When we talk about startups and entrepreneurship, innovation has been one of the buzzwords that we can not avoid. Many aspiring entrepreneurs keep asking me if innovation is a mandatory ingredient for business success. There are also a few business owners who often wonder why they are struggling to get a foothold, despite having a highly innovative product or service to offer.

To understand this, we need to go back to the basics. What is innovation? Most often, we confuse innovation with creativity. While creativity is all about introducing the new, innovation does not necessarily mean the same. Innovation is not only about new devices, ideas, or methods, but also about new ways to do the same old. While creativity has no bounds, innovation is limited by the boundaries of feasibility.

Whenever we start a new business, offering a pre-existing product or service, it is critical to establish USPs (Unique Selling Points). These USPs establish the value that our business brings to the table and guides our customers with the rationale of why they should choose us over those who are already in the same line of business. This is where innovation has a major role to play. Innovation helps anticipate market needs more quickly and uses them as opportunities. Resolving them, even with an existing product, service, or technology helps us stay ahead of the curve, while our competitors are still figuring out ways to react to the shifts. It is the best way to differentiate ourselves in the competition.

However, one needs to be cautious about applying over-creative solutions. We should have a keen eye on the maturity of the market before we put new solutions into effect. If the target audience is not ready to accept the creative solution, we may be too ahead of the curve and lose out. These are quite frequent in the recent trend of technology-driven businesses. In many situations I find talented entrepreneurs with urban backgrounds trying to solve a problem of the rural market, but not spending enough time in villages to understand their outlook. The businesses fall flat, not because the solutions are faulty, but because of a sociologically infeasible approach.

I feel innovation is extremely critical for any company, especially in the highly competitive and dynamic environment today. It provides an edge over the competitors while giving us the much-required boost of growth. Even minor improvements go a long way in defining success. But at the same time, we need to be cautious about where we should draw the line.