Amy Katz and I spent most of this week at a Penton Senior Leadership Team (SLT) Meeting in New Orleans. Don't ask about the gumbo (where's the shrimp?). But do ask about the discussion. Kurt Nelson, Penton's VP of HR, described how our company (MSPmentor's parent) must continue to execute day to day operations while also innovating. Nelson also mentioned some chatter about the top 10 innovation myths. It got me thinking: Can maturing managed services providers (MSPs) overcome the innovation myths even as they meet traditional daily goals?
Here are the 10 myths along with my views:
Myth 1: Innovation is random: In reality, Harvard Business Review says innovation is a discipline that can be measured and managed. MSPmentor's Spin: Innovation is about finding the time, team and focus to do something new without letting your existing business implode.
Myth 2: Only creative geniuses can innocate: HBR says creativity can help but even if you're not creative you can deliver high-impact innovation. MSPmentor's Example: Microsoft isn't known for being all that innovative but the company certainly deserves big-time credit for innovations like the Xbox Live cloud service. Plenty of MSPs are similarly innovative -- a few are mentioned at the bottom of this blog...
Myth 3: You're either an innovator or you're not: In reality, HBR says innovation is 30 percent nature and 70 percent nurture. MSPmentor's Spin: I think innovators stop innovating when they get bogged down with day-to-day processes. Striking the right balance is a difficult one for all folks, including MSPs.
Myth 4: Innovation Happens in the R&D lab: Let me dispell this one head-on. MSPmentor's Spin: I think a great deal of innovation now happens out in the wild. Think of all the Google services that get tested publicly long before they are released as "official" services. Think of the open source movement. Half-baked innovations become "good enough" out on the Internet while some companies spend too much fine-tuning their innovations for perfection.
Myth 5: We will win with superior technology: MSPs chase this one a lot. They are always seeking the "best" set of software tools. MSPmentor's Spin: Sure, tools are important. But using "good enough" technology in tandem with great customer service and great business processes are far more important.
Myth 6: Innovation is all about improved performance: Let me dispell this one with another simple example. MSPmentor's Spin: What if you could buy a smart phone that's 90 percent as good as the iPhone -- but for 50 percent less cost? Your overall performance isn't better. But another critically important measure -- the price/performance ratio -- is vastly improved.
Myth 7: Our customers will be a critical source of innovation insight: To paraphrase Steve Jobs... Sometimes there's no point asking customers what they want because they don't know. MSPmentor's Spin: The average MSP customer -- a small business owner -- is too busy to tell an MSP about required innovations. But the average MSP receives free trial-offers for new innovations every day. There's no excuse not to find the best innovations that will also drive profits your way. Who within your company is required to research those innovations and make recommendations?
Myth 8: Game changing innovation is only done by entrepreneurs: Sure, sometimes it's easier for entrepreneurs because they don't have any legacy distractions. MSPmentor's Spin: But plenty of mature companies innovate. Intel is struggling now, but had a strong record of innovation for more than three decades. And look at Samsung. Innovation is everywhere at that tech and consumer giant.
Myth 9: We will win by targeting the biggest markets: Here again I can offer first-hand evidence on the contrary. MSPmentor's Spin: We could have created another wide and shallow IT media company. Instead, we went narrow and deep with MSPmentor, The VAR Guy and Talkin' Cloud. Similarly, PSA and RMM software companies could have gone broader and sold into large enterprise accounts. Instead, many of those companies sold only to IT consulting firms, VARs and MSPs.
Myth 10: Innovation requires big bets: During the dot-com bubble, a magazine called The Industry Standard ultimately starved to death on $200 million worth of venture funding. To launch Nine Lives Media (since acquired by Penton Media), our founders made a sub-$50,000 investment -- but we were willing to nearly starve to death with no salary and no income for the first six months. Somewhat similarly, we see MSPs every day making small, targeted bets on their own innovations. The latest example: Dosal Capital is a new-age investment and holding company that focuses on MSP-oriented technologies.
My bottom-line advice
MSPs can continue to run healthy lifestyle businesses by reselling third-party solutions and services. But the most profitable, highest-valuation MSPs will have their own sort of intellectual property. I don't think it requires millions of dollars to develop that IP. You just need to carve out a little bit of time, money, team expertise and focus.
For instance, I suspect the following efforts have not required big venture backing:
- Anchor, an MSP-focused alternative to Box and DropBox.
- JoomConnect, which links ConnectWise to an MSP's website, was launched by Directive -- an MSP.
Innovation is everywhere. But is it alive and well in your company?