Taking On All Challengers, Head On
Think of black space innovation perhaps as a continuation of gray space innovation, just more intense (thus, our stroll further down the color spectrum). Black space innovation is when the space is already crowded with incumbents, but your organization has the ability to innovate and differentiate the offering by leveraging multiple organizational strengths: efficiencies of scale and manufacturing, logistics, distribution, brand, vertical integration, and more. In many cases, this happens when a large player enters the space, but can also be when a smaller organization is able to outmaneuver the competition or otherwise bring its unique strengths to bear.
Regardless of the mechanism or organization, black space innovation is all about the application of significant amounts of leverage; not just a handful of innovations, but entire constellations of innovation.
Black Space Innovation
These innovations are typically defined by the fact that they are already crowded spaces, and the attempt for one company to bring enough leverage to bear that the market aligns behind them. In order to do this, it requires a significant effort on a variety of fronts, as an incremental innovation would likely not justify the organization entering the competitive fray.
- Entry into more mature space allows many unknowns to be revealed by market
- Greater potential for research and learning
- Even lower cost to market or educate into a more mature space
- High potential to leverage the organization's full portfolio of strength
- It may be more efficient to merge or acquire an organization already in the space
- Brand may not translate well into the new space
- Competitors may be able to adapt more quickly than your organization
- If leveraging size, potential for high startup cost
- Unsuccessful market entry can prove financially damaging
Best Utilized By:
Typically larger or more established organizations, or those organizations which elect to consciously and actively sit on the sidelines of innovation until the time for entry is appropriate. While "actively sitting on the sidelines" may sound like an oxymoron, it is important to realize that an insights or market intelligence team at a large organization could be performing more consumer and competitive research than those actually actively participating in the market at the time.
Examples of Black Space Innovation
While there are quite a few established players in the LED market, namely Cree and Philips, IKEA has consciously committed to use its size, scale, efficiency, and brand to take LED to the next level. While it could have struck a supply agreement, it instead elected to start from scratch and commit to taking on the manufacturing of its bulbs. We will be covering the IKEA LED case in a bit more detail later in this course, but it is an example of a large company consciously electing to enter a fairly mature and crowded market. Please watch the following 1:27 silent video.
Veta La Palma Aquaculture
As related in this compelling talk by Chef Dan Barber, Veta la Palma has taken a drastically different approach to aquaculture by making it sustainable, and its fish some of the world's best. In this case, Veta la Palma is not just taking on a group of tangible competitors, but instead, it is challenging an entire method of farming and going to market with fish. Veta la Palma is doing things drastically different in service of a drastically different product and in a drastically more beneficial way.
Please watch the following 18:55 Ted Talk "How I fell in love with a fish" by Dan Barber. If the video is not displaying on the page, please view it on the external site.
Transcript of How I Fell in Love With a Fish
So, I've known a lot of fish in my life. I've loved only two. That first one, it was more like a passionate affair. It was a beautiful fish: flavorful, textured, meaty, a bestseller on the menu. What a fish. (Laughter) Even better, it was farm-raised to the supposed highest standards of sustainability. So you could feel good about selling it.
I was in a relationship with this beauty for several months. One day, the head of the company called and asked if I'd speak at an event about the farm's sustainability. "Absolutely," I said. Here was a company trying to solve what's become this unimaginable problem for us chefs: How do we keep fish on our menus?
For the past 50 years, we've been fishing the seas like we clear-cut forests. It's hard to overstate the destruction. Ninety percent of large fish, the ones we love -- the tunas, the halibuts, the salmons, swordfish -- they've collapsed. There's almost nothing left. So, for better or for worse, aquaculture, fish farming, is going to be a part of our future. A lot of arguments against it: Fish farms pollute -- most of them do anyway -- and they're inefficient. Take tuna, a major drawback. It's got a feed conversion ratio of 15 to one. That means it takes fifteen pounds of wild fish to get you one pound of farm tuna. Not very sustainable. It doesn't taste very good either.
So here, finally, was a company trying to do it right. I wanted to support them. The day before the event, I called the head of P.R. for the company. Let's call him Don.
"Don," I said, "just to get the facts straight, you guys are famous for farming so far out to sea, you don't pollute."
"That's right," he said. "We're so far out, the waste from our fish gets distributed, not concentrated." And then he added, "We're basically a world unto ourselves. That feed conversion ratio? 2.5 to one," he said. "Best in the business."
2.5 to one, great. "2.5 what? What are you feeding?"
"Sustainable proteins," he said.
"Great," I said. Got off the phone. And that night, I was lying in bed, and I thought: What the hell is a sustainable protein? (Laughter)
So the next day, just before the event, I called Don. I said, "Don, what are some examples of sustainable proteins?"
He said he didn't know. He would ask around. Well, I got on the phone with a few people in the company; no one could give me a straight answer until finally, I got on the phone with the head biologist. Let's call him Don too. (Laughter)
"Don," I said, "what are some examples of sustainable proteins?"
Well, he mentioned some algaes and some fish meals, and then he said chicken pellets. I said, "Chicken pellets?"
He said, "Yeah, feathers, skin, bone meal, scraps, dried and processed into feed."
I said, "What percentage of your feed is chicken?" Thinking, you know, two percent.
"Well, it's about 30 percent," he said.
I said, "Don, what's sustainable about feeding chicken to fish?" (Laughter)
There was a long pause on the line, and he said, "There's just too much chicken in the world." (Laughter)
I fell out of love with this fish. (Laughter) No, not because I'm some self-righteous, goody-two shoes foodie. I actually am. (Laughter) No, I actually fell out of love with this fish because, I swear to God, after that conversation, the fish tasted like chicken. (Laughter)
This second fish, it's a different kind of love story. It's the romantic kind, the kind where the more you get to know your fish, you love the fish. I first ate it at a restaurant in southern Spain. A journalist friend had been talking about this fish for a long time. She kind of set us up. (Laughter) It came to the table a bright, almost shimmering, white color. The chef had overcooked it. Like twice over. Amazingly, it was still delicious.
Who can make a fish taste good after it's been overcooked? I can't, but this guy can. Let's call him Miguel -- actually his name is Miguel. (Laughter) And no, he didn't cook the fish, and he's not a chef, at least in the way that you and I understand it. He's a biologist at Veta La Palma. It's a fish farm in the southwestern corner of Spain. It's at the tip of the Guadalquivir river.
Until the 1980s, the farm was in the hands of the Argentinians. They raised beef cattle on what was essentially wetlands. They did it by draining the land. They built this intricate series of canals, and they pushed water off the land and out into the river. Well, they couldn't make it work, not economically. And ecologically, it was a disaster. It killed like 90 percent of the birds, which, for this place, is a lot of birds. And so in 1982, a Spanish company with an environmental conscience purchased the land.
What did they do? They reversed the flow of water. They literally flipped the switch. Instead of pushing water out, they used the channels to pull water back in. They flooded the canals. They created a 27,000-acre fish farm -- bass, mullet, shrimp, eel -- and in the process, Miguel and this company completely reversed the ecological destruction. The farm's incredible. I mean, you've never seen anything like this. You stare out at a horizon that is a million miles away, and all you see are flooded canals and this thick, rich marshland.
I was there not long ago with Miguel. He's an amazing guy, like three parts Charles Darwin and one part Crocodile Dundee. (Laughter) Okay? There we are slogging through the wetlands, and I'm panting and sweating, got mud up to my knees, and Miguel's calmly conducting a biology lecture. Here, he's pointing out a rare Black-shouldered Kite. Now, he's mentioning the mineral needs of phytoplankton. And here, here he sees a grouping pattern that reminds him of the Tanzanian Giraffe.
It turns out, Miguel spent the better part of his career in the Mikumi National Park in Africa. I asked him how he became such an expert on fish.
He said, "Fish? I didn't know anything about fish. I'm an expert in relationships." And then he's off, launching into more talk about rare birds and algaes and strange aquatic plants.
And don't get me wrong, that was really fascinating, you know, the biotic community unplugged, kind of thing. It's great, but I was in love. And my head was swooning over that overcooked piece of delicious fish I had the night before. So I interrupted him. I said, "Miguel, what makes your fish taste so good?"
He pointed at the algae.
"I know, dude, the algae, the phytoplankton, the relationships: It's amazing. But what are your fish eating? What's the feed conversion ratio?"
Well, he goes on to tell me it's such a rich system that the fish are eating what they'd be eating in the wild. The plant biomass, the phytoplankton, the zooplankton, it's what feeds the fish. The system is so healthy, it's totally self-renewing. There is no feed. Ever heard of a farm that doesn't feed its animals?
Later that day, I was driving around this property with Miguel, and I asked him, I said, "For a place that seems so natural, unlike like any farm I'd ever been at, how do you measure success?"
At that moment, it was as if a film director called for a set change. And we rounded the corner and saw the most amazing sight: thousands and thousands of pink flamingos, a literal pink carpet for as far as you could see.
"That's success," he said. "Look at their bellies, pink. They're feasting." Feasting? I was totally confused.
I said, "Miguel, aren't they feasting on your fish?" (Laughter)
"Yes," he said. (Laughter) "We lose 20 percent of our fish and fish eggs to birds. Well, last year, this property had 600,000 birds on it, more than 250 different species. It's become, today, the largest and one of the most important private bird sanctuaries in all of Europe."
I said, "Miguel, isn't a thriving bird population like the last thing you want on a fish farm?" (Laughter) He shook his head, no.
He said, "We farm extensively, not intensively. This is an ecological network. The flamingos eat the shrimp. The shrimp eat the phytoplankton. So the pinker the belly, the better the system."
Okay, so let's review: a farm that doesn't feed its animals, and a farm that measures its success on the health of its predators. A fish farm, but also a bird sanctuary. Oh, and by the way, those flamingos, they shouldn't even be there in the first place. They brood in a town 150 miles away, where the soil conditions are better for building nests. Every morning, they fly 150 miles into the farm. And every evening, they fly 150 miles back. (Laughter) They do that because they're able to follow the broken white line of highway A92. (Laughter) No kidding.
I was imagining a "March of the Penguins" thing, so I looked at Miguel. I said, "Miguel, do they fly 150 miles to the farm, and then do they fly 150 miles back at night? Do they do that for the children?"
He looked at me like I had just quoted a Whitney Houston song. (Laughter) He said, "No; they do it because the food's better." (Laughter)
I didn't mention the skin of my beloved fish, which was delicious -- and I don't like fish skin; I don't like it seared, I don't like it crispy. It's that acrid, tar-like flavor. I almost never cook with it. Yet, when I tasted it at that restaurant in southern Spain, it tasted not at all like fish skin. It tasted sweet and clean, like you were taking a bite of the ocean. I mentioned that to Miguel, and he nodded. He said, "The skin acts like a sponge. It's the last defense before anything enters the body. It evolved to soak up impurities." And then he added, "But our water has no impurities."
OK. A farm that doesn't feed its fish, a farm that measures its success by the success of its predators. And then I realized when he says, "A farm that has no impurities," he made a big understatement, because the water that flows through that farm comes in from the Guadalquivir River. It's a river that carries with it all the things that rivers tend to carry these days: chemical contaminants, pesticide runoff. And when it works its way through the system and leaves, the water is cleaner than when it entered. The system is so healthy, it purifies the water. So, not just a farm that doesn't feed its animals, not just a farm that measures its success by the health of its predators, but a farm that's literally a water purification plant -- and not just for those fish, but for you and me as well. Because when that water leaves, it dumps out into the Atlantic. A drop in the ocean, I know, but I'll take it, and so should you, because this love story, however romantic, is also instructive. You might say it's a recipe for the future of good food, whether we're talking about bass or beef cattle.
What we need now is a radically new conception of agriculture, one in which the food actually tastes good. (Laughter) (Applause) But for a lot people, that's a bit too radical. We're not realists, us foodies; we're lovers. We love farmers' markets, we love small family farms, we talk about local food, we eat organic. And when you suggest these are the things that will ensure the future of good food, someone, somewhere stands up and says, "Hey guy, I love pink flamingos, but how are you going to feed the world?" How are you going to feed the world?
Can I be honest? I don't love that question. No, not because we already produce enough calories to more than feed the world. One billion people will go hungry today. One billion -- that's more than ever before -- because of gross inequalities in distribution, not tonnage. Now, I don't love this question because it's determined the logic of our food system for the last 50 years.
Feed grain to herbivores, pesticides to monocultures, chemicals to soil, chicken to fish, and all along agribusiness has simply asked, "If we're feeding more people more cheaply, how terrible could that be?" That's been the motivation, it's been the justification: it's been the business plan of American agriculture. We should call it what it is: a business in liquidation, a business that's quickly eroding ecological capital that makes that very production possible. That's not a business, and it isn't agriculture.
Our breadbasket is threatened today, not because of diminishing supply, but because of diminishing resources. Not by the latest combine and tractor invention, but by fertile land; not by pumps, but by fresh water; not by chainsaws, but by forests; and not by fishing boats and nets, but by fish in the sea.
Want to feed the world? Let's start by asking: How are we going to feed ourselves? Or better: How can we create conditions that enable every community to feed itself? (Applause) To do that, don't look at the agribusiness model for the future. It's really old, and it's tired. It's high on capital, chemistry and machines, and it's never produced anything really good to eat. Instead, let's look to the ecological model. That's the one that relies on two billion years of on-the-job experience.
Look to Miguel, farmers like Miguel. Farms that aren't worlds unto themselves; farms that restore instead of deplete; farms that farm extensively instead of just intensively; farmers that are not just producers, but experts in relationships. Because they're the ones that are experts in flavor, too. And if I'm going to be really honest, they're a better chef than I'll ever be. You know, I'm okay with that, because if that's the future of good food, it's going to be delicious.
Thank you. (Applause)