Substrates for Innovation

A couple of weeks ago I attended the annual Microsoft ThinkNext event, hosted by Microsoft Ventures and Microsoft Israel R&D group (first time I attended this event was two years ago, when I had the opportunity to demonstrate Wilocity’s technology to Steve Ballmer). As in every year, it was all about innovation and I must admit – it was really inspiring. One of The keynote executive speakers (sorry, I don’t remember who it was) said that innovation is a social phenomenon. That statement made me think -  “Is it a social phenomenon indeed?”

Let’s distinguish between four environments where innovation might ”happen”. Each of these environments is actually a “Substrate for Innovation”:

1. @ Home
2. @ Academy
3. @ Startups
4. @ Large companies

In each environment, the motives, the catalysts and the way innovation is done are different, and hence the way to encourage an achieve innovation is different.

@ Home

Innovation here is done by an entrepreneur or a group of entrepreneurs who have the passion to form new ventures and startup companies. The innovators are either individuals who first had new ideas or inventions and decided to found a start-up, or individuals who decided first that they want to become entrepreneurs, hunted for ideas, cherry picked one they felt good with and built their new venture around it. Their basic state of mind is “entrepreneurship” and in that case it is indeed a social phenomenon. It is epidemic. Innovation hubs, such as the Silicon Wadi, Israel is an example. The number of meet-up events, roundtables, hackathons and other techno-social events where people share their ideas is literally endless. You hear so many ideas, absorb so much information that one thing leads to another and you come away either with original or derivative ideas. On top of that, everyone around you is inventing or building something which makes you feel that if you are not also an entrepreneur – you don’t exist…

Good: If you are in the right state of mind and based in an “innovation hub”. That’s a social phenomenon, and many good start-ups can evolve.

Bad: People tend to establish startups even around non-sustainable business models or plans, in other words:  “That’s not a company, that’s a feature”. Even if entrepreneurs manage to raise seed money around it, it will be difficult to raise more money in the future. This may lead to a “bubble”, so be aware of that.

@ Academy

That’s where people innovate by definition, but usually they don’t innovate for the sake of entrepreneurship, rather for “academic” purposes. In the past, it was not so easy to commercialize university originated innovations, but these days almost every university has a technology transfer entity which enables and supports commercialization of its patents and inventions, using different business models.

Good: Academy can be an innovation machine, there are labs and available talent (usually graduate students) who can work on the invention and take it forward to a proof of concept and prototype fairly easily, without a need for seed funding.

Bad: The invention is shared with the academic institute, and usually the inventors are “torn” between their desire to take an active role in the commercialization process and continue with their pure research and academic path.

@ Startups

Established startups are basically a manifestation of an invention or an innovative idea. By definition they have a domain they are already focused on. Usually any further innovation there needs to be limited to the field where the startup plays.

Good: you are already innovating (and if not, that’s another problem)

Bad: But only within the scope of the start-up. Many people with creative minds, who could have been “serial innovators”, are tied in and fully committed to execute in the specific startup.

@ Large companies

Large companies are usually focused on execution, and serving short term goals. New initiatives usually require many people buying in and result in complex processes. Even people with the right skills can barely find the framework for innovation and entrepreneurship.  This has become not only a problem of the individuals but also of the organizations that fail to come up with new innovations that are related to its business just because there is no suitable framework to foster it.

In recent years though, large companies are taking new approaches to foster innovation and collaboration with innovators, through running or supporting brainstorming events, round tables, innovation labs, accelerators and incubators where they can have better visibility into new inventions, new talent, and take advantage of both, for the sake of their own innovation or growth.

Good: you have lots of opportunities to get exposed to new innovations and startups, and resources to help and support these start-ups

Bad: You are not participating the party… you are an active observer instead

So Now What?

1. If you at the point in your career where you are deciding between some of the options above, be aware of it.

2. If you are working in a start-up or in a large company, don’t close your eyes to the “social phenomena”; attend events, open your eyes, be open to get inspired.

3. If you are a large company, why not to encourage homegrown entrepreneurship through various business models (for example spin-offs)?

Thanks for reading, would love to get your thoughts

Dror

P.S. Please visit my blog at www.sustainablebusinessvalue.com