A Workshop on Making Deviled Eggs

Risks of Radical Innovation


Koffee With Karan - Shabana Azmi & Shobhaa Dé (2004)


Between minute 10 and 18, Shabana Azmi and Shobhaa De have a difference of opinion on the film business. Shabana Azmi is optimistic about audience's interest in alternative cinema, and implores the government and established filmmakers to encourage small independent filmmakers and foster creativity; whereas Shobhaa De is more businesslike in her views, and insists that the film business will give the audience what they want, which is mediocrity.

This argument reminds me of The Innovator's Solution, in which Clay Christensen says that big companies are apprehensive about investing in the ideas of new upstart companies because it entails daunting risks. So they choose to invest in their own 'sustaining innovations' that make incremental changes to existing products over disruptive innovations that introduce entirely new products that cater to a new market at the expense of their existing market.

And while big companies focus on bettering the performance of existing products for their loyal customers, new upstart companies target the low-end customers who want a niche product. Once they have achieved success in that specialised, but profitable corner of the market, they move up the chain and not only compete with the big companies for a share of their market, but also start to contend with the same risks of radical innovation that big companies face; This leaves even-newer companies to explore the next innovation space that the big guys don't want to play in. To a small company, stomaching the risk of failure comes with a chance at bountiful rewards, but to a big company, the risk-to-reward ratio is too high. However, this has also been the downfall of many big companies, who went out of business after they reached a particular scale because they didn't want to make big bets, and only wanted to consider incremental innovation until a point where the audience was unable to use or absorb the improvements.

In this analogy, the big company or filmmaker may be Yash Chopra or Karan Johar, making the highest grossing films in the country, many that are formulaic and leveraging on the success of the earlier films; (take for instance their romantic blockbusters or their film series like Dhoom); and the small company or filmmaker may be Shyam Benegal or Anurag Kashyap who cornered a niche and created successful disruptive business; (take for instance Kashyap's New Wave films catering to a niche audience… He initially began as a Director, and as he gained more clout, he went on to become a Producer).

If one were to take Shabana Azmi's suggestion of having big filmmakers invest in small filmmakers without attracting the risk of losing their reputation if the investment goes sour, then the big filmmakers would have to invest anonymously or somewhat covertly. One such example is Ekta Kapoor, who maintained two personalities, one as a TV serial maven making "K" serials, and another as an off-beat film producer, the latter personality being more understated. This is similar to big companies reaching new markets by creating new brands or subsidiary companies, while at the same time serving as 'disruptive growth engines' that also act as incubators for other growing businesses; like Coca-cola Company's Glaceau that makes Smart Water, or Amazon's subsidiaries like Zappo, Woot, iMDb, Lovefilms and products like Kindle and Audible.

In the end, it all boils down to big companies' willingness to fail, with an eye on success in the long term!

ps: I don't condone Shabana Azmi's comment about Americans being ignorant.

Comments