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Innovation vs. Entrepreneurship
January 22, 2008

As Innovator in Residence at Saint Louis University, I am often asked to define the difference between innovation and entrepreneurship. These two complimentary modes of action are often confused. So, what is the difference? And what can happen if they get together?

Innovations can be large or small and process- or product-oriented. They can affect the way we think or act. They can be minor enhancements or a totally new way of doing something. They can be an incremental product change or something completely new.

The portable tape player kept being enhanced by becoming smaller and delivering better sound quality with longer-lasting battery life. Each of these steps was an innovation that kept the product alive and consumers willing to purchase a newer, better (at least in perception) model.

Then, along came the iPod. That was not just an innovation; it was a “disruptive change.” Apple turned the whole industry upside down. They were not the first MP3 player, but it can be argued they were the best, with a unique human interface that created an industry.

For a process example, we can find a great example in the old days. Can you remember when the first ATM machines came out? What an innovation. It was a new way to bank. The old teller was going out of style. But there was a problem: No one wanted to use them.

Entrepreneurs, on the other hand, take a concept, product or service and sell it to the community. They set up the business which allows a new or existing product or service to become a profitable business. They do not have to innovate (although it can help with their success.) When the entrepreneurs finally got involved with ATMs, along came advertisements for the “ugly teller” and the rest is history. They changed the perception of ATMs in the marketplace.

Anyone can open a new retail store. They can sell existing products, using tried-and-true processes, in an area with competing stores. It is the entrepreneurs that see the bigger picture. They create the “buzz” that gets customers in the store. They run the operation more tightly to be able to make a profit, even on smaller margins (at least to start) than their competitors.

An entrepreneur with an innovative idea is a rare and valuable find. These are the people who gave us the Pet Rock and convinced us we could order books from an online store. They have delivered a new kind of cell phone (iPhone) and are remaking department stores, grocery stores and distributorships.

Look around you. New and exciting things are being experimented with every day. What can you do to cause disruptive change? Everyone is capable of coming up with the idea. Put that together with someone who can execute a plan—and watch out.

Innovation and entrepreneurship may be two different animals, but when they get together, watch out.

Posted by Steve Epner on January 22, 2008 | Comments (2)