Part I: Leverage Assets at Off-Peak Hours to Increase Revenues and Launch New Business Ventures
A new U.K.-based startup called “The Newspaper Club”, which allows micro publishers access to some of the U.K.’s biggest newspaper presses, reminded me again of the power of time as an inspiration for product and service innovation.
Since I am sure that last sentence probably left a few people lost, let me explain first by telling you more about this interesting startup. It was founded by Russell Davies, a former ad executive, Ben Terrett, a designer, and some software colleagues. The true start for their venture happened when they formed something called “The Really Interesting Group”, a group of bloggers who wanted to publish a newspaper of their own back in 2008. Which they did using an available local printing press.
“So far, so what?”, right? The key innovation here isn’t that a group of bloggers put together a mini newspaper, printed it, and mailed it out. It is about how they arranged to get it printed.
What they did was to contact not just a good low-volume printing company. Instead they contacted operators of some of the largest commercial printing presses in the U.K., presses used to print some of the bigger newspapers there (such as The Sun with its 3 Million copies printed per day), and negotiated low-cost rates to use that same equipment during off-peak hours. They started it as a single run for themselves of something called “Things Our Friends Have Written on the Internet”, but soon realized the broader commercial potential of the whole idea of being able to print this high a quality of product by leasing time on the big presses in between daily print runs.
Their startup, which offers combination low cost print-and-delivery services via an easily-navigated online portal, offers delivery throughout all of mainland U.K. for prices that will surprise you. Obviously there had to be good business execution and low-cost widespread access of the service to make this work, but the real enabler for the innovation involved making use of a resource during off-peak hours. It meant “The Newspaper Group” could leverage high quality and various packaging services at a price that would have been previously untouchable. It also means that the printing companies are making additional potentially high-margin revenue off equipment which before was just sitting around all day, dormant. The capital equipment represents a sunk cost for them and the variable costs of doing the additional printing are minimal, especially because of the highly-automated nature of modern printing equipment. (You can read more about this startup in the excellent BBC online article here.)
Besides what “The Newspaper Group” discovered, other examples of this category of Strategy Innovation are all around you. Here are just a few:
In the early 1970s, McDonald’s Corporation was looking for a way to get more revenue out its existing restaurants around the world. They had an established strong business in lunch and dinner services, and kept trying new products with their customers. It worked to some extent, but it was not until they finally introduced an entire new “time category” of product — breakfast — that they were able to make a major breakthrough in increased revenues. The breakfast menu was in fact driven to a significant part simply by the idea of finding a way to make use of the core restaurant real estate in more hours of the day. Yes it did require the new menu items and some rearrangement of the kitchen, but those costs were more than compensated for by what continues to be one of the most successful “breakfast restaurants” in the world.
More recently, National Cinema Media (or NCM), whose ads you often see in AMC Theaters across the United States, began a campaign for off-hours utilization of its movie facilities — for things other than movies. With comfortable seats, great audio/visual facilities, easy provisions for refreshments for attendees, and often excellent parking facilities, NCM quickly learned it could make significant incremental dollars by signing up corporations, non-profits, and community organizations of all kinds for organizational meetings held in their theaters. If you are interested in learning more about this, check out the part of NCM’s website which describes these offerings here.
Especially as companies are able to more tightly manage use of their own facilities and equipment for other reasons, the concept is spreading as a product or service innovation strategy, and you may just find that by thinking about when your own capital intensive resources are just “lying around” that there is an opportunity for you to add some incremental revenue to the bottom line, possibly even at a high incremental margin as well.
Maybe — it is time to start thinking about time management of your own resources in a new way.