Our best innovations? Beer and pizza

What have been the great investment opportunities of this decade? Artificial intelligence? Robotics? The commercialisation of space, solar power, driverless cars or the intelligent home? There is immense excitement around all these things but some of the decade's best performance has come from more mundane businesses, such as beer and pizza.

In this country, Brewdog has just become the first £1bn crowdfunded company, with its aggressively marketed craft beers. In the US, Domino's Pizza has emerged as the most spectacular success in the S&P 500, with shares up 2,000% since 2010. Smart entrepreneurs can make as much, if not more, money for investors by reinventing old industries as they can by creating new ones.

A boost for crowdfunding

The spectacular rise of Brewdog will give a huge boost to the UK's fledgling crowdfunding industry. The company was founded in 2007 in the Scottish town of Fraserburgh and brought a fresh attitude and aggression to an industry increasingly dominated by a few multinationals making tasteless fizzy beer. It tapped into the demand for artisan products, and combined this with effective word-of-mouth marketing.

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Meanwhile, a new study of the top performers in the S&P 500 found that investors have done best with a company you might think was dull: Domino's, the ubiquitous takeaway pizza chain.The only tech company to do nearly as well was Netflix perhaps because eating pizza and binge-watching television makes them complementary companies. Since 2010 Domino's has turned around its reputation for cardboardy food and invested in technology: its latest experiment is making deliveries by drone.

Investors have grown used to the idea that spectacular returns are made only in new technologies or in developing, frontier markets. Everyone else was plodding along with growth of 3% or 4% a year at best. So what exactly are companies such as Brewdog and Domino's doing right?

First, they are innovating with traditional products. You don't need a new product to grow rapidly; all you need is to find a fresh way of marketing your old one, give it a slick update, or rebrand it. You can see this with Tesla, which has just overtaken General Motors to become America's most valuable car maker. Cars have been around for over 100 years, but Tesla's electric vehicles are shaking up the industry.

Second, these firms are taking market share from lazier competitors. There is a cycle in which firms expand quickly but build up bureaucracy and so many layers of management that an innovative idea is crushed. That gives the new entrant an opportunity. Something similar has occurred in this country, where Aldi and Lidl have taken market share from the established supermarket chains.

Think differently

Finally, Brewdog and Domino's are competing in huge, established markets. People already like the product but are open to it being presented in a new way. Brewdog brought a youthful attitude to its marketing; Domino's grasped that there was space to compete on flavour. EasyJet and Ryanair did this in air travel, as the cheapness of their offer was innovative.

The lesson is surely this: even the most mundane industries can be reinvented, by smart entrepreneurs or managers who think differently. You don't have to invest in something new to make a lot of money. Something old is often better if you do it the right way.