Why You Need to Stop Innovating Like a Startup

Lessons in product-development from the successful pivot of a growing retailer.

Written by Robert Sher

Launched in Atlanta by Taki Skouras and twin brothers Joseph and Jaime Brown in 2000, Cellairis grew to more than 700 mall stores offering wireless accessories and repairs. The company had prospered by producing a wide array of private label cases in different colours and patterns.

In 2013 Cellairis management realized its stores could sell more Cellairis-designed mobile phone cases with unique features that would be exclusive to their stores. Such a shift would allow the retailer to rival popular brands like Otter Box and LifeProof, which were sold by Cellairis and many other retailers as well. Millions of dollars of potential sales were walking right by Cellairis’ doors. The company needed to adopt a different approach.

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Cellairis is now a mid-sized company with $350 million in system-wide revenue, and its pivot illustrates a valuable lesson. Small companies don’t need exhaustive market research to grow to tens of millions of dollars in revenue. In fact, a key competitive advantage of small firms is their ability to see a market opportunity, act on that hunch and move quickly before it shows up on the radar screens of bigger companies. But when a company has grown into a mid-sized firm, launching new offerings based on a smattering of market signals is asking for trouble. Innovation, at that point, requires uncommon discipline.

Your mid-sized firm can’t win with the small-company shotgun approach of seeing opportunities in every idea and hoping one works. Such a strategy drains resources by chasing too many opportunities that usually don’t deliver enough growth to make a difference. Instead, you must act like a sharpshooter, searching for and selecting their target, sizing up the approach, and then carefully taking aim.

Discipline and rigor

Jumping into one idea after another—many of which are likely to generate little revenue—is terribly costly. Mid-sized companies must be much more disciplined about product innovation than small ones. Your firm must spend more dollars on R&D than when you were small, but those dollars need to be concentrated on a small set of well-vetted, high-potential ideas. A process for evaluating ideas to select the most promising must be developed and followed.

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Track market changes

Because the innovation bets they place are large and consequential, mid-sized firms can’t act on intuition alone in sizing up a new product opportunity. You need to rigorously assess the market potential of promising ideas. This includes regular customer interviews that must be analyzed, quarterly competitive analysis, and regular review of the work of industry analysts. The information collected from these sources should be digested in strategy review sessions at least twice per year.

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Master complexity

Mid-sized companies occupy a more complex domain than their smaller brethren. As your revenues grow, you must manage a greater number of technologies and sell to more industries. Your firm will soon face larger, more sophisticated competitors, and you can no longer pick one tiny niche to exploit quickly; these niches are too small and cannot generate sizeable revenue. There’s a need for new product ideas with much greater revenue potential, ones that smaller competitors can’t afford.

Cellairis saw untapped opportunities in having a greater number of differentiated cell phone cases and other products. Yet navigating the complexities of product design meant it had to understand the patent landscape and more deeply understand global customer demand for new features, colours and styles.

The firm’s ad-hoc approach to new products was no longer enough. In 2013, the retailer recruited a product development expert who established a consistent process for innovation. The shift took more than a year: making such changes and creating a new team takes time. While the temptation to use shortcuts (like skipping market testing) was ever-present Cellairis strove to be disciplined and rigorous in their approach. New products developed through the process fuelled substantial sales volumes at home and abroad in 2014.

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Say “wait,” say “no,” then say “yes”

Mid-sized companies must collect new ideas as they are generated. But rather than executing them right away, management must write them up as simple business cases and rank them for potential. Just that small amount of diligence can help you avoid spending money by eliminating the worst ideas. Take the remaining ideas and do some research. From that, a few concepts will emerge as high-potential innovations likely to move the company forward. Say yes to those and pour your resources into them.

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Mid-sized growing companies can’t afford to spin their wheels on interesting ideas that don’t go anywhere. Activity counts for nothing—the exhilaration that many CEOs and corporate leaders feel when they jump into action on new ideas is a deception. Slow down, take careful aim, then innovate for big results.

Robert Sher is the founder of CEO to CEO and the author of MIGHTY MIDSIZED COMPANIES: How Leaders Overcome 7 Silent Growth Killers (Bibliomotion; hardcover; September 2014). A regular columnist on, Sher has worked with executive teams at more than 85 companies to improve the leadership infrastructure of mid-sized organizations.


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