usual four quadrants mapping the variables "Uniqueness" and "Value." A product or service does not need to be unique if it delivers value. That, he said, is how Dell won market share selling computers. In the upper-right quadrant were high value, unique products and services. They included the online movie-ticketing service Fandango.
10. Follow the 10-20-30 rule when pitching to venture capitalists. That means no more than 10 PowerPoint slides, a limit of 20 minutes for the pitch, and using a 30-point font size in the presentation (to keep it simple). The goal of such pitches isn't to walk home with a check, he says, it's to "not be eliminated" from consideration.
Kawasaki added one bonus point for innovators -- and a mea culpa. "Don't let the bozos get you down," he says. Ignore them, Kawasaki says. Nevertheless, he admits he was a "bozo" himself once. In the mid-1990s, he was offered a chance to interview for the CEO position at Yahoo. He declined. He saw the Web as just another thing to do with a computer modem, and a Web index as having limited value. "By my calculation, this decision cost me $2 billion."
