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Innovation challenges in laggard markets

A culture challenge

Early this year a Groupon copycat was in my office building: Grupongo.

I don’t know if they exist anymore but they’ve since closed operations in Tijuana. I have no insight into why they closed operations, but I do have an idea since I got to talk to the Regional Sales Manager a few months before.

See, Tijuana is a conservative market. The nature of Groupon, and all its copycats, is that it stimulates randomness. It lowers the barriers to doing things you’ve never done before. This happens easily in markets where diversity exists.

I know, it may sound like I’m assuming. But believe me, after organizing two Startup Weekends and an Animation conference, I come back to the same principle: diversity breeds innovation.

Take Grupongo, who doesn’t like deals? Everyone does. But in some markets, like Tijuana, “it’s too good to be true” usually is. People were using Grupongo. But it was a small size. This meant that these people were early adopters. But not a strong enough group to influence the mainstream.

Another case. Take last month’s Tijuana Innovadora. Did it live up to its expectations? No, because they were giving tickets away to lure people to see Chris Anderson. I don’t know what happened with Steve Wozniak, but the other guests were not seen by as many people as possible. This wasn’t just a communication problem, but of culture.

To drive a city, institution or group towards innovation, you need diversity of thought and action. That only happens if you have people from diverse backgrounds bumping into one another everyday. It is the same reason why places like New York, Boston, Silicon Valley, Los Angeles, Mexico City, Hong Kong, Amsterdam and the like are breeding grounds for innovation.

Technology laggard

For the most part, Mexico is a laggard in information technology adoption in both the public and the enterprise. This means technological advantage in the workforce is stagnant. It also means that ideas that come from outsiders is all but non-existent.

Go to the edge

Innovation doesn’t happen without mass adoption. And you won’t get adoption of breakthrough type ideas in the mainstream. For that you need to go to the edge, where innovators and early adopters live. Not in the mainstream.

technology adoption curve

Bring in the innovators

Want to create the next innovation breeding ground? Take a page out of Chile’s book and pay entrepreneurs from all over the world to come to your city to start businesses. That’s what StartupChile’s mission is. Chile’s leaders understood that to stimulate growth, progress and chance to play a role in shaping the lives of its citizens, they needed to bring in new blood. They understood that to become an innovation breeding ground they needed to turn themselves into an international business hub. That meant making room for new ideas from different parts of the world.

What did Chile do to make this happen? They lowered the barriers to entry for entrepreneurs.

The question remains, how can conservative markets turn into innovation hot spots without changing their structure?

Is reverse innovation the answer?

They jury is still out on whether or not a low-cost, focused solution is for everyone. Will people in a conservative market adopt the same solution as people in emerging markets? There evidence that it may work but I think we are still in the initial stages of this strategy.

Is open innovation the answer?

The rise of social networks in the workplace can help drive innovation because people can collaborate with other people from around the world. Not just internally. But, for businesses of all sizes the obstacles are transparency and a willingness to do things differently. If people are not using social networks for anything other than communicating with friends and family, we aren’t moving towards a collaborative future. And that means stagnant organizations.

The Point: Even with diverse cultures innovation isn’t a done deal. As you know, many things have to be in place for innovation to happen. But it is a better strategy to go to the edge than rely on the mainstream. The edge means trying stuff no one else is willing to try and push everyone forward.

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