Snap, Microsoft and Tesla are the world’s most innovative companies of 2020, according to Fast Company … Siemens, Sprout World and Elvie lead in Europe
March 10, 2020
Innovation drives the world forwards at incredible pace.
Augmented reality that brings joy into the daily lives of more than 163 million people. Drones deliver vital medicines across the remotest parts of Africa. Brands develop creative business models to reduce society’s addiction to new clothing and single-use plastic. Platforms allow the most obscure talented fiction writers and video producers to become recognised.
Fast Company’s “Most Innovative Companies” ranking is based on companies with great ideas, that can change the world, that disrupt industries, and inspire society. It is less about the innovation statistics (BCG produce a deeply analytical ranking each year, based on R&D spend and business performance, hardly a measure of creativity or quality of strategic innovation).
I love the Fast Company annual ranking for it stories – amazing organisations doing incredible work – and for its drill downs into different sectors, and parts of the world. The top 50 list is a little American obsessed, but look further into the regional list for great innovators. It truly is an inspiring source of inspiration, insight and ideas.
World’s most innovative companies
Here’s this year’s ranking:
- 1. Snap … for meeting the social agenda
- 2. Microsoft … for its collaborative team work
- 3. Tesla … for earning pole position in the world’s EV race
- 4. Big Hit Entertainment … for mobilising and monetising music fans
- 5. HackerOne … for putting hackers to work
- 6. White Claw … for brewing a gender-neatral phonomenon
- 7. Shopify … for enabling the shopkeeper of the future
- 8. Canva … for unleashing corporate creativity
- 9. Roblex … for gamifying gaming
- 10. Zipline … for delivering drugs by drones
- 11. Kaios Technologies … for outsmarting the smartphone
- 12. Beyond Meat … for popularising alternative meat
- 13. Bravado … for turning bands into brands
- 14. Meesho … for adding shopping carts to social posts
- 15. Spotify … for becoming a podcasting powerhouse
- 16. Hello Sunshine … for creating the future of entertainment
- 17. Luckin Coffee … for caffeinating the data-driven restaurant chain
- 18. Merck … for vaccinating against Ebola
- 19. Whoop … for bring professional science to everyday athletes
- 20. Sweetgreen … for streamling retail deliveries
The top 50 ranking is here
Europe’s most innovative companies
- #1 Siemens … For paving an electric highway: an Authobahn that charges hybrid electric trucks. It broke new ground this year in the sustainable transportations pace by opening the first “e-highway” that allows electric trucks to be charged as they drive. This technology, if widely adopted could simultaneously help solve some of the pain-points associated with electric vehicles—and have a massive positive effect on climate change
- #2 Sprout World … for designing a pencil that can be planted in the ground so a tree can grow from its used body. It packs a lot of innovation into a small, everyday object, demonstrating that everyone can make a positive difference. Surreal, yet brilliant.
- #3 Elvie … for fashioning a silent, discreet breast pump that women can use throughout the day. The UK company’s smart, wearable breast pump received FDA approval 2019 and expanded to the U.S. The design allows new mothers to pump through the day, discreetly, silently, and hands-free. It’s a great example of how “femtech” is being created to address the specific needs of women.
China’s most innovative companies 2020
- #1 Luckin Coffee … For brewing the tech-centric chain restaurant of the future. It launched its chain of coffee shops in October 2017, and since then it’s grown remarkably fast, so fast that Luckin surpassed the number of Starbucks outlets in China by the end of 2019, with more than 4,500 outlets. The chain’s distinctive, digital model allows it to learn where its customers are and proliferate its small, pickup-only coffee counters as close to them as possible. Luckin’s focus on data ripples through the rest of its business, informing its decision-making on everything from its staffing to its supply chain. It launched tea and juice last year to offer more choices to its more than 30 million customers, and it introduced a new “partnership model,” which is a new spin on franchising that will allow the company to expand even more rapidly—and globally—while still controlling the data and selling experience. Luckin’s model started to kick in over the course of 2019, with store growth (more than 200%) being outpaced by returning customers (397.5%), and that impressive stat is being lapped by the number of products they buy (470.1%) and the revenue they’re generating (557.6%). “We effectively started as an online model, spending a year setting up the entire operation before opening our first store, so 100% of the transactions give us data,” says Reinout Schakel, Luckin’s CFO and chief strategy officer. “Traditional retailers might have 20, 30, 40%, so you’re always going to have to rely on people making decisions. That’s going to be a big competitive advantage for Luckin.”
- #2 Meituan Dianping … For proving the transactional super-app can be profitable by boosting its food-delivery membership program and increasing its ad revenue. The Chinese super-app, which connects more than 400 million customers to such services as food delivery and hotel booking, did what skeptics did not think possible: Show a profit. To achieve this milestone, the company goosed its transaction volume in food delivery with its membership program, with members on average ordering three times more frequently than other Meituan users. In addition, the company increased its efficiencies across its delivery network, improving its gross margins by the end of June last year (its last financial report) to almost 23%, up from 15.8% a year earlier. With its large user base and almost 6 million active merchants, Meituan benefited from offering advertising services for those businesses to try to reach hundreds of millions of customers as well.
- #3 Alibaba … For powering China’s digital transformation with its “business operating system”. The Chinese e-commerce giant continues to push its technological prowess deeper into the real world. Its aggregation of its digital services for branding, channel management, customer service, finance, logistics, marketing, product development, sales, and more seeks to accelerate the digitization of businesses large and small across China. Flagship customers include Nestlé and Starbucks as well as Universal Parks & Resorts, which intends to use Alibaba’s range of services to serve customers from booking their trip to its Universal Beijing Resort (set to open in 2021) to speeding their entry into the park to running everything on Alibaba’s cloud-computing platform.
Why is Snap the world’s most innovative company?
From the company’s remarkable turnaround to its creation and popularisation of augmented reality, CEO Evan Spiegel talked to Fast Company about how he changed and how he built a structure for innovation.
Spiegel has also pulled off a remarkable comeback from 2018, when Snap itself was said to be ailing. Snapchat lost 5 million daily users over the course of that year. Between its March 2017 IPO and the final weeks of 2018, 17 executives departed. Facebook’s unabashed adoption of Snap’s features—executives have acknowledged the similarity between Instagram Stories and Snapchat Stories, for example, but stated that Stories is a format that it had built upon and not proprietary technology—was taking a toll. An app redesign flopped. Heading into Christmas, Snap’s stock dipped as low as $4.82, 84% off its onetime high of $29.44. Forbesargued, “Why Snapchat’s Trainwreck Stock Will Never Have a Facebook Rebound,” while business pundit Scott Galloway declared the company “roadkill” and predicted that Snap would get acquired before 2020, probably by Amazon.
Unknown to most observers, though, Spiegel had been aware of the issues plaguing the company and had put critical fixes in motion. He worked on his leadership skills and altered Snap’s executive team and management structure to make it more effective at executing on innovations. Snap recoded its Android app so it could run better on the 85% of phones in the world that aren’t the iPhone, and simplified its tools for ad buying, helping it boost revenue year over year by 65% and add 31 million daily users to the platform in 2019. As investors caught on, Snap’s stock price rose almost 250% last year. Although the company is still losing money, Snapchat is poised for international growth. “I’m now rooting for Snap,” Galloway wrote in January after admitting he’d been wrong. “Snap is on the verge of writing its own ‘Cinderella story,’ ” wrote MoffettNathanson analyst Michael Nathanson last summer.
Snap is now ushering in the next wave of computing. While tech giants hope to make augmented reality mainstream within a decade, Snap has already made the software commonplace. On average, more than 75% of Snapchat’s 218 million daily users play with its AR “lenses” every day. That’s more than 163 million people putting silly digital effects like biker beards and puppy ears on their faces. Last year, the company expanded its AR purview even further, turning its attention to augmenting the world around users rather than just their faces, with lenses that can transform buildings into giant pizzas and products into shoppable pages.
Snap has also constructed a formidable premium content business on its Discover platform, which functions like a mini, mobile-optimized Netflix, with five-minute-long shows that users can subscribe to and binge on. There are now more than 450 channels of content worldwide, and in the fourth quarter of 2019, more than 50 shows had a monthly audience of over 10 million people. The first season of one of its teen-oriented scripted shows, Endless Summer, produced by the company behind The Real World and Keeping Up With the Kardashians, racked up 28 million viewers.
“I don’t have to feel trapped by the way everyone else [operates],” says Spiegel. He could build Snap to function in the way that worked best for what he wanted to accomplish. “We can try new things.”