business

You can find a good amount of misconceptions hanging around, boosted by icons like Steve Jobs and Mark Zuckerberg, that you should be in your 20’s, and include a rigorous way of thinking and a huge ego. So when we talk about Entrepreneurial DNA – what’s yours?

But, as outlined by a comprehensive study carried out by a startup incubator, these people are merely outliers.

Smart companies used to go to great trouble to build their reputations – literally. They’d build plush and cozy branch offices that practically radiated that invaluable commodity, trust.

Then came other tools – deploying armies of smooth-talking salespeople to play golf with the clientele (and to smooth over any problems) or broadcasting hours of online language development and reassuring television commercials.

If none of those tactics reached the customer, the customer could literally reach for the product itself. Trust was easily built and tested at every step.

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What do you think would happen if you took 10% of your advertising budget and invested it in customer service? Your immediate reaction might be to think that whilst it’s a nice idea, it’s too risky to cut an advertising budget that doesn’t quite go far enough already. No Marketer in their right mind would willingly give up some of their budgets anyway, right?

I’ll be honest, I’d be a little nervous making that suggestion to my Finance Director too. But let’s just play out the thought process here:

• It’s often cheaper to retain an existing customer than it is to acquire a new one. This makes sense, as you already have the customer, you’ve just got to keep them happy. Yet, so many companies focus more on finding new business and playing the tricky – and costly – game of trying to convert prospects

• Look at your current promotions. They’re aimed at new customers right? Sign up and get 5000 free minutes of phone calls. Transfer your account and receive a $100 bonus. When you’ve been a customer of a business for several years, how do you feel when you see a better deal being offered to new – and sometimes brand-hopping – customers? Shouldn’t you be rewarding loyalty in your customers instead?

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So it’s an equal playing field after all. Companies in mature industries can be just as creative as startups, according to a new study conducted by professors from Boston University and Harvard Business School. In “How Innovative Activities Change as Industries Mature,” Boston’s Anita M. McGahan and Harvard’s Brian Silverman analyzed the patent applications of publicly traded U.S. companies from the early 1980s to the mid-1990s.

They found innovation doesn’t decline with age. Using algorithms, the study identified an average of 75,000 to 100,000 patents per year per industry, which includes manufacturing, agriculture, transportation, retail, financial services, entertainment, and business services. This doesn’t change when you throw in “emerging industries.”

“The results surprised us a great deal at first because conventional wisdom has us believing that new companies are more creative while older companies don’t have the incentive to be as innovative,” McGahan says. The study also found that industry leaders can be “displaced” no matter how many patents they hold.

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