WHAT INNOVATIONS COULD RESULT FROM CROSSING THE THRESHOLD INTO THE BOILING POINT?
After working for years in advertising, developing new product efforts with big name companies like Coca-Cola and Proctor & Gamble, Mark Payne, co-founder of innovation company Fahrenheit 212, realized there was a common gap in the way corporations went about new product creation.
“What was coming out of the pipeline wasn’t very interesting or was lacking any foundation of how an idea could make money,” said Payne. “Fahrenheit was born in the gap between strategy that lacked any creative embodiment to sell to the consumer and creativity that lacked strategic foundation.”
Payne and Fahrenheit co-founder Geoff Vuleta realized that they needed to forge two processes that really didn’t coexist in any type of innovation company – bringing together what Payne describes as strategic and commercial savvy thinking with a creative X factor.
What was born was an innovation consultancy that catalyzes top-line growth by framing strategies, creating new products, brands and businesses, and driving them to market.
“It could connect dots that no one else has and it could create new opportunities, which we shorthand as ‘the money and the magic,’” Payne explained. “That’s what makes Fahrenheit 212 unique. It does put us in a category of our own in many ways.”
Payne and Vuleta met while working in advertising. The two went on to form a partnership that saw Vuleta looking after the development of the business while Payne drew on his twenty plus years experience in the creation of new businesses, brands and products to establish himself as the company’s Head of Idea Development.
Fahrenheit 212 markets itself as an innovation consultancy that creates a far more complete proposition – with a greater chance of working in the world – for its clients than other categorically similar companies.
“What we do that is more unique is to build an idea with a high-level of creative acumen that is truly differentiated and magical as an experience and a product, with a well-defined and well-told story,” expressed Payne. “But, from the other side, things that are strategically and financially robust.”
He added that Fahrenheit defines a large and conclusive reason for a particular product to exist within a company. They also define the long-term “big win” for a company by analogizing the product financially and dissecting ideas on how they could actually manufacture it.
Innovation consultancy companies work much earlier in the food chain than marketing and communications companies – some 18 months to 3 years beforehand. Marketing and communications companies are brought in after a product has been well defined. Often companies will hand Fahrenheit a blank page with a big number across the top. According to Payne, Fortune 500 companies will want them to find up to an additional half billion dollars in revenue from new products and services.
“We’ll go out and look at all the things that they have that we could use. We’ll understand all their technologies, all their capabilities, their distribution and all the capital assets that they have and use those as the canvas to paint on for ideas that will deliver big, new revenue,” he said. “In some cases, it represents creating an entirely new category that no one is competing with, and in other cases it will be to put them into an entirely new business.”
Recently, Samsung hired Fahrenheit 212 to open up a new market for their LCD panels. Those panels are regularly used in televisions, phones, and computers and Fahrenheit created a new business for the technology giant in vending machines, with a technology known as uVending. uVending is an interactive technology that tells you when your inventory is low and which product is most profitable, and it will even alert you when you’re being vandalized.
“It completely changes the consumer experience in the business of vending machines by marrying LCD screens with wireless connectivity and a data management platform,” explained Payne.
He said that in order to create a new business for any company, on the simplest level, two things need to be proved – that it’s going to excite a consumer and that it’s going to work as a business.
To spark a consumer’s interest, a need has to be found that has been previously unmet by what is currently available in the marketplace. In broad strokes, for it to work as a business, its feasibility has to be examined in terms of its economics – Could it make money? Will it scale upward to a big level over time? Could it be made in the current factories? What kind of capital requirements are there?
Fahrenheit 212 has worked with Fortune 500 companies such as Coca-Cola (both in the U.S. and overseas), Hershey’s, Samsung, LG Electronics, Best Buy, Campbell’s Soup, Citibank, Adidas, Charles Schwab, Gucci Group, Imax, Nestle, Lowe’s, NBC, Proctor & Gamble, NutriSystem, Starwood Hotels, and Time Warner Cable.
Payne and Vuleta’s innovation company worked with Coca-Cola’s green initiative, which resulted in a bottle that is now made up of 30 percent plant material.
A little closer to home in the Hudson Valley, Fahrenheit has worked extensively with Tuthilltown Spirits, a distillery located in Gardiner, NY.
“You can see Hudson Whiskies showing up in liquor stores – those beautiful little stout bottles. It’s been quite a runaway success and they’re a client of ours as well,” stated Payne.
“Most of our work is with Fortune 500 companies but a case like Tuthilltown is an example where we sort of stepped in and helped a smaller company grow.”
Payne began his career in the advertising world in the mid-80’s and it so happened that many of the projects on which he worked had to do with new products. He first worked for an advertising agency in New York City, then worked in advertising in Europe and in the Far East for a big chunk of the 1990’s, with a large focus on helping Proctor & Gamble introduce new products all across Asia.
“That taught me a great deal of lessons about what goes right and what goes wrong in innovation,” assured Payne.
Once Payne returned to New York in 1999 he began to think, immediately, about how to do nothing but innovation for a living. By 2002, Vuleta and Payne had formed Fahrenheit 212 – a name they conceived while thinking about the way water becomes a physical force when it crosses the threshold from 211 degrees to its boiling point at 212 degrees.
“I came back to the States from Australia in 1999 and really started laying groundwork for a new way to think about innovation. A big part of it was presenting these perspectives on new ways to do innovation to A.G. Lafley, who was the CEO of Proctor & Gamble at the time. He encouraged us that we were on to something really huge and that helped us get Fahrenheit going,” he said.
Payne, a Woodstock resident, spends half his time working from home and commutes into the city the other half. He noted that many of his ideas are developed while riding the train into New York.
“Everyone thinks I’m crazy because I have a two-and-a-half hour commute, both ways. But it’s amazing how many of the ideas we’ve done have been born on the Amtrak – it’s just an incredibly inspiring, creative atmosphere up in Woodstock in the Hudson Valley, which has certainly fed into our success here.”
By Chris Miller
Hudson Valley Business Journal
February 14, 2011