Innovation and The Entrepreneurial Cycle

Starting a business or developing a product or service requires taking an idea an integrative life cycle. An idea can not come to be without taking it through a rigorous process of innovation where every element of the idea is inspected, tested and developed. According to Professor Admondoza, "There is the lifecycle of the product/service and the lifecycle of venture (business), the latter illustrates funding types and sources along the lifecycle. Also along these life cycles are points where intellectual property needs to be considered. The lifecycle concepts also explain the why and how of corporate innovation and venturing." The graphic below shows a depiction of how a business looks at different stages of said life cycle:

(image from: http://evolvitas.com/2011/06/01/avoid-issue-starting-small-business-startup/business-lifecycle/)

There are many different elements and pieces of the puzzle that need to be examined and adressed when starting a business or bringing an idea for a product or service to life. Without addressing these elements properly you decrease your chance of success astronomically and decrease your chances of gaining outside funding support partners.
 

In the article Raising Money for New and Emerging Companies,  Frank Demmier explains the different stages of the lifecycle of creating a business.He says, "All industries, businesses, and products pass through the four stages of a life cycle: Embryonic, Growth, Maturity, and Decline." What he is saying is that basically every company that begins goes through a similar process; someone has an idea for something (a product or a service), goes through testing, conceptualizing and funding, implementation, growth, becomes a steady business and then either declines or stays steady. This is true for almost all businesses.

The Embryonic Stage is where a business begins and is able to go from idea to a feasible company through set stages. This is the stage I will explain most as it is the determining stage for if a company is able to move along in the growth process. To understand the Embryonic stage you can think of a human embryo as an analogy for this stage; this is where the business is at it's conception and starting on a journey of growth. Within the Embryonic stage there are five phases of development  The picture below depicts these stages with a brief explanation.

These phases are where the business is put through a process of questioning and examination of growth  potential. The business idea and model are tested and hypothesizes and looked at to see if they will be able to grow into a business past this first conception of idea. The Embyonic phase can take a great deal of time and and money as it takes a lot of testing of concept, and many times multiple different testings. The Embryonic phase is essential to make sure that the right amount of testing and questioning of the idea are done so that once the business makes it through this stage, it has proof of viability and uncertainty should be reduced. 

To depict the money that is generally needed for each phase Demmier chose to use this graphic: 

How businesses get money during this phase is to provide potential lenders with low uncertainty of repayment once the business launches. 

These stages generally apply to start-ups as established companies only innovate with these stages, they do not bring their entire company for the most part through the stages. Larger established companies only innovate in small areas, but apply these stages to an innovation. In class we heard from a speaker who did just this and innovated at a large corporate company. The stages he followed to get his idea implemented followed the lifecycle concept. He first told people about his idea and gained backing from significant sponsors in the company. He then had to gain funding for his idea so that he would be able to employ testing. Once he gained funding (which was easy to get being part of a large corporation) he was able to test his idea internally to provide sponsors and the company with proof of concept. Once the company embraced his idea (verification & demonstration) he was endorsed to be able to bring his idea externally (bringing idea to market/commercialization) where the company was able to bring this innovation to the public. This example shows how innovation is able to happen in a large corporation, similarly to how it happens with a start-up; there are obviously differences, but both innovations follow the lifecycle concept for innovation. 

 

The Superiority of Design Driven Innovation

As I am a design - driven engineer, it is my viewpoint that this method of innovation and creation is generally the best and most effective. There are a lot of reasons why design driven innovation can be seen as better than other types of innovation. The below diagram outlines the spectrum of innovations and what factors drive the different types of innovations along the innovation process.

       Tech push and demand pull fall short as innovation methods as they do not fully encompass the factors that lead to a lasting and adapted innovation. The diagram above illustrates the places where each type of innovation specializes.

        Market Pull innovation is largely demand based; a market pull innovation occurs in response to fulfilling a market made ‘need’ in a market that already exists. These innovations are often made to follow a trend in the market, what is demanded by consumers at the time.  This type of innovation often falls short because as the trends change, so does the market demand and innovation must be constantly occurring to adapt and follow the market pull.

          Tech Push innovation is a type of innovation that can be largely radical and can lead to an influx of products that are not always necessary. It seems that sometimes Tech Push innovations occur to fill needs that do not previously exist, which can be viewed as frivolous invention. Some of these innovations might be adapted and successful, but if they are not, it creates more ‘stuff’ that just clutters the market. Tech push innovations do not create a new market but they intrude upon an existing one. An innovation that creates a new market is the general hope of most innovation and thus, it is my belief that superior to Tech Push and Market Pull is Design Driven innovation.

            There are many reasons why Design Driven innovation outweighs both Tech Push and Market Pull innovation. Design Driven innovation creates something that encompasses new meaning. In one of my recent readings I read by Roverto Verganti I read the quote, “People do not buy products, but meanings.” This quote encompasses Design Driven innovations and why they are for the most part the most successful, as they encompass new meaning which is what people are looking to buy. A product is useless if a person cannot determine how the product can add meaning to their lives in some way.

             In my own recent innovation process my team and I made a discovery that led to the outlining of a Design Driven innovation project. The first step in any successful innovation process is doing market research, and in our case it was observing people studying and conducting interviews about what people might need to make their time studying better. We hypothesized that for people studying along in public areas, it might be difficult for them to get up for short amounts of time to get a snack or use the restroom without having to take all of their belongings with them.  The Design Driven innovation process consists of conducting research into what consumers might actually need, and thus often has positive market performance as it the innovation has been approved by a sample before it goes to market. In our research we found that often people felt tied to their public study space. It was difficult and involved risk for them to get up for a short period of time and leave their belongings for fear that they would be stolen. The feedback we got was that people wanted to be able to safety leave their stuff for a short period of time without the risk of their belongings being stolen before they returned.

         Phase two of Design Driven innovation once a need have been determined in an existing market is the testing of a concept. This is crucial in Design Driven innovation as it helps to determine the existing need further and if it has been addressed properly by the innovation. For our design project we created a detailed sketch prototype of a GPS lock that could be attached to belongings that would sound an alarm if the items were moved further than a specified trigger radius before the owner returned; GPS tracking was also a feature in the innovation to ensure the item could be tracked if the alarm wasn’t enough of a deterrent. The feedback we gathered was primarily positive as the product was easy to identify as a lock and not particularly hard to figure out how it worked. Many people we asked said that they would use something like our lock and seemed very interested in the idea. By producing a prototype that people can comprehend and examine, it better determines the success of a potential innovation, as you are able to get market related feedback about it.

          Design Driven innovation is superior to Market Pull and Tech Push as it creates something that carries new meaning. A Design Driven innovation is both proven by extensive market research and also testing, which makes the innovation more credible when brought to market as its success has already been primarily tested and approved by consumers. Because a Design innovation focuses on satisfying a consumer need it makes the product stronger as it creates a new market of consumers, and this is ultimately the goal of innovation as it makes the innovation most strong.

                          

Innovation: Getting Your Think On

What do you think of when you think of the word innovation? What constitutes an innovation? Can anyone be innovative? Aren't innovations and inventions practically the same thing? Are new innovations inventive?

These are all questions that have been posed in the last two weeks when exploring the creative realm of invention and innovation. 

As humans, we all have different ways of perceiving things. Our brains help us perceive things by making categories and sorting our experiences, thoughts and ideas accordingly. These categories are formed by things we have done ourselves, things others have told us, things we have learned by doing ect. These categories can hinder us, serving as a blocker to creative thinking, as we are sometimes unable to see past our own categories and remove our ideas from the confines of our constructed 'boxes.' Our brain is 'conservative' in the sense that it won't make new categories to sort things, unless it absolutely has to. This is where creativity and innovation come in. How we think can enable innovation allowing us to think 'outside of our boxes' comparing new thoughts and ideas to pre-existing constructed categories. It is when we allow ourselves to form new categories by broadening our knowledge with travel, exploration, questioning and education that we open the door to innovation. 


The fact that we all have different ways of thinking and perceiving is extremely important when talking about invention and innovation. The concepts of invention and innovation are fairly subjective ideas; beyond the first inception of an idea and initial construction of the concept, it can become convoluted as to what is a true invention and what is an innovation (or improvement) on an existing invention. 


For example, take the Q-tip. When first invented, the intended use for the Q-tip was to clean earwax out of your ears, but since it's introduction many people have innovated.

There are now Q-tips that contain acne medicine where you can pop one side off the cotton swab and medicine flows to the other side. 

There are Q-tips that have plastic sticks making for a more streamlined and pleasing feel when using the tool. 

There are also pointed Q-tips that have foam applicators made to help with make-up application for women. 

Which of these are innovations and which if any are inventions?

An invention is the first occurrence of an idea. Therefore, the first initial form of the Q-tip would be the invention. Out of the provided examples of Q-tips, the plastic one and the pointed one would be innovations upon the originally invented Q-tip as they are not entirely new, but are improvements upon the original with slightly different form.

At first thought, the Q-tip with the medicine inside of it may seem like an invention; it is a new idea that has never been seen before. However, it is merely an innovation as it is a Q-tip that has been improved upon to make the application of acne medicine easier. A Q-tip encapsulating medicine within it is an  entirely new idea and it is the first time that this idea had been brought to market.

The above example illustrates the differences between invention and innovation: an invention being the first occurrence of an idea and an innovation being improvements on something existing, that isn't entirely new in concept. 

There are lots of different ways that innovation can occur. Innovation can occur incrementally being introduced slowly, in small ways to something. This is often the least noticed type of innovation as companies often try to assimilate these innovations as small changes. Radical innovation is where a change occurs and causes something existing to no longer have a use or become obsolete and creates an entirely new market and need based on it's introduction. Disruptive innovation is the introduction of something new, similar to radical innovation, but it doesn't create an entirely new market. Disruptive innovation just shifts a market in a specific direction and replaces something already existing within the market. 

Dominant design innovation is a bit similar to disruptive innovation. Dominant design is when an innovation makes other models of a similar design in a particular model obsolete and replaces them, but doesn't necessarily disrupt the entire market. 

Platform design is another kind of innovation where the platform is what is changed. The platform is what something is built upon or depends upon as a design. 

Open innovation is the last type of innovation which depends upon ideas flowing in and out of an organization. 

All of these types of innovations can lead to many different inventions and improvements on existing products. These are what can change the face of an industry, spur a new multi million dollar product, and are the dreams of entrepreneurs. 

While watching the show Shark Tank on NBC (9/21/12) Mark Cuban said, "First there's the innovators, then there's the imitators then theres the idiots." While I don't necessarily agree with the quote, the humor behind it is that with any invention, anyone can innovate off of it, to the point where all the innovations following the initial invention can become absurd to the point of idiocy.