Innovation Big and Small: Recent Episodes
Squirrel and Jim
What metrics work for measuring innovation progress? It turns out the measurements are very different for small and large companies.
SHOW LINKS: - Burn down charts: https://en.wikipedia.org/wiki/Burn_down_chart - Burn up charts: https://www.modernanalyst.com/Careers/InterviewQuestions/tabid/128/ID/3433/What-is-a-Burn-Up-Chart-and-how-does-it-differ-from-a-Burn-Down-Chart.aspx
Find us at http://jimeuchner.com/ and http://douglassquirrel.com
We take two different views of AI: first, that it's here and ready to go, and second, that we're going to need humans in the loop—"centaurs" that combine humans and computer—for a long time to come.
SHOW LINKS: https://jimeuchner.com/wp-content/uploads/2019/09/Little-ai-Big-AI-Good-AI-Bad-AI.pdf
Find us at http://jimeuchner.com/ and http://douglassquirrel.com
Jim and Squirrel reflect on a recent panel discussion led by Jim on how big (and small!) companies can either destroy engagement or create it through automation.
See Jim's article at https://verisei.com/wp-content/uploads/2019/08/Automation-Manifesto-Verisei.pdf
Find us at http://jimeuchner.com/ and http://douglassquirrel.com
We observe that companies with a long time horizon—like privately held family businesses—are better able to take on the risks of innovation. And we think startups and large businesses have something to learn from these organisations.
Find us at http://jimeuchner.com/ and http://douglassquirrel.com
We reflect on Schumacher's Small is Beautiful and how it applies to startups - a small minority aim for profitable, slow growth - and large firms, who may create small autonomous units to reap the benefits of small organisations.
SHOW LINKS: - Small is Beautiful: https://en.wikipedia.org/wiki/Small_Is_Beautiful
Find us at http://jimeuchner.com/ and http://douglassquirrel.com.
After considering open innovation at large companies last week, we now look at open source innovation, a pattern that has led to huge advances for startups, as they begin with a huge array of software infrastructure freely available to them and therefore can in most cases focus on their business idea rather than technical invention. We also note the trend toward open-source hardware which is even helping patients innovate in their own treatment.
SHOW LINKS: - Dexcom: https://www.dexcom.com/ - MIT Innovation Lab: https://innovation.mit.edu/ - Coloplast: https://www.coloplast.co.uk/
Find us at http://jimeuchner.com/ and http://douglassquirrel.com
It turns out that "open" means very different things at big and small companies. We focus on the large ones this week, where "open" means actively gathering ideas and prototypes from people outside the company, often through explicit requests or competitions.
SHOW LINKS: - Competition platforms: https://www.innocentive.com/ , https://www.ninesigma.com/ , https://www.yet2.com/ , https://www.kaggle.com/ , https://www.topcoder.com/ - Henry Chesbrough: https://en.wikipedia.org/wiki/Henry_Chesbrough
- Open Innovation articles: https://jimeuchner.com/wp-content/uploads/2019/09/two-flavors-of-innovation.pdf and https://jimeuchner.com/wp-content/uploads/2019/09/limits-of-crowds.pdf
Find us at http://jimeuchner.com/ and http://douglassquirrel.com
At big companies, deciding your innovation is ready for prime time is a big deal. At small ones, often not so much—or the decision is left up to the VC market, and the startup dies if the verdict is negative.
Find us at http://jimeuchner.com/ and http://douglassquirrel.com
Startups and big companies alike can get obsessed with the latest, shiniest tech or idea, distracting them from their mission. Often innovation starts because someone sees a way to improve a system, but it's hard to stop disrupting yourself. We look at examples from SpaceX and our own experience.
- SpaceX: https://www.spacex.com/
Find us at http://jimeuchner.com/ and http://douglassquirrel.com
How many business models are there really? Jim reckons there are only 40 or 45 that actually work—plus a lot of Frankenstein models that aren't coherent. We look at a few favourites, some only available to big companies like the growth share matrix model, and some that apply to startups too, like time profit.
- Growth share matrix model: https://www.bcg.com/publications/2014/growth-share-matrix-bcg-classics-revisited
- Experience curve model: https://hbr.org/1985/03/building-strategy-on-the-experience-curve
- Time Profit model: https://artofprofitability.wordpress.com/2014/02/16/model-5-time-profit-model/
Find us at http://jimeuchner.com/ and http://douglassquirrel.com
Jim shares the steps a large company might go through to evaluate an innovative idea and create a business model around it. Squirrel reflects on how these steps play out in a startup - often in the reverse order, i.e. shoot first, then aim!
SHOW LINKS - Paper on the Business Model Pyramid: https://www.researchgate.net/profile/Abhijit_Ganguly5/publication/295560198_Business_Model_Innovation_in_Practice/links/5aec64cfa6fdcc8508b77852/Business-Model-Innovation-in-Practice.pdf - Paul Graham on doing things that don't scale: http://paulgraham.com/ds.html
Find us at http://jimeuchner.com/ and http://douglassquirrel.com
We consider how startups look at IP protection (usually pretty haphazard) and how big companies do (usually much more carefully). We consider "moats" for your innovation and the varying value of patents - depending strongly on your ability to stay alive long enough to win in court.
- IP and innovation paper: https://www.tandfonline.com/doi/abs/10.1080/08956308.2010.11657627
- Joel Spolsky on schlep businesses: https://www.joelonsoftware.com/2007/12/06/where-theres-muck-theres-brass/
Find us at http://jimeuchner.com/ and http://douglassquirrel.com
What motivates big firms to start VC arms? Jim's surprising answer is that (strategically) their goal often is to learn rather than to get lucky on a big bet like an independent VC. But this sometimes backfires as the VC function becomes beholden to finance, who demand an unrealistic bottom-line return.
- Jim's journal, Research Technology Management: https://www.jstor.org/journal/resetechmana
Find us at http://jimeuchner.com/ and http://douglassquirrel.com.