What lessons do you learn when you’ve been in the room, day in and day out, working with over a hundred transformative founders, helping them build the narratives for their companies?
Since we started FNDR five years ago, my partners and I have worked with 126 founders innovating in over 20 categories, from Ai Biotech to SaaS business software, precision medicine, new foods to esports, and more. It’s through that horizontal perspective that we’ve been able to see some of the tears and threads and identify the core themes that cut across our founders.
On this week’s episode of Most Innovative Companies Podcast, we discuss the most successful and differentiating characteristics they share in common, insights on how they’ve dealt with the past era of change, and what they can teach us about what’s coming.
Here are 10 of those key lessons, inspired by how our founders have approached innovation.
1. Innovation is never one-size-fits-all
People tend to think that innovation is the domain of a creative or an inventor only–but that’s far from the case. We’ve worked with scientists, business operators, athletes, activists, and catalysts.
“The best founders,” Rebekah Jefferis, FNDR partner says, “inject their own spirit into it, and use it to lead their company forward.”
Innovation in practice can take many shapes or forms. There’s the type of innovation everyone expects, such as product or category innovation, but there’s also the innovation of operating systems, internal structures, ways of working, the business model itself, and many more.
2. Create the right conditions for innovation
Though founders may have different styles or differing approaches to the way they innovate, what unites the best is that they create the conditions for innovation.
“Innovation can be a scary, daunting process,” Jefferis says. “you’re not always sure what it’s going to be, so it’s about how you have a vulnerable interaction with yourself, with your company, with other perspectives to try to develop and nurture something new.”
Some of our founders build for this within the structure of their teams, separating out (as Patrick Spence at Sonos has) explorers from builders. Others create the conditions for innovation through the composition of their leadership, or by bringing in external, independent voices.
Narrative can help create the conditions for innovation to thrive; it sits above everything, at the level of the founder. Being able to tell a compelling and distinct story about who you are, and the impact you want to have in the world, brings clarity, freedom, and confidence to an otherwise scary, uncertain, and uncomfortable space.
3. Narrative is a core source for innovation
Narrative is not just something you wrap around your product or your idea; it’s something that can drive that innovation. It can also drive recruitment and retention, with respect to both customers and employees. An intentional narrative offers “a way of reconciling and realigning businesses, ethics, and humanity,” Stephen Butler, CCO at FNDR, says and “a new understanding of the cause and effect of each and every business.”
As an example, take Airbnb. Originally it was seen as a 21st century couch-surfing brand, but their ambitions were far greater. With their statement of intent “belong anywhere” as a corner store for their brand and narrative, they created a new type of invitation, not only for the guests but also for the hosts. By asking themselves, what would a world where seven billion people could belong anywhere look like? Airbnb developed a culture of “hosting” meetings within the company, innovations such as the “experiences” platform, and, more recently, a platform rehaul that is centered around that very idea.
4. Introduce the new with the familiar
“You can’t put new on top of new, because then things just feel scary, or weird,” FNDR partner Nick Barham says. It’s about finding the balance between something that people recognize and what is new.
The most successful founders are those that describe their innovations simply and clearly. They have a singular statement of intent or one specific idea that can describe their business and their role in culture, which in turn brings customers, employees, and investors along.
Names can also help when introducing the new with the familiar. A great example is Bowery, the vertical farming company. Their name is based on a Dutch word for farming—in fact the New York Bowery was originally the connection between the farms outside the city, and the city itself—and what Bowery wants is to bring vertical farming to every city.
5. True innovation is more than disruption
In the chaos of the past few years, we’ve seen a new wave of founders who could be described as more “conscious” founders, innovating thoughtfully and ethically. We see in them a recognition of world challenges and needs, and a response to the unintended consequences of the past few decades upon the environment and people.
“[These founders] see that there’s a really good value proposition in balancing both business success and humanity succeeding [and that] there’s a lot of money to be made there,” Jefferis says. “They’re really clear and inclusive about their beliefs and behaviors, and then they share them and they make them really important.”
These founders, in other words, no longer focus on “move fast and break things,” but instead seek to “move forward and make things.”
6. Innovation unites both profit and purpose
For the first two decades of the 21st Century, Barham says, much of the focus of innovation was on “reducing friction, expanding connections, increasing efficiency, and all of those things that made consumers’ lives a bit easier.”
But in the past few years, Barham says, “we find it really encouraging to see the number and the range of companies that are rising to today’s most critical demands and are thinking about [questions like], how should we feed ourselves? Where do we get our energy from? How do we move around cities? How do we better understand each other? Our founders are matching new experiences and services with what people and the planet need.”
“It’s not just about making something that’s able to be used, but about making it have a purpose in life,” Butler adds. “And then a matter of making this balance—this purpose and profit dynamic—effortless.”
7. Innovations are interactions with the new world
It would be a misstep to create a great innovation and then position it simply as a solution to an old-world problem—because a problem-solution model is an inherently limited business model. When, on the other hand, you intentionally consider how your product or technology will interact with culture, “you’re looking at an interactive model which is also infinite,” Butler says.
Oatly, for example, didn’t play into the concept that it was milk designed for the vegan and lactose-intolerant communities. Instead, founder Tony Petersson observed the coffee culture boom and recognized that Oatly could be a part of it. Instead of going for the obvious “milk substitute” route, Petersson penetrated the barista community—as it turns out, oat milk froths beautifully—and fast-forward to today, Burger King serves Oatly.
8. Innovation thrives at the intersection between the physical and digital
While the divide between our physical world and our digital reality is shrinking, technology and narrative are increasingly coming together. Companies need to help people navigate both the digital and the physical.
Innovation, in fact, blooms within the tears between the two. Some of the best innovators are often the ones seeking to get beyond that “tear,” recognizing that our future lies at that intersection between the physical and digital.
Evan Spiegel at Snap has found great success overcoming digital dualism by seeing the digital and the physical as a connected idea—becoming the biggest augmented reality company in the world.
9. Sustainability is a strategy, not a destination
We need to grow beyond sustainability. Barham argues that “we can’t afford to see economic growth and environmental protection as a zero-sum gain anymore; instead, we must actively recognize that we can achieve both with the right kind of business.”
“A lot of the companies we are working with are seeing constraints and diminished resources as inspiration for innovation”; Companies are using what might otherwise be seen as waste as inputs: Pangaia uses banana and pineapple leaf fiber to make sweaters and sunglasses from CO2, while Allonia is developing enzymes to eat plastics to turn them into something far less “forever” and less harmful.
10. The future is a paradox . . . embrace it.
The future never feels comfortable because it’s riddled with paradoxes and we often have difficulty rectifying those discrepancies.
“These [paradoxes] are, by nature, the truisms of the human condition and therefore the future of where we are going,” Butler says. “What we have seen in the best founders and the best innovators is that they draw positive change from their paradox. They really lean into it, and the most innovative companies we’ve worked with tend to be powered by that paradox.”
Brands like Apple and Airbnb, for instance, each focus on resolving tension as opposed to dissolving it. Apple revolutionized an industry by bridging technology and the liberal arts. Airbnb’s business model is intent on fulfilling a desire to travel anywhere and yet still feel at home. Innovating within these paradoxes can be challenging, but also has the potential to create seminal brands that are solving the true issues of today.
Listen to the episode for the full discussion.