Innovative companies are flexible

Innovative companies are flexible. Although innovative companies are bound to face some amount of failure simply because innovation requires taking risks, truly innovative companies understand that sometimes you can segue a failure into a success. Sometimes a product flop is just one small tweak away from a huge success.

For instance, at one point Anheuser-Busch took interest in popularizing the Asian trend of serving beer over ice. When early attempts did not produce positive results, Anheuser-Busch began looking into what other products worked well over ice. Cocktails — such as margaritas — are good over ice. Thus, Anheuser-Busch started selling premixed margaritas. The product was basically a flop. So the company tried again and this time they ended up releasing Bud Light Lime-A-Ritas, which come in beer cans and are marketed as margarita beers. That product generated over $500 million in sales in the first two years and, even better, most of those sales were in the form of category expansion. That is, Anheuser-Busch wasn’t just shifting existing customers from one product to another; it was actually adding customers in a new demographic.