Keeping Up With Innovation

As I’ve mentioned before, in my day job I deal with high end enterprise IT for very large corporates, banks and government.  Specifically, I focus on the transformation that’s happening in the data centre space and with workloads moving to the cloud.

Wake up!  I know just mentioning that probably bores you, but I’m going somewhere with this so pay attention because there will be a quiz later.  Ok, there won’t be a quiz, but pay attention anyway.

That topic is really dynamic as you might imagine and the word “transformation” probably gives away that things are changing in that space.  Cloud has been an incredibly disruptive force.  It goes a bit further than what Amazon are doing with AWS or Microsoft with Azure, it’s a much deeper level of disruption.

In the twenty years I’ve been working in this space the internet has changed most things, but what we’re now seeing is a massive shift.  The data centre and back-end IT infrastructure has always been very expensive.  Deals are commonly in the millions for server, storage and network gear – one bank I deal with are doing a $30m proof of concept on an idea at present.

The Shift To Commoditization

The way that cloud infrastructure works is by scaling out via swarms of low-cost servers with onboard storage and software running across those entire stacks to balance the computing and storage load.

That might sound like a fair amount of meaningless nonsense, but I assure you there’s a good lesson for you in here about your business, so stick with me.

Basically, we’ve entered the era of software.  Hardware is commoditized to the point where it is largely interchangeable and no longer a significant differentiator for the companies that make it.  In fact, two of the largest server makers in the world get their servers from the same company at the same factory in China.

But software changes everything and it accelerates the race to the bottom on the price of the underlying hardware platforms… Unless you can innovate and add additional value.  Move higher up the food chain.

I see this every single day, with every single vendor, in every single customer.

Remaining Relevant To Your Customers

To be relevant you now need to understand what outcomes your client is looking for and your job is to not just sell them the latest widget, but help them achieve their desired outcome.

I know from the wide range of Casual Marketers that I talk to that this is a message that resonates with you.

And this is where keeping up with innovation is vital.

Back in 2011, we ran an SEO business. Life was magical for us. We could buy a few tools, get some crappy spun articles created, fire up the automation software and generate 50,000 backlinks an hour. If we really needed to push out some links, we could spin up some virtual machines and scale out. One time we pushed 250,000 links an hour for the better part of a day.

With this kind of system, we could take a new site to the top of Google for just about any keyword aside from maybe the top 10 or 20 percent most difficult keywords where SEOs were pushing millions of links per hour.

Then Google started talking about quality and backed that up with the release of their Panda algorithm. Panda looked at on-page SEO quality indicators.

Staying Ahead In The Innovation Arms Race

We knew that the writing was on the wall for this kind of business. We immediately pivoted and started focusing on building a high-quality content creation business. Our content business was a very early player in that market – where everyone else was hiring writers for less than one cent per word, we were charging nearly ten times that. More importantly, our stuff was written by professional, English-speaking writers.

We got the jump on the market because we saw a disruption coming and innovated. We kept our SEO business and started focusing on things like private blog networks and helping people properly structure their site for search. We also hiked our prices for this service as well.

The content business was relatively new, doing something unique and as a result we very quickly we built out a good business. The SEO business took a hit financially because while we’d made the shift, our competition were still operating in a high volume, low quality, low price mindset.

When Google dropped their Penguin algorithm, a whole wave of sites got smashed. This algorithm was entirely dedicated to bad backlinking practices and many of our low-cost competitors got wiped out overnight. Many customers kept buying low-cost stuff and others were so badly burned that SEO became a bad word.

Eventually, our higher price point started to make sense for people because they were able to get better returns on their SEO investment because it was less prone to random, low-quality competition. It weeded out the low end of the market for us and gave us better customers – to give you an example, our average SEO customer went from $250/mth to a starting point of $1500/mth. It goes without saying we did better financially with fewer customers – that’s a good win.

Understanding The Disruptive Nature Of Innovation

This all happened because we spotted an innovation that was coming, identified that it was going to be disruptive, invested in changing the way we did things to account for it and were willing to gamble on how well we adapted.

To be able to do this, you need to be in tune with your market, understand your customer’s needs and be prepared to back yourself. It goes back to the comment I make occasionally about being a student of the game. The days of going into a market, knowing absolutely nothing about it and building out a massive side business with very little effort are gone.

Most importantly though, as I mentioned earlier, you need to be across the outcomes your clients and prospects are looking for.  Knowing this is the key to everything you do.  When you’re across this you can ride waves of innovation and adapt to changes, because you understand what you need to deliver to your clients and customers.

Change and flux are a constant part of business.  There are people at the apex of an industry, they are the market leaders.  Their competitors are working like crazy to unseat them and that drives innovation.  The best companies are the ones who embrace that mindset and take full advantage of it.

Are you in a position to be able to do this?  Do you see your “next big thing” and have you figured out what it means for your business?

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