The ultimate objective of any innovation is to transform business and transform lives. How do you know if your innovation is of that transformational kind? Here are my definitions that I use for the different stages/types of business:
- If you charge for undifferentiated stuff, then you are in the commodity business.
- If you charge for distinctive/differentiated tangible things, then you are in the goods business.
- If you charge for the activities you perform, then you are in the service business.
- If you charge for the time customers spend with you, then and only then are you in the experience business.
- If you charge for the benefit customers (or “guests”) receive as a result of spending that time, you are in the transformation business.
I would argue that to win in the market, you need to aim your innovation efforts towards creating a transformational business.
- Which business type are you operating under?
- What innovations would you need to create to re-define your business?
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