Learn how Ashley Pearce implemented the Innovation Room in E-commerce. Find out the strategies that come with it and how you can use it too.
Ashley’s team had generated all the Intellectual capital and know-how and Ashley is commonly acquainted with how this gets evaluated in a corporate environment.
Then the question became: how do we turn our know-how (IC) – google, Pinterest SEO, high ROI ads – into capital? (Ie how do we monetize our knowledge?)
Ashley has become quite good at using credit cards and loans to get through cash peaks.
It does come down to particular days in fact.
However, to take on higher-risk capital in an organization where you are trying to run quickly – there is an underlying feeling that an Amazon account suspension could trip you up. If they took on a high-interest bank loan with security, they don’t understand the Amazon space – they wouldn’t have a clue how to react eg repayment within 90 days.
When one of his friends says they just raised capital, he says well done – but your business is finished!
So Ashley is wary of outside capital investors.
MICAS Framework – briefly, IC and FC, hence FSM, Mention 2 Rooms
MICAS means: Monetise Intellectual Capital Assets Systematically
Just because the business model is different, doesn’t mean you’re not using the same skills/knowledge.
There’s a mechanism – the 2 rooms: Engine Room and Innovation Room for eCommerce.
The engine room generates cash and moves FC.
The innovation room for eCommerce isn’t necessarily a function that is alive in all businesses.
Financial innovation or product innovation for example for Innovation Room in eCommerce.
This is very applicable to an eCommerce business
Why does it? Mentality, long term view, stay ahead of the competition who are innovating (newcomers are doing nothing but innovate whilst you’re busy running your business).
In Ashley’s eCommerce business, they had a great innovation room and were deployed back into the Engine room.
Used small cash to develop innovations and short time – in some cases 9-12 months.
In the innovation room, still healthy – doing things that wouldn’t offer to clients yet.
Focus and simplifying and shorter-term thinking is a helpful mindset for the Engine Room
However, different rules of physics apply in the innovation room! That’s where the conflict and contrast come in.
Misapplication of the 80/20 in the innovation room is a particularly big danger. If you just focus on what’s performing now, you miss out on what will perform in the future. It doesn’t account for the future – eg Amazon ads, Google Ads, Instagram ads are becoming unprofitable. So you need to devote some resources to deal with the future.
If you’re a solo seller – you get caught up in “one-percenters” ie: things that will only move a needle by 1% either way; for example:
You need to time block eg: Tuesday afternoon 2-6 pm is spent on innovation.
Example activities include:
(As opposed to bundling and ebooks!)
Go and find what works elsewhere and then bring that back to your industry.
Having the desire is key.
Tuesday afternoon could be research time:
Typically the result Amazon sellers look for is sales increase.
But it could be a higher price or reduced cost (so higher profit).
Ashley’s teams are in the UK and Philippines
Ashley has a virtual workspace “The Lab” – a forum online – for his dispersed team.
Eg: Here’s a link to an article I read, here’s the insight I got, what do you think?
Cultural benefits: “day one” business mentality; resourcefulness; avoiding the “bad habits breed in good times” trap
This is a cultural shift. There are benefits that go way beyond innovation.
SOPs and going over detail can be very boring! For Ashley’s weekly meetings, 25% of it is about “what have we learned this week?”
Ashley has a company objective to develop intellectual capacity through the team
And a company culture where the employees are responsible for innovative thinking.
If you give them budget limits – what can you do for £20?
You breed a culture of resourcefulness.
VAs vs team members! Think of them as real employees/team members. Dedicate 25% of the time to learn from what they didn’t know before. As you go through that, you’ll identify things that might be more practically applicable