What WeWork and SoulCycle Missed: The case for brand-driven innovation
A strong brand is a company’s most important asset. Yet, brand rarely takes a leading role in innovation. Why leave it on the sidelines?
In our over-stimulated, under-reasoned world, brand, in fact, is your competitive advantage. Innovation that considers brand from the get-go opens up opportunities of disproportionate growth and social currency.
When innovation is designed to pay into your brand’s equity and your brand, in turn, powers innovation, a robust cycle of growth emerges — with brand as your multiplier. I call this brand first innovation.
Three ways in which brand first innovation can help your business.
1. Innovate from a place of strength to own markets ahead of new competition
When we think of large corporations with broad brand portfolios, the first role of brand first innovation is strategic. This is important as, all too often, corporate innovation develops innovation frameworks and concepts based on business strategy, trends and emerging technologies without leveraging the unique strengths of individual brands.
A brand’s positive equity provides an important edge. Use it to take on new markets you can easily own before new players will have the time to establish themselves.
Think of SoulCycle, a company that took fitness to new “highs” with a brand experience of spirituality, a healthily addictive product and a community of believers. It seemed unstoppable. Yet, it did not innovate for moments outside of the studio until new and fierce marketer Peloton was well on its way. Parent company Equinox recently announced the sale of home bikes but it is without a doubt that it missed the chance to outright own the connected home cycling experience. With its late market entry, business success will even more so now depend on how well the experience of soul finding translates at home.
Similarly, brand first innovation would have made Quaker enter the oat milk market earlier and more meaningfully. Many years ago, we identified this opportunity for the brand, one of America’s most trusted. Most of Quaker’s new products then were still about tasty convenience targeted to moms and kids. Too few addressed the increasing natural health and wellness orientation of young adults in a relevant way. Through research, we revealed an unparalleled natural goodness equity and an enviable degree of brand awareness. Both provided great leverage to attract young adults. At that time, we also saw oat milk emerging in the steadily growing milk alternatives market. Quaker was perfectly positioned to lead the growth of oat milk in the U.S. yet left it to Oatly to take the market by storm. According to Bloomberg on July 31, 2019, Oatly is now on its way to “alt-milk world domination” while Quaker just announced the discontinuation of its Oat Beverage less than one year after launch.
2. Identify the emotional opportunity to create loyalty from day one
Much of industry disruption happens by innovating new business models or applying better business models to traditional markets and old ways of doing things. From Uber to Rent the Runway to AirBnB, we look at these businesses as market openers based on technical feats. This is true, though first movers are not guaranteed prime position forever, and fast followers follow — well, fast.
Brand can help you find the emotional opportunity in the market. Applied effectively, it lets you motivate people to adapt new habits and leapfrog inertia.
Leaders are taking note. Re-evaluating the Lean StartUp Method, (“What the Lean Startup Method Gets Right and Wrong”, Harvard Business Review, October 21, 2019), Ethan Mollick, Assistant Professor of Management at The Wharton School of the University of Pennsylvania, appeals to entrepreneurs to not simply listen to customers but to have vision and make their businesses “special”.
What makes your business special is brand, and not the smartest data set or technology can create it. It takes a person or a team with great foresight and originality to birth a brand — the emotional value proposition that triggers in people the desire to belong and engage.
ElleVest, an investment platform for women, and Sallie Krawcheck’s mission to close the gender investment gap is a great example of that. Taking on real white space in the market, the company builds engagement through the idea of empowerment and an incredibly witty personality right for the cultural moment of today.
3. Innovate where it matters most to drive tangible business success
One could say that WeWork used its brand mission “Create a world where people work to make a life, not just a living” to guide the development of new businesses, such as WeGrow and WeLive. The take away from WeWork’s fast fall though, is that brand first innovation is not about innovating new businesses by mission statement or manifesto. Brand first innovation is about making smarter investment choices. It’s about focus.
Before deciding to branch into new markets or audiences, ask yourself: Is my existing brand experience optimal? Whom do I lose in the journey from awareness to loyalty? What do I need to solve for them?
In this quest, investigate deeply to find the unarticulated needs that hide great opportunities.
FreshDirect, the OG of online grocery, uncovered that competing for a share of wallet today didn’t simply mean a race to faster delivery times. It meant delivering a better shopping experience for a new kind of urbanite for whom food had become a lifestyle. Pairing amazing food credentials with a highly curated, daily fresh assortment and editorial-style content, the new brand FoodKick by FreshDirect inspires food shopping and makes it enjoyable for modern food lovers.
As we enter an era in which profitability is no longer accepted as a distant goal for start-ups and fast-growing companies, brand thinking can provide the necessary clarity for capturing opportunities that create authentic, sustainable business success.
Whether entrepreneur or intrapreneur, don’t innovate without brand. Make brand your engine for innovation as well as its runway ready for take-off and safe landing.
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