EVERYDAY INVENTIVENESS™
“Being negative is not how we make progress.” – Google’s Larry Page, Google I/O Conference, 5/15/13 Yesterday, Facebook friend Dave Morin (brainy CEO of Path), posted a quote from Larry Page’s May 15th Google I/O 2013 presentation. Larry Page’s quote: “Being negative is not how we make progress.”
No disrespect to Larry Page (he’s a smart guy), but that’s myth disproved by mountains of scientific research. Being negative can actually be healthy (both personally and professionally) and propel progress. Martin Seligman’s University of Pennsylvania research found that optimism can prevent people from seeing reality with necessary clarity and foster complacency. A University of Waterloo study found that negative thinking can improve your finances. University of Chicago research found that negative feedback inspired experienced professionals to strive harder than positive feedback. A European study of 40,000 people found that being overly optimistic was associated with a higher risk of disability and death. Illustrious innovator and inventor Thomas Edison agreed. “Discontent is the first necessity of progress.” – Thomas Edison
“Negative results are just what I want. They’re just as valuable to me as positive results. I can never find the thing that does the job best until I find the ones that don’t.” – Thomas Edison Does being negative kill progress? No. A healthy dose of pessimism can motivate you go out there and make it happen. Other biz “taboos” with surprising benefits: renegade thinking, rewarding failure, creative destruction, team competition, productive friction, and collaboration with competitors. No hard feelings, Larry Page. Your dad was a computer science professor at MSU and I’m a loyal Spartan. Sources: Additional Sources:
The Lean Startup Movement proclaimed the power of the pivot (“quick course corrections from one idea to the next”). Eric Ries and his band of merry men have convinced entrepreneurs everywhere that pivots are the salvation of startups. The problem with pivots? When you pivot, you trade a set of known problems for a new set of unknown problems.
True success takes time. You succeed by learning, through incremental gains. Pivots can prevent learning and mask the real problem: bad execution. “We pivoted” often means “our execution sucked.” Most startups pivot too soon, rather than improving execution of ideas that have yet to reach their full potential. Successful startups set vision, think big, execute well, and evolve incrementally.
In his recent Huffington Post column titled, “Why Most Venture Backed Companies Fail,” brainy BTM Institute founder Faisal Hoque agrees. “As many as 75% of venture-backed companies never return cash to investors, with 30-40% of those liquidating assets where investors lose all of their money. The success rate of private equity firms isn’t much better,” Faisal writes. “Money doesn’t guarantee success; only effective execution can deliver that goal. I believe improving the odds for venture-backed companies requires better execution. Creating value from any venture is hard work…” Research points to the challenges of execution/commercialization: 70% of CEOs who fail do so not because of bad strategy, but because of bad execution.¹ For every seven new product ideas, only 1.5 are launched, and only 1 succeeds.² Tempted to pivot to something new? You might do better by taking stock of your assets and executing upon them better. According to a Bain & Company study, 9 out of 10 companies that revived growth after a downturn did so by better leveraging existing assets rather than pivoting to new ones. Ideas have to be executed well to generate value. Before you change course and pivot prematurely, ask yourself if your real problem is execution. REFERENCES ADDITIONAL RESOURCES
Yesterday I spoke about the perks and pitfalls of crowdfunding at Digital Hollywood 2013. The extraordinary panel included notable L.A. business leaders: Mark J. Landay, Harvard Business School Angels of Southern California Co-Chair; John Shiple, FreelanceCTO.com Founder; Brian MacMahon, Your Office Agent founder; and Victoria Silchenko, Chair of the Los Angeles Venture Association. According to Massolution’s 2013 Crowdfunding Industry Report, crowdfunding soared to $2.7 billion in 2012, up 81% from 2011. Donation, sales, and rewards-based platforms such as Kickstarter and Indiegogo grew 85% to $1.4 billion. Lending-based crowdfunding grew 111% to $1.2 billion. Equity-based crowdfunding grew 30% to $116 million. With the JOBS Act and pending new policy formulation, many are speculating that equity crowdfunding could be the real game changer. Last week, AngelList announced that they are rolling out AngelList Invest, their own equity crowdfunding service. Crowdfunding campaign success is not just about the dollars raised. It’s about validation, proof of concept, learning, and research. To that end, many Digital Hollywood audience members were shocked when I suggested that Zach Braff’s new “Wish I Was Here” crowdfunding campaign was the most successful crowdfunding campaign of all time — more successful than the recent over-hyped Veronica Mars Crowdfunding Campaign. Here’s my rationale… WHY ZACK BRAFF’S CROWDFUNDING CAMPAIGN IS THE MOST SUCCESSFUL CROWDFUNDING CAMPAIGN OF ALL TIME
While the Veronica Mars crowdfunding campaign raised more capital and wooed more backers than any crowdfunding campaign in history….it was already a known Hollywood franchise. Warner Bros. owns all rights to Veronica Mars. Strings were attached. Asking fans to donate to something they already know is very different from asking fans to donate to a completely new independent project (even if Braff himself is a known entity). Braff is a celebrity, but in the end he is still just a passionate person with a small nugget of an undeveloped idea. Braff’s crowdfunding success without the association/backing of a big studio reveals the promise of crowdfunding for entrepreneurs. Braff has also received volumes of critical feedback about his idea; he now knows his biggest barriers and challenges before starting production as an independent filmmaker (note: he’s got plenty). Braff’s crowdfunding campaign success means much more than the Veronica Mars campaign — ultimately making it the most successful crowdfunding campaign of all time. And Braff still has 25 more days of fundraising to go before his campaign ends.
Hungry for more details? CLICK on the image above to expand our nifty Crowdfunding Infographic.
The biggest hurdle to innovation? Implementation. While you may or may not agree, it’s one of RE:INVENTION’s core beliefs. We’ve even been contemplating licensing or building an enterprise management platform to track innovation implementation and performance metrics. While discussing the potential platform with a fellow CONNECT San Diego Entrepreneur in Residence, we were surprised to hear him scoff at the idea. “Innovation doesn’t need a metrics/management platform,” he said. “Innovation is about idea generation. It happens in a room, between people. Innovation isn’t something you can manage.” INNOVATION DOING VS. INNOVATION THINKING Innovation consultants typically focus on the FUZZY FRONT END OF INNOVATION (“idea generation and innovation thinking“). Wrangling ideas can admittedly be tough, yet companies like Spigit and Brightidea have created software to assist with ideation projects. Empirically, however, most companies fail at the BACK END OF INNOVATION (“bringing ideas to life, the execution/implementation of ideas, also known as commercialization“). The world is littered with great ideas, poorly executed. People, process, and project management are all part of implementation. Research points to the challenges of execution/commercialization: 70% of CEOs who fail do so not because of bad strategy, but because of bad execution.¹ For every seven new product ideas, only 1.5 are launched, and only 1 succeeds.² Companies that have a history of converting innovation into ACTUAL GROWTH outperform the market by an average of 78 basis points a month.³ At RE:INVENTION, we believe that innovation creates sustainable value. No value creation, no innovation. And ideas have to be executed well to generate value. EXAMPLES, PLEASE Qualcomm is great at chips R&D and licensing – they’ve stumbled with execution when they’ve attempted to bring consumer ventures to market (FLO-TV™, Skifta™, next up Digital Health). Biotech companies struggle with commercialization as well – perpetual research then they get gobbled up like San Diego’s Life Technologies because they under-perform when it comes to bringing their research-driven ideas to market. Sony Reader, Microsoft Surface, and some might argue the Chevy Volt — innovative technologies that fizzled because of flawed execution. What drives science (and technology innovation) does not drive business. In the majority of cases, the market for a new scientific advancement or truly innovative product doesn’t exist at the outset and you have to create it. No matter how good the idea, if you can’t build the market, construct an ecosystem, and win customers, your innovation will fail. Companies with weak commercialization capabilities inevitably also have faulty fuzzy front-end innovation processes — their commercialization capability blindspots prevent them from seeing problems they will encounter while executing their “cool ideas.” Glaring vision gaps can be fatal. Does this mean that Qualcomm or biotech companies should walk away from bringing new products to market? No. Heck no. Any company has the potential to improve its commercialization capabilities. Companies also have the potential to lose their go-to-market edge. Samsung’s recent success is propelled by great execution. Apple’s reputation for execution has been faltering post-Jobs. EXECUTION MATTERS THE HEADLINE HERE: when companies understand how to adapt, evolve and commercialize products rather than merely invent them – they survive and thrive. Alas, there is no single path to success when it comes to commercialization. There are many ways to go from the incubator, lab, or storyboard to the store. What works for some companies may not work for all. But there are basic fundamentals that can increase the likelihood of commercialization success. Community building, collaboration, communication — as well as concept validation, critical path analysis, capital financing, concept protection, channel management, competitive pricing, and continuous improvement — are ALL part of commercialization and implementation. Great ideas and innovations are not enough – you have to get them to market. In fact, that’s why we created RE:INVENTION’s 12 C’s of Commercialization Guide. Rather than advancing a rigid process or methodology, RE:INVENTION’s 12 C’s inject planning and discipline via a flexible/adaptive framework. The 12 C’s do not need to be sequential. Companies may emphasize some C’s more than others based on their industry and current challenges. So what do you think? Do you agree? What’s the biggest hurdle to innovation? Do you think an enterprise management platform that tracks innovation performance metrics can improve implementation? REFERENCES: ADDITIONAL RESOURCES:
Last week, RE:INVENTION friend, Ralph Ohr, wrote a blog post titled, “Evolutionary and Revolutionary Innovation” in response to recent discussions with RE:INVENTION and a blog post written by RE:INVENTION CEO’s former Entrepreneur Magazine editor, Rieva Lesonsky. In his post, Ralph suggested that companies must pursue both revolutionary and evolutionary innovation to survive. He postulates that evolutionary innovation focuses on orientation towards today’s customers and revolutionary innovation focuses on orientation of tomorrow’s customers. That only revolutionary innovation is associated with uncertainty. Hat tip to both Ralph and Rieva for their thought-provoking blog posts. With respect, we disagree. We must own a different dictionary. Innovation consultants often amuse us with their semantics and misuse of terms. HERE’S OUR RESPONSE…..
While Wall Street and the rest of the world debate whether the Apple patent victory ruling versus Samsung is good or bad for innovation, RE:INVENTION is busy contemplating “SPEED TO MARKET.” Does the Apple/Samsung ruling suggest that speed to market offers clear competitive advantage? Does the ruling imply companies should focus on first mover disruptive innovation and surging ahead? Speed at all costs (ala Lance Armstrong)? Nope. Time for a refresher course… According to business guru Jim Collins, there are three scenarios in which speed to market does guarantee a sustainable advantage like that gained by Apple over Samsung: (1) if you can secure ironclad patent protection (2) if you can set a proprietary industry standard, or (3) if you can use your lead to establish such a beachhead that even if better options become available, your customers will find it too much of a hassle to switch.  |
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Commercializing Inventiveness™
