THE SHORT ANSWER: NEITHER PRODUCED INNOVATIONS WORTH CELEBRATING. THE LONGER ONE? READ ON.
The simplest reason Facebook andTwitter are not on this year’s Most Innovative Companies list: Neither produced innovations worth celebrating. A spot on MIC, as we call it, is not a tenured position. Every year, we assess innovation and the impact of those initiatives. In the history of our list, fewer than one-third of the companies return from one year to the next. This year, only seven are consecutive honorees, an indication of how more companies in more corners of the world are innovating to seek a competitive edge, with the stakes only getting higher.
BY: DAVID LIDSKY | fastcompany.com
Illustration by Adam Simpson
Facebook and Twitter deserve special comment because they have been among the rare perennials, and their recent moves reveal two companies engaging in innovation’s evil twin: short-term thinking at the expense of long-term value. Facebook’s most notable product achievement in 2012 was Poke, a facsimile of Snapchat, the trendy-with-teens (and sexters) photo app. Poke stumbled almost immediately. In fact, Facebook has made a cottage industry out of chasing hot Internet services (Pinterest and Yelp included), instead of developing new ideas to delight its billion users. Similarly, Twitter’s product strategy feels wholly defensive. Its most notable new feature is photo filters, a plainly unoriginal addition.
Both companies have turned their focus away from users and toward shareholders to get bigger, not better. Revenue is great, but not at the expense of the product. Twitter’s focus on improving ad revenue requires a consistent experience across the web, smartphones, and tablets, so it forced its once-elegant mobile apps to conform to a clunky desktop look, because that model works best for advertisers. That’s the exact opposite of how product development is supposed to go.
Facebook, facing the strain of a tumbling stock price last summer, has transformed the implicit understanding of the site–my posts will be seen by those who want to see them–into an advertising opportunity. It freely admits that only a small percentage of posts make it to friends and fans, but it can fix that if you buy ads. To compound matters, Facebook’s aggressive mucking with its privacy policies has bred a deep distrust of how the company uses the content shared on Facebook (and Instagram) among a significant, vocal segment of its users.
Neither service is a lost cause. Yet. But both would be well served to revisit what made them special in the first place: engaging with peers, not merely consuming content from brands and celebrities; being a creative platform for developers; and championing social media where users, not advertisers, call the shots.
THE WORLD’S TOP 10 MOST INNOVATIVE COMPANIES IN STYLE
BY: FAST COMPANY STAFF
For becoming the destination for design wares. The company could do $150 million in sales this year, and it’s accomplishing that by constantly reimagining the company: It’s evolved from flash sales to a suite of design-centric boutiques. In 2012, Fab’s membership increased to more than 10 million; International sales jumped from 0% to 30%; and two-thirds of all sales now come from repeat customers. With an investment in a warehouse this year, everyday design will arrive at the ever-growing list of customers’ doors even faster.
For turning sustainability into science. In addition to its ongoing commitment to sustainability across all of its brands–all will undergo a meticulous environmental review by 2015–the conglomerate (home of Puma, Gucci, and many others) recently announced a commitment to digitally revamp its brands with the help of online retail company YOOX, and is working fast to reach a younger American consumer through acquisitions of such affordable, sports-focused brands as Volcom.
For turning cheeky, risky clothing into a serious online fashion empire. What started as an eBay vintage clothing shop in 2006 has grown into a more than $120 million brand. Beloved for its selection of tough, hip clothing that its fans call “empowering,” the company has done almost no traditional marketing, and instead reaches new fans and shoppers through social media platforms and word of mouth. By offering limited runs of clothing, Nasty Gal is rarely left with unwanted inventory; 93% of their product sells at full price. Earlier this year, the company raised $9 million in funding, and in fall 2012, launched a Nasty Gal-branded line–Weird Science–designed by founder Sophia Amoruso and an in-house team.
For letting its community help fill the racks. Customer engagement proves profitable for Susan Gregg Koger and her Husband Eric, founders of virtual thrift shop turned e-commerce success story. Through its Be The Buyer program, products brought to market through customer voting sell twice as much. ModCloth took that to the next level in 2012 by letting the community actually submit designs too. The company is growing at more than 50% annually, and a third of the site’s traffic comes from visitors who come to the site more than once a day, suggesting the company has hit on something beyond just shopping.
For bringing tech savviness to stylists. The $78 billion beauty industry–about 3 million spas, salons and professionals–are mostly independent businesses, and mostly offline.StyleSeat created a platform for these stylists to connect with clients, book appointments and advertise their services. Growth has been all about word of mouth, and yet the company has already spread to 10,000 cities nationwide. This year StyleSeat launched more features, such as subscriptions and new client deals, which is good for stylists and clients alike.
For creating an e-commerce startup factory. Science follows an incubator model: It acquires and develops new talent and ideas, and builds startups from the ground up. This has helped make it a hotbed of disruptive companies in the style and personal health industry–from Ellie, the athletic gear maker, to Cult Cosmetics, a designer nail brand. And with its companies such as Dollar Shave Club receiving $9.8 million in Series A funding lead by big name VCs, the growth is only just beginning.
For discovering the next lipstick or face cream you’ll love. Sending subscribers more than 300,000 monthly boxes full of beauty supplies for women and similar grooming and lifestyle gear for men, Birchbox took the idea of cosmetic samples and made it a business model. Now 50% of subscribers will buy the full-size product on the site, showing the boxes’ power of persuasion.
For bringing luxury brands online–and to life. Luxury brands are often resistant to web sales, afraid that flash sales sites will damage their cache. AHAlife countered that by creating an e-commerce hub for the $300 billion global high-end goods market. Curated by big names such as Daniel Boulud and Tim Gunn, luxury brands get the exposure they want, at full price. In 2012, the company created a shoppable magazine, allowing users to browse and shop each page through their smartphones.
For appifying shoe and bag lust. Through its app, Snapette allows boutiques and stores such as Uniqlo or Nine West to reach out to nearby shoppers–sharing deals and driving instant foot traffic. Now in 12 cities and available in eight languages, the service has seen its largest growth in the international market. The next step: enabling mobile commerce, to get the deal even if you aren’t in the store.
For proudly making fashion in China. By joining traditional Chinese details with modern materials and silhouettes, designer Huishan Zhang has caught the attention of the international fashion market. His manufacturing is serving another goal, though: redefine the connotations of “Made in China.” Zhang and his team have worked with local manufacturers in his hometown of Qingdao to source intricate fabrics that typically are only produced for bulk orders. There’s nothing cheap or ripped-off about it.