EVERYDAY INVENTIVENESS™

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…

Want to launch your own crowdfunding campaign? Heed the 5 P’s of Crowdfunding:

The Five P’s of Crowdfunding:

1. Planning
   Want to create a great crowdfunding campaign? Have a clear vision, value proposition, and a well-defined target. Pick milestones for your deadline. Determine the “best fit” platform based on your campaign goals and needs.
2. Pitch
   A good crowdfunding pitch is like any good investor pitch. Tell a compelling story. You need a great title and greater visuals. Explain the problem you solve. Pitch the impact your product/service/cause provides to the world. Explain how you plan to use the funds you raise.
3. Perks
   Incentivize campaign backers with giveaways, keepsakes, experiences, even third party rewards. If you are running an equity crowdfunding campaign, explain how you will return profits. For many campaign contributors, “feeling like they made a difference” can be a perk in itself.
4. Production Video
   Crowdfunding campaigns with videos raise 120% more than those without one. Your video should be both entertaining and educational. Humor is handy.
5. Promotion
   The most critical (and challenging!) part of crowdfunding is promotion. You need to attract interest and inspire contributions. Use social media and traditional media to build buzz. Ask others to share your crowdfunding campaign with their friends and networks. Consider holding a live or virtual campaign kickoff event. And don’t forget to say thank you.

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:
1. Fortune Magazine
2. Journal of Product Innovation Management
3. Harvard Business Review, December 2012

ADDITIONAL RESOURCES:
- The Fuzzy Front End Innovation (a definition)
- The Back End of Innovation (a definition)
- RE:INVENTION’s sister strategy site, www.everydayinventive.com.
- “Why Good Business Basics and Great Marketing Matter More Than Innovation” – the presentation

Earlier today, Groupon fired CEO Andrew Mason. Mason posted his exit letter publicly, noting that it would eventually be leaked to the press anyway.

Mason’s letter begins:
“After four and a half intense and wonderful years as CEO of Groupon, I’ve decided that I’d like to spend more time with my family. Just kidding – I was fired today. If you’re wondering why… you haven’t been paying attention. From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that’s hovering around one quarter of our listing price, the events of the last year and a half speak for themselves. As CEO, I am accountable.”

…it continues:
“If there’s one piece of wisdom that this simple pilgrim would like to impart upon you: have the courage to start with the customer.”

Read more

Welcome to RE:INVENTION’s Tuesday Toast. Each Tuesday, we toast innovators and roast the “toasted” (troubled companies that forgot business basics or failed to commercialize disruptive ideas).

TOASTING!

A toast to Steve Case, in honor of his birthday. Steve — the co-founder of AOL, chairman of the Startup America Partnership, co-chair of the National Advisory Council on Innovation, and co-chair of the Revolution Growth Fund — has been a big proponent of crowdfunding startups. He was inducted into the Junior Achievement Hall of Fame in 2009. One of our favorite Steve Case quotes? “You are only as strong as your team…If you don’t have the right people, no matter how smart you are, no matter how good your idea is, you’re not going to get very far.” Brilliant. Here’s to you, Steve Case. Happy birthday!

Read more

Welcome to RE:INVENTION’s Tuesday Toast. Each Tuesday, we toast innovators and roast the “toasted” (troubled companies that forgot business basics or failed to commercialize disruptive ideas).

TOASTING!

A toast to Entrepreneur Magazine’s innovative and inventive 2012 Entrepreneur of the Year finalists. A grand total of fifteen finalists have been announced in three categories:

Read more

“You become what you disrupt.”

The Dave McClure / 500 Startups “#UNSEXY CONFERENCE” is breaking buzz sound barriers today. Many tweeps are retweeting a meme quipped during one of today’s sessions by Jesse Robbins, CEO of Opscode / O’Reilly Radar contributor / and Co-Chair of the Velocity Conference. The quote? “You Become What You Disrupt.”

Jesse Robbins originally advanced this theory in 2007. Back then, he used Skype to illustrate his point. Alas, the glory days of Skype are long over. Skype has had its share of problems and it only gets worse (it lacks context, it’s de facto illegal in many countries, and overwrought with bugs, crashes, patches, and fixes). But back then, Jesse upheld Skype as a shining star example and declared, “you become what you disrupt.”

As kindly as we can put it, that’s a load of bullocks. Then and now.

Disruption is temporal. You don’t become what you disrupt. You become what you sustain. Disruption by no means equals sustainable success. You may successfully disrupt but fail to be successful. Disruption creates an opportunity to become something else *OR* flame out quickly. You are creating a space for evolution. And unless your company is prepared, poised and perfectly positioned for EVOLUTION — pursuing unmitigated disruption and revolution will merely accelerate your path to failure. Laurence Capron’s recent research proves what we already know instinctively: business survival depends on differentiated products and services, multifaceted growth strategies, and management leadership capabilities.

A few poignant stories:

Read more