Attract so many customers

My second source will be an investigation into the entrepreneur Thomas Pellereau, the recent winner of the reality TV show ‘The Apprentice’. As the winner, he was offered a 50:50 partnership deal to go into business with Lord Sugar, who would provide an initial investment of £250,000. But before setting up this business with Lord Sugar, he has been through an arduous process to prove his entrepreneurial capability. So what entrepreneurial skills has Tom demonstrated?

Tom Pellereau is an innovator (not an inventor). The difference between innovation and invention is slight but significant. Invention is the discovery of a completely new idea (for example, designing the first TV would be an invention) while innovation is the improvement or transformation of an existing idea (like plasma screen TVs). In practice, this means that Tom discovers flaws in some existing products and redesigns them to make the product better, before bringing the new product to market. An effective innovation can be as profitable as an invention, because if an innovation is significantly better than the previous version of the product, the previous product may be phased out and the innovation can ‘steal’ a large portion of the original market (LCD and Plasma TVs have almost completely replaced cathode ray tube TVs).

However, Tom’s products have often failed to hit the mark. Some of them were branded as ‘failures’, which was disappointing for Tom to say the least. There are also risks associated with innovations, as sometimes they may just not be popular. However, Tom still drove onwards, motivated by his passion for innovation, and eventually succeeded. His determination throughout his innovating career has been essential to his success. Had he given up earlier, he would not be in the position he is today. In Tom’s case, drive/determination was an essential skill.

Innovation is a skill that stems from creativity, the ability to create new ideas. Creative ideas and innovations may appear in a ‘flash of inspiration’, often after the innovator has used and found a fault in an already marketed product and tried to fix it with their own innovation. Tom’s creative flair allowed him to conceive many new innovations which were very popular when brought to market: an improved and product has a competitive advantage over its rival products.

For example, Tom’s ‘Stylfile’ product, a nail file, was created by his innovation. Instead of the traditional flat edge of a nail file, he innovated and came up with a curved nail file, to suit the shape of the nail. This gives it a competitive advantage over other nail files, because it performs better. Creative, innovative ideas, such as these created by Tom, are much more likely to succeed in a competitive market than a product which is just the same as all the other rival products. Tom claims that he ‘finds gaps in the market and finds products for those gaps’. [3]

Tom’s creativity really shone in ‘The Apprentice’, where he was continually praised for his ability to come up with new ideas. For example, he came up with the BixMix biscuit idea, of two biscuits mixed together and chocolate on one half of the biscuit. It was a novel and innovative concept, failed only by the team’s inability to create a good taste. However, it was a clear show of Tom’s innovative capability. He also objected when the idea of ‘Every Dog’ was suggested, as the target market was too general and there was no USP/competitive advantage. He was later proved right when the product was rejected.

After Tom was selected to participate in the final, he came up with yet another creative idea for his potential partnership with Lord Sugar. This time, he came up with office chairs, which could help relieve back pain. While this was a concept which had already been thought of, Tom’s product took it one step further, by being able to detect whether the user may suffer from back pain in the future. This additional function helps prevent back pain and could be an innovative edge over other, similar products.

It is clear that Tom’s main entrepreneurial attribute is creativity. All ideas stem from creativity, and ideas and innovations are essential for business. In Tom’s case, without his creativity, he would not have been an entrepreneur, as his innovations have dominated his whole entrepreneurial career. The other major skill which Tom has shown is drive/determination. He has continued to innovate and create even through difficulties and failures, which is an admirable quality. It shows that he is prepared to learn from mistakes and try again and again until he succeeds.

I have attempted to contact Tom with a questionnaire but have received no reply thus far. My third source will be an internet source (study entitled ‘Entrepreneurial creativity and innovation’). [4] This study emphasizes the importance of creativity and innovation as a part of enterprise, and therefore also for starting and running a business. In the study, the author recognizes that creativity and innovation are ‘central to the entrepreneurial process’. The study investigated into small enterprises and asked them questions to collect primary data. Here are some of the results:

1. Notably, out of the thirteen owners of small enterprises who took part in the first phase of this study, only one said that his business offered more of the same, and even the individual in question said that he was ‘always trying to design new products … always trying to create something new’. This suggests that creative ideas and innovations are very important to small enterprises, because they need to have a competitive advantage over their rivals.

2. Another entrepreneur remarked: ‘Having new ideas is very important, if you’re going to be like everyone else, you’re just going to fall in with the rest of the crowd’. This is very true, because in the competitive world of business, rival businesses will be splitting the customers, resulting in lower numbers of customers and less profit, or even a loss. New ideas can be developed, and if viable, can be a valuable competitive advantage that makes your business stand out from the rest. 3. In addition to the qualitative data from the first phase of the survey, there was also quantitative data from the second phase. 89.5% of entrepreneurs surveyed said that new goods or services that they launched were generally successful (see chart below):

Clearly, new, innovative products or services have an excellent success rate (nearly 9 out of 10). This indicates that an USP or competitive advantage is very important, because the product or service will either have a totally new edge which is likely to attract customers, or be able to perform better than its competitors. Hence, these new goods or services are generally quite successful. My fourth source is an investigation into Apple. Apple is now one of the biggest electronics companies in the world, selling a range of products from the iPhone to the iPad. Many of these products are innovations, which have revolutionised the electronics world.

Steve Jobs and Apple have shown great creativity in designing their products. For example, the iPod is a multifunction device, mixing many things that were already available. It was not a new invention, because all of its functions were available before its arrival. Yet it was a massive success, because it was innovative, putting many of the tools that a consumer needs into one device, and bringing it into market. Their research groups found out what people needed, and presented it in their own, unique product. This creativity, the actual creation of the idea, was the root of the greatly successful iPod. But Apple have not just relied on this one product. They have also innovated many other products.

Perhaps even more notably, the iPad is a total innovation of the tablet computer industry. Before the iPad, despite the technology having been invented, no company had been able to take advantage of it. Apple saw the opportunity and pounced on it, carefully designing the tablet so it would be pleasant to use and capable, unlike the predecessors in this industry. They succeeded and made a massive profit, tapping into the full profits of an almost untouched industry. Apple is arguably the most creative and innovative company in the electronics industry. Apple continue to innovate their products to be unique for customers, which is why they attract so many customers.