It’s been said before, but I genuinely believe there's good reason why the greatest innovation always happens in a downturn. In good times people rarely rush to fix something that doesn’t appear to be broken.
That makes 2009 an exciting time for entrepreneurs able to service a need for change. And for that reason the timing of an event this week, entitled ‘Entrepreneur Country’, is very interesting. The event, which LEWIS PR is partnering with, is being organised by Julie Meyer, the founder of First Tuesday and now CEO of Ariadne Capital.
The event is taking place in London and brings to town a showcase of start-up talent who will be presenting their ideas to an audience of peers and industry experts. Keynote speakers will include Gerry Ford, founder of Caffe Nero, Roman Stanek, founder of Good Data, Sir Paul Judge, chairman of Schroder Income Growth Fund, Glen Manchester, founder and CEO of Thunderhead, Meyer herself and Ed Wray, founder of betting exchange Betfair.
For me, Betfair best sums up the point I made at the start of this post about the value of innovation.
Wind the clock back nine years and sports betting was a sometimes-shady business presided over by middle-aged men in sheepskin coats whose offices were smokey high street 'turf accountants'. The business was at best exclusive at worst corrupt and ailing.
However, the internet and Betfair more than any other company, rearchitected the entire sports betting industry, attracting new customers and bringing a reassuring degree of accountability and transparency to transactions.
Betfair's success was emblematic of the kind of fresh thinking and innovation needed to turn around the fortunes of any industry when it hits the rails. When business, economies and industries slow down change must be dramatic and decisive, not ponderous and piecemeal.
If you need to know just how divergent a tangent that could mean, consider Betfair isn't even a bookmaker, it's an exchange. They also offer casino games. The level of innovation required to elevate the industry to new levels of revenue generation was light years ahead of a new sheepskin coat, a greater variety of snacks behind the shop counter and a few fruit machines on the shop floor.
The kinds of internet businesses springing up couldn't have been more different to the old guard whose territory they were muscling in on - bright, young minds with a focus on cutting-edge technology. The kinds of connections they counted on were as much the broadband connections in homes up and down the country as those within stables and yards. Betfair, also Blue Square, broke up the hegemony of trackside and high street and made betting a more attractive hobby anybody could take part in from the comfort of their own home or office. This forced wholesales change at traditional bookies who had to prioritise their own web strategies and pretty soon the industry was a very different place. By 2005 the online gambling industry had grown from nothing to £660m in the UK alone. It is predicted to hit £1.6bn next year.
So what this tells us is that the businesses who take us out of this recession and who thrive on the other side will be the businesses able to do something different, not those who simply hunker down or make superficial changes.
That means where innovation is concerned the largest businesses, with the turning circle of the QE2 have more to do than smaller, more agile businesses.
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