What's behind every industry-shaking innovation? Countless, but crucial, "mini-innovations," as Joe Fox calls them. Along with his brother, Avi, Fox has founded two companies — in entirely different industries — that aimed to challenge the traditional business models. But in an interview with MIT Sloan Management Review, Fox explains that these large-scale innovations don't dawn on him all at once. Instead they arrive in fragments, some of which are conceived by his management team of original thinkers. The Fox brothers set the group to work after they've spotted a broader opportunity, which happens when they aren't looking for one.
Their first business, an online brokerage called Web Street, grew out of their own experience trading equities. And they constructed the framework for BuySide Realty, an online real estate brokerage — which they currently operate, along with a subsidiary called Iggys House — when prowling around for a vacation home.
After the initial inkling, Fox's market research consists not only of asking potential customers, but also of actually paying attention to their answers. What he's looking for is not their opinion of whether an idea can possibly be executed; he just wants to know if they would pay for such a service, assuming he could bring it into existence. Not that he's had an easy time bringing a notion to fruition. He's never been able to strike a deal with any institutional investors, although Web Street did successfully go public during the dot-com boom in 1999. He had hoped to repeat that feat with his current venture last year, but opted to wait for Wall Street's appetite to improve.
In the meantime, Fox is counting on a steady supply of "mini-innovations" to keep the business ahead — by a half-step, at least — of its megacompetitors. Can he do it? Clearly, he thinks he knows how.
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