Any way you toss the numbers, it’s shocking: Companies have launched more new products so far in 2020 than in each of the prior two years.
Through just September 2020, companies have rolled out 7% more products than in 2019 and 19% more than in 2018.
That’s despite — or maybe because of — a deadly pandemic, damaged economies in many countries, and massive joblessness. Innovation has remained healthy even during the toughest of times.
What’s most interesting in the data is how product rollouts differ among small, mid-market, and enterprise companies that have faced unprecedented challenges in 2020.
ZoomInfo analyzed press releases and media articles captured in its Scoops feature to track new product and service releases. Because press releases and articles are long-time approaches to publicizing new products, these formats serve as good product launch and innovation indicators.
Small companies show spunk in total launch numbers
Smaller companies — those earning $100 million or less annually — released the majority of new products by volume compared to other businesses from 2019 through September 2020.
This year alone, small firms rolled out nearly three times as many products as companies with $1 billion-plus in revenue and five times as many as mid-market companies.
Small companies can be highly innovative and entrepreneurial, and the launch volume may reflect survival instincts. Most, if not all, low-earning firms have a limited amount of products and need to release them to keep revenue coming in.
Granted, there are far more small companies than large ones, according to ZoomInfo data. Nearly 9 million companies take in revenue of $100 million or less compared to about 65,500 firms that earn more than $100 million.
Still, the vitality of the small business sector can’t be ignored, particularly given how hard hit these companies were by the pandemic in 2020.
Mid-market organizations struggle
Mid-market companies — those that pull in from $100 million to $1 billion in revenue — consistently sink in total product releases compared to smaller and larger firms.
Medium-sized organizations are innovating less, and, in fact, as of September 2020, they released nearly 10% less new products compared to 2019. Small companies and enterprises saw the reverse trend, seeing increases in new launches in 2020.
Why does this gap exist? ZoomInfo’s numbers don’t provide clear-cut answers, although there are theories.
Hitting $100 million is viewed as a graduation from startup status, and with it comes greater financial pressures to meet numbers, particularly if the company intends to go public at some point. In such cases, medium-sized businesses may be more apt to pursue upsell and cross-sell opportunities rather than spend money cultivating new customers.
An additional curb on innovation: Mid-market firms did not qualify for the U.S. Payment Protection Program during the pandemic and thus may have furloughed or laid off workers to contain costs.
Larger companies are more likely to launch products
The largest firms — those earning more than $1 billion annually — have done the best at innovating new products relative to the total number of businesses in our sample.
By ratio, the percentage of companies releasing products jumps quickly after a firm hits $1 billion in revenue, likely owing to larger marketing, sales, and product teams.
Also, larger companies will go after opportunities more aggressively through innovation, with the spending to back it up.
Conclusion: Innovation pushes forward
Two main findings are evident from ZoomInfo’s analysis of product release data.
First, despite adverse conditions in public health and the economy, product launches have shown no sign of slowing in 2020 compared to the prior two years. Yes, companies have shuttered during COVID-19, but those that survived generally continue to innovate.
Second, mid-market companies appear to face product pressures that smaller and enterprise businesses do not deal with as heavily. The result is a dip in new product launches that is noticeable for the past three years. This stifled innovation is a worrisome trend as many medium-sized organizations struggle to find their footing heading into 2021.
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