In today’s world, everyone needs to innovate to stay competitive, whether you’re a corporate executive, small business owner, freelancer or professional. Innovation is no longer an option – it’s the price of admission into the business world. In this article, Steven Hoffman explains how you can implement the same methodologies and processes as the most innovative startups in Silicon Valley.
Many people believe that to innovate, you need to think big. If you’re the head of a large corporation, you must implement a massive innovation program that encompasses your entire organization. Everyone must be on board. Money should be no object because this is the future of your business, and the next billion-dollar revenue stream will come from innovating.
Nothing could be further from the truth. To truly innovate, you can’t think big. You need to think small. Most big innovation projects fail. They fail precisely because they require big budgets, big teams, and big results. When innovating, it’s often the smallest ideas that have the power to change an industry. Think of the Post‑it note, Velcro, or disposable razors. These are all simple ideas that revolutionized their industries.
In hindsight, sticky paper seems like something so basic anyone could have thought of it. But no one did. In fact, the whole thing came about because of a mistake. A scientist at 3M, Dr. Spencer Silver, was attempting to develop a superstrong adhesive. However, he accidentally came up with a “low-tack,” reusable, pressure-sensitive adhesive. For the next five years, Dr. Silver tried to get 3M to make a product using his invention. But no one cared until a colleague, who had attended one of his seminars, came up with the idea of using this new adhesive to anchor his bookmark in his hymnbook. This series of little insights is what led to Post‑it notes.
If you look at the process by which most great innovations happen, the path isn’t that different. Great ideas typically don’t come from big visions but from small experiments and chance discoveries. The big visions come later, when the story of their discovery is rewritten in the media and the minds of the public.
The same holds true for tech startups. Let’s take an example with which we’re all familiar. YouTube didn’t start out with a grand vision of building a new global broadcast network with millions of videos, creators, and viewers. YouTube was originally something entirely different. It began life as a video dating site called Tune In Hook Up, a copy of Hot or Not with video. When that experiment failed to gain traction, the founders began casting about for other ideas.
The spark didn’t come from a world-changing vision but from two small frustrations. First was when Jawed Karim, a cofounder, became irritated that he couldn’t find video of Janet Jackson’s “wardrobe malfunction” online. The second was when Chad Hurley and Steve Chen, the other cofounders, got annoyed at not being able to share videos of their dinner party with friends due to the limitations of e‑mail attachments.
The combination of these two small frustrations gave birth to YouTube as we know it. The key insight was that people needed a simple way to share videos online. Once they built a simple mechanism for sharing videos, everything else followed. Within a short time, several videos went viral and YouTube’s traffic exploded, making it the destination for video content.
The emergence of YouTube as the world’s number one online broadcast network wasn’t the result of a grand vision or plan but a small innovation that produced an enormous effect. I would even go so far as to argue that if the founders had set out to build a broadcast network, they would have never succeeded in creating YouTube. Just look at the history of startups, like Digital Entertainment Network, which wanted to bring TV‑style programming to the Internet in the dot-com days. They tried the big-vision approach and failed. It was too expensive to produce the content, and the ad model wasn’t there.
It’s a common mistake many startups make. For example, I was working with a company from Taiwan that wanted to create a universal app that would unlock any smart device, from smart bicycle locks to automobiles, doors, and filing cabinets. They knew they couldn’t charge for this, so they were preparing to give it away for free and build a social network within their app. They wanted to partner with everyone from automobile to IoT manufacturers. To complicate matters, the devices required specific hardware to work, which everyone would have to adopt. I could see there was no way they were going to get something this big and complex off the ground with their approach.
I told them rather bluntly, “You have to think small. Pick one customer that highly values your solution and focus on that.” I suggested they target companies that valued security and sell them a security solution that would allow them to control access throughout their organization to all critical access points, including doors, desks, filing cabinets, and storerooms, with a single smartphone app. They could charge for the service based on the number of smart locks deployed and provide added-value services. This was far simpler than their original plan, had a single customer type, and clear revenue model. It’s still too early to tell if their pivot will succeed, but
I’m keeping my fingers crossed.
Whether you have a three-person startup or a three-hundred-thousand-person multinational corporation, the process for innovation is similar. You need to create an environment and structure where teams can think small.
As I mentioned, I’m writing this book for everyone from startup founders to managers in large corporations who want to innovate. With this in mind, it’s important to talk about team size. Most startups begin with small teams, because that’s all they can afford. It’s usually just the founders and a few part-timers. Corporations, on the other hand, have the luxury of assembling large innovation teams from the get‑go. That is a big mistake, and I’ll explain why.
From my experience both running Founders Space and consulting for global corporations, I’ve found that the ideal team ranges in size from two to eight people. This is because smaller groups collaborate, communicate, and cooperate better and more intimately. They can bond in a way that’s
impossible for larger groups. With a small team, everyone knows everyone, understands each other’s strengths and weaknesses, and can form deeper relationships. This all leads to better teamwork and more intense collaboration.
Inversely, the larger the group, the more careful and guarded people tend to become. I even find myself editing what I say in front of larger groups. I don’t want to make a mistake and appear stupid. We’ve all been in these situations where communication grows more formalized, with fixed schedules, structured meetings, a web of complex interpersonal relationships, and roles for each member. The entire process changes from individual to group dynamics.
Our desire to fit into social groups is ingrained in who we are and how we act. It’s impossible for most people to behave the same in a large group as they would in a small one. As the group size changes, members’ psychology adapts to the new structure. Big groups tend toward hierarchical structures, which are ideal for organizing and directing larger numbers of people, but they’re not the best for unleashing creativity and free thinking that might upset the order of things.
The smaller the group, the more egalitarian the structure. With intimate teams, people are naturally more inclined to act as partners, rather than leader and followers. This dynamic is essential for innovation. To be creative, people need to collaborate deeply and share ideas openly. With smaller groups, this becomes easier for everyone — especially those who are shy, introverted, or cautious.
Another reason small teams work better is that when a team has more than ten people, things slow down. Larger groups simply can’t move as fast, especially when testing new ideas. Innovation requires rapid iteration, where the team needs to reach decisions quickly without continually excluding or alienating a portion of its members. From my experience, the key to successful teams is a structure whereby all team members can fully contribute to the process. However, the larger the team the more difficult it is to give everyone a voice. Just try getting a dozen people in a room to agree on anything. It can be painful.
Voting on the best ideas is one way to give everyone a voice, but it doesn’t necessarily allow or encourage others to contribute fully. Voting often brings out divisions inside the group, with certain parties being consistently voted down. The result tends to be factionalism, and the last thing you want is an innovation team splintering into factions, where politics take over the process. Another potential downside to voting is that some members may go along with the majority decisions, even when they don’t agree, simply because they want to avoid alienating others.
An alternative for large teams is a hierarchical structure with the leaders choosing the best ideas. But unless the team leader is skilled at giving everyone a voice, this won’t promote true collaboration where everyone on the team feels equally empowered to contribute their ideas and share in the decision-making process. What you typically wind up with is a small number of people actively innovating, while the rest of the group follows. The larger the group, the smaller the percentage of people involved in the innovation process, which defeats the whole purpose of forming innovation teams.
No matter what the structure, the ideal innovation team should be an intimate group where everyone actively contributes to the process and participates in the decision-making. Jeff Bezos, one of my heroes, summed it up with his two-pizza rule: If a team can’t be fed with two pizzas, it’s too big. I’m a big eater. I can eat half a pizza by myself, so four people like me is all you want!
Steven Hoffman is the Captain and CEO of Founders Space, where he has educated and trained hundreds of startup founders and corporate executives in the art of innovation. He has tried more professions than cats have lives, including serial entrepreneur, venture capitalist, angel investor, mobile studio head, computer engineer, filmmaker, Hollywood TV exec, published author, coder, game designer, manga rewriter, animator and voice actor. His book Make Elephants Fly is available now.