Smart Business Magazine, Sept 2012

September 2012 Smart Business Florida 5 LEARNING INNOVATION FROM HOLLYWOOD Successful industries respond early and appropriately to new technologies and new ideas Scott Kirsner spent three years immersed in the movie industry in order to write a book called Inventing the Movies Hollywoods Epic Battle Between Innovation and the Status Quo from Thomas Edison to Steve Jobs He talked with directors like Francis Ford Coppola and James Cameron editors cinematographers studio chiefs producers tech companies that sell technology into Hollywood and even actors with an interest in new technology like Morgan Freeman He discovered that Hollywood serves as a great case study for how any long established successful and self satisfied industry responds to new technologies and new ideas Even when a new idea seems to have obvious merit and even when its inventor can make a strong case for it 95 percent of the people involved in the industry fight the new idea with all their energy for as long as they possibly can until they realize it has the potential to grow their business in surprising ways Case in point Within a decade of Hollywoods fight against the Betamax video recorder which went all the way to the Supreme Court the studios were earning more from home video business than they were from ticket sales Here are several movies all of which youve likely seen each with an important backstory that innovators can learn from Sometimes technology needs to be just good enough not perfect The Jazz Singer will forever be remembered as Hollywoods first talkie even though it wasnt among the first dozen to try to sync up the pictures on the screen with a soundtrack But the technology that Warner Bros banked on developed at AT Ts Bell Labs was better than what came before it It was just good enough to turn The Jazz Singer into a hit especially combined with a performance from Al Jolson that practically leapt off the screen The system still relied on phonograph records that could scratch If the film broke and needed to be spliced back together the entire movie would veer out of sync The Warner Bros AT T technology was just good enough to start the sound revolution in Hollywood though it didnt endure for very long as a standard Five years after The Jazz Singer even Warner Bros had switched over to a technology that more reliably linked the audio with the visuals Innovators never underestimate the importance of allies Shot in glorious Technicolor Gone with the Wind won the Best Picture Oscar in 1939 marking the start of Hollywoods transition from black and white to color But Technicolor had been working on its technology for making color movies since 1915 developing new kinds of cameras and film processing techniques Like most start ups the company nearly ran out of money several times and had to continually hunt for new investors and allies whod make movies using Technicolors technology to show how it was improving These allies included the swashbuckler Douglas Fairbanks and Walt Disney who won one of his first Oscars for a short cartoon made in Technicolor Technicolor co founder Herb Kalmus met another key ally at the racetrack at Saratoga Springs Jock Whitney a rich playboy who used his money to option a novel by Margaret Mitchell and help turn it into a movie starring Clark Gable and Vivien Leigh Innovators spot market opportunities first and chase them relentlessly Entrepreneur Andre Blay had no connection to Hollywood but in the mid 1970s he was among the first to realize that home video machines like Sonys Betamax which sold for about 1000 at the time presented the potential for a new business He sent cold call letters to most of the major Hollywood studios asking them for the right to sell their movies on videotape Only one studio 20th Century Fox consented offering movies like Butch Cassidy and the Sundance Kid Blays first ad in TV Guide netted his company 140000 in revenue and within a year Fox acquired his company for 72 million in cash Innovators find collaborators who share their vision and theyre prepared for things to take longer than expected Computer graphics pioneer Ed Catmull while he was still a graduate student at the University of Utah was one of the first people on the planet who believed that itd be possible to make a full length computer animated movie that people actually would pay to see As he marched toward that goal he connected with two people who bought in to his vision John Lasseter an ex Disney animator and Steve Jobs who purchased the fledgling Pixar from George Lucas and helped develop it into a company that could stand on its own two feet selling hardware and software while also pursuing Catmulls ambitious audacious goal Catmull admits that he thought the goal of making Pixars first film would take a decade it took two Disney eventually bought Pixar in 2006 for 74 billion As a business owner there are many lessons to learn about innovation from the movies Guy Kawasaki GUY KAWASAKI is the co founder of Alltop com an online magazine rack of popular topics on the Web and a founding partner at Garage Technology Ventures Previously he was the chief evangelist of Apple Kawasaki is the author of 10 books including Enchantment Reality Check and The Art of the Start He appears courtesy of a partnership with HVACR Business www hvacrbusiness com where this column was originally published Reach Kawasaki through www guykawasaki com or at kawasaki@ garage com Click or scan to read more columns by Guy Kawasaki On Point