Escape from the Black Hole of Innovation.

       

Peter Drucker once said that “Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth.” Unfortunately, innovation comes together with extremely high risks and low success rate. In 2021, the number of products launched in Tmall alone exceeded 200 million, namely 380 products per minute, which generated 1.4 trillion yuan annual revenues in total, less than 7,000 yuan per product per year. Innovation seems to be a black hole, devouring unrelentingly all the resources without any returns.

        

My partners and myself have been helping companies around the world to innovate since two decades ago.

        

In China, we partnered with Great Wall Motors in 2002 and advised the company to pivot from pick-up into SUV category. We rebranded its existing brand Saifu into Haval and launched the legendary national best-selling Haval H6 model, which has sold 5 million units since 2011 with 500 billion yuan in total up till now. We have been accompanying Wanglaoji brand for twenty years, either it was run by Jiaduobao Company or Guangzhou Pharmaceutical Holdings. We have witnessed Wanglaoji herbal tea growing from an unknown local pharmaceutical drink into a national, even global, best-selling ready-to-drink tea brand. Currently, we are working together with them to build a global brand – Walovi and the second growth curve – Ci Ning Ji. We helped Robam Appliances Company create the strong suction range hood and achieve No.1 globally in unit sales for 8 consecutive years since its launch in 2013. Since eight years ago, we have been working together with Jinmailang Company in pioneering and leading the era of jumbo instant noodles in China, and building multiple brands reaching billion yuan sales, including Dajinye, Yitongban (1.5 buckets), Yidaiban (1.5 sachets) and Datangmian (Jumbo Noodles with Soup). We created the new category of cooled boiled bottled water by launching the brand Jinmailang Liangbaikai (Cooled Boiled Water), which triggered leading beverages manufacturers to follow suit. Nowadays we are forging an even deeper partnership with Jinmailang by co-incubating the MetaVita brand targeting at Gen-Z consumers. We recommended Toly Bread Company inaugurate the era of short-shelf-life packaged bread. With its creative business model – central factory + daily delivery of fresh bread, Toly Bread completely disrupts the packaged bread category dominated by long-shelf-life products. We supported Helens International Holdings Company in creating the category of social bar, which naturally and completely changes the bar chain industry in China. Right now, we are cooperating with Helens to introduce a new craft beer brand with the positioning of “affordable national craft beer” to reshape Chinese beer market. We have been collaborating with the national king of convenience store chain Meiyijia to develop its own private label brands to drive its steady expansion towards the target of “100,000 stores”.

        

In the United States, we have succeeded in building the largest Chinese food and beverage import and distribution platform in the North America – OCM Globe Inc., who has extensive distribution networks covering online and offline retailing and food service channels. OCM brings together dozens of Chinese top food and beverage brands, including Genki Forest, Weilong, Haitian, Mengniu, Jinmailang and Daoxiangcun etc. with the mission of “making the world adore and adopt Chinese tastes”.

       

This brochure summarizes the methodology we have been using in consulting and investing for the past 20 years. Generally speaking, the success rate was about 30% for the first 10 years. Putting differently, 1 out of 3 was successful, while the other 2 are less satisfying. For the second 10 years, we have seen significant improvement in terms of success rate with 1 out of 2 succeeding. Over recent a few years, on one hand, we continue to enhance our methodology; on the other hand, we put more efforts in helping clients to build internal innovation system and capabilities with two critical experiments and explorations:

        

Firstly, we advise and drive clients to build in-house innovation department, splitting into two teams competing against each other internally, which we call them Team Red and Team Blue. At the same time, both Team Red and Blue compete against external consultants and mercenaries. Such a combination, Team Red + Team Blue + consultants/mercenaries, plays vital role in innovating. The best case is Jinmailang’s Positioning Research Institute, which was founded in 2017 with only a few people turning into a team of almost 100 people now. This innovation system contribute significantly to Jinmailang’s new product developments in recent years.

        

Secondly, we get our hands dirty and dip our toes deep in the water. We have been deeply involving into the whole supplying and distributing chain of clients. from material and equipment manufacturers such as DuPont, Krones and Sidel to retailers such as Meiyijia, Tmall and Sysco, we visit frontiers as well as endpoints of clients to forge close collaboration and explore innovation opportunities. To be equipped with stronger sense of business and consulting, we have been piloting in co-founding start-ups and co-building brands with clients so that we can truly put our feet into clients’ shoes to understand the obstacles and challenges they are facing every day.

        

The whole world is turbulent. The global industry chain is reconstructing. The restoring of the United States manufacturing is accelerating. China is speeding up in building a united national market. At such historical moment, Wang Innovation would love to share our experiences, learnings, frameworks and methodology over the past 20 years with Chinese entrepreneurs, hoping to help Chinese companies locate potential markets, seize the trends, take the opportunities, formulate great strategies, focus on promising segments, spark great innovations, launch best-selling products, create leading brands and do great jobs to pay tribute to the great time!