innovation.net

One Savvy Entrepreneur - Nagesh Challa in Fast Company

I often speak about how success in open innovation requires more than scouting for technologies.  Large companies who are leaders and winners in this game recognize the need to build relationship-based networks of external innovators.  It's easier said than done, because of the many barriers (legal, cultural, firewalls, etc.) that keep executives and entrepreneurs from truly collaborating on an ongoing basis.

(photo: Suzy Polling via Fast Company)

So it was refreshing for me to read about Nagesh Challa in the June issue of Fast Company. In an article entitled The Mad Scientist of Mobile Phones, author Elizabeth Svoboda paints a picture of a truly visionary mobile software entrepreneur, often well ahead of the curve of emerging technologies.  In the 1990's he invented the Media Stick, a 2MB storage device for PC's and mobile phones.  "People didn't know what to do with that much storage" Challa explains.

According to Svoboda's article, in 2004, the demand for more mobile applications and 3G networks ability to carry high-volume data, allowed his 'push to talk' technology to be adopted into all of NEC's and Panasonic's phones.  That may have been the turning point for his company (Ecrio), but it's his savvy personal approach to building relationships with leading mobile technology companies that really caught my attention.

Start-ups all over the world are pushing their technologies on these large companies.  Here's an excerpt from the article that demonstrates Challa's difference in approach:

What secures Ecrio's place at the mobile vanguard is Challa's unusual willingness to cater to his clients and to truly understand not just their needs but their culture -- including singing karaoke. "I've dealt with take-it-all-style negotiations with other U.S. companies," says Tetsuya Mori, who heads the technology venture-capital practice at Mitsubishi UFJ Financial Group. "Japanese companies feel refreshed when they deal with Nagesh. His style resonates here -- he knows how to make things win-win. I've heard people say, 'I can't say no to Nagesh. I want to find a way to come to terms with him.'" Several years ago, Challa also taught himself Japanese from scratch, listening to language CDs and practicing vocabulary in stolen moments between meetings.

He has developed personal relationships with the CEO's of these companies -- he understands their strategies and needs and he targets his innovations and approaches to their future needs. Elsewhere in the article Hide Tanigami, CEO of semiconductor distributor Marubun/Arrow says... "We always joke, Hey Nagesh, you don't need to invent things five steps ahead of everyone else, only about one and a half.  You can still make money that way".

Nagesh demonstrates a trait other start-ups and entrepreneurs should emulate... Connecting directly and deeply with the large companies who are your likely partners and directing your innovation efforts at their emerging needs.

NTT DoCoMo and other Japanese telecom giants demonstrate a trait other large companies should emulate.... Nurturing and guiding the best entrepenuers in your business.  And building relationships that can actually become a real source of competitive advantage!

TekScout - A new approach to online technology matchmaking

The field of open innovation continues to gain momentum, with an increasing number of leading companies (consumer, B2B and service) looking outside for ideas.  The current business climate of 'doing more with less' is driving the trend as well.  In response, more and more service providers are re-configuring and expanding their offerings to position themselves as emerging leaders in the field of innovation in general and open innovation in particular. The newest entrant is TekScout, an online marketplace created by UTEK -- a technology transfer company with its roots in connecting university based research tech transfer. 

TekScout enters a crowded field:

Innocentive just closed on a $6.5 million round of financing to expand their online marketplace.  Their business model, as the name hints, is a rewards-based approach to open innovation.  Problem solvers post technical challenges to Innocentive's network of 140,000 technical solvers.  Winning solutions are rewarded via cash awards, usually small, but with the potential of up to $1,000,000. 

Yet2 is a global marketplace that lists both "technology needs" and "technologies available".  Yet2's software engine drives many of the corporate open innovation marketplaces (DuPont, P&G, etc.).

NineSigma has expanded into both Europe and Japan, and also gained new investment of $4 million to capitalize its growth. NineSigma has probably been the most successful of the bunch by leveraging a singularly focused approach of posting well-defined tech briefs (needs) to it global network of solvers. 

Now comes TekScout, aimed at connecting companies (TekScouts) and scientists (TekExperts) together.  In their press release announcing the site, the company cites its relationships with over 2000 academic institutions around the world, in addition to the TekExperts who join the site directly.

So does the world need yet another online marketplace for matching technology seekers with technology providers?  In the case of TekScout, I say yes -- Here's why.

What seems to be unique about TekScout's approach is the following:

• Their unique strength and relationships in university-based research and problem-solving (they have the entire UTEK network available to provide deeper solutions beyond those who happen to look on the site)
• A subscription model that provides flexibility and potentially 'value' over project fee based approaches
• The responses to challenges/problems are more 'vetted' since the UTEK network is comprised of professional scientists (this is a big advantage, since I hear a LOT of frustration from companies who solicit ideas and receive too many unqualified responses)
• Finally, choice.  They offer both 'supported' searches with TekScout staff providing advice and screening, and also 'self-service' options for those who either don't need the help, or are budget-sensitive

In speaking with Ed Weisberg, VP and GM of TekScout, I went from being skeptical about yet another online marketplace, to becoming a believer that this is a unique approach that will find a place in the market.

So, if you're a company just beginning the open innovation journey, or an established player in the market, you've got a new tool to accelerate your efforts.  Similarly, here's a new outlet for your expertise if your a credible, creative brain in search of problems to solve.

Collaboration - Key to innovating in tough times

Innovation has been and continues to be in vogue (and rightly so)... it will be interesting to see how many companies stay the course during the current and future tough economic times.  So, as the innovation revolution enters another 'do more with less' phase, not too surprising that another word is showing up with increasing frequency: collaboration.

I've long felt that 'open innovation' is a recession-resistant trend, largely because it really does allow companies to 'do more with less'.  While it's not the same as outsourcing, there's definitely a benefit in leveraging external resources in being able to improve your companies R&D efficiency (more innovation at the same expense level, or equal innovation for less investment). 

Here are a couple of recent examples of the collaboration dialogue accelerating...

• Jeneanne Rae's BusinessWeek online column A Ripe Time for Open Innovation where she makes the case for open innovation in recessionary times (I'm quoted in this one).  Jeneanne makes a good case for why companies that haven't previously embraced open innovation ought to get on board now, for the sake of getting more done through co-development.
• The World Economic Forum in Davos Switzerland's 2008 Conference (Jan 08) which had the theme entitled The Power of Collaborative Innovation. It provided some interesting topics including 'competing while collaborating' and 'aligning interests across divides'. 
• A new book by C.K. Prahalad and M.S. Krishnan entitled The New Age of Innovation (subtitled Driving Co-created Value through Global Networks).  C.K. Prahalad has written seminal books on innovation such as Competing for the Future.  In his new book, he writes "The new game is about more efficiency and more innovation".  Global collaboration networks are a key part of this new approach.

Are you ready?:

Is your organization easy to access and work with from the persective of external partners? 

Are you considered a 'partner of choice'?

Does your culture and do your organization practices support collaboration? 

Do you at least consider colllaboration as a path to implementation in your strategic initiatives?

Collaboration has always been important.  It's going to become even more important in the challenging period of global competitiveness and change in front of us all.

Collective Innovation by Design (Firms)

Great article in last week's Business Week online.  The article "Building Expertise Through Collective Innovation" focused on a recent design conference/event in Rotterdam called the Raymond conference.  The theme was open innovation and it brought together leading designers from firms and corporations.  Rather than the traditional talking head event, they structured teams and activities among the invitation-only attendees to invent new solutions and new ways of working.

I'm continually impressed by how broadly and completely the open innovation movement is being adopted across industries, functions and regions.  Leave it to the designers to come up with a creative twist on open innovation and its applications.

When it comes to ideas, be open or lose out (part 2 of 2)

In my last post, I discussed a well-written, no-nonsense article by Max McKeown in which he discusses fear and other reasons why some organizations still hesitate to go beyond their walls for new ideas and approaches.

Fear of venturing outside your walls, resistance to new (and seemingly radical) ways of developing and commercializing ideas – these are all reasons that good ideas are often, sadly, “shelved if they aren't a direct fit to existing product plans and roadmaps.”

What’s more, in what I see as a harsh but, again, fairly accurate assessment of the ongoing slow pace at which corporations venture out of the proverbial box,: “Corporate deadlines are demanding enough without volunteering to take risks on orphan ideas.” Why take on a rogue idea or approach when it’s easier to do what’s safe and stick with the same-old-way of operating?

Some companies do a great job of seeking out ideas and idea people, of integrating their unique ways of doing and thinking into an existing environment, all the while benefiting from the differences in culture and approach. At the very least, McKeown  writes, the ones who are the most fearful of new ideas need to “be open to those ideas when they come to your attention.”

Case in point:
In 1944, a small and “obscure” producer of photographic paper, Haloid, took on an idea that had previously been rejected by the likes of General Electric, IBM and RCA. Haloid renamed this new idea "xerography." Long story short, Haloid’s photocopier took on the name Xerox and two years later, the company's revenues were $60 million.

The rest, as they say, is history.

Be open to ideas. Be open to new ways of developing those ideas. Just be open.

When it comes to ideas, be open or lose out (part 1 of 2)

This is a straight-forward “plain English” article explaining why the best and brightest never, ever rely only on their own ideas. Call it open innovation, call it delegation, call it foresight, call it whatever you want – just be sure to not only understand it, but to implement it as well.

“If you are even remotely creative,” starts author Max McKeown, “you'll never use all your own ideas. And even if you are very creative you will never create all the ideas that you need.”

That’s a pretty simple but accurate explanation of all of the reasons why open innovation works and why it needs to be a key component of any organization’s overall plan.

“Ideas cannot stand alone…,” the article continues. “…any serious [or semi-serious] attempt to improve, innovate, or invent – from a back-of-the-napkin session in a restaurant to a multibillion dollar research and development lab – will produce too many good ideas to use and not enough good ideas to meet all your objectives.”

So it’s about more than just ideas, it’s about turning those ideas into something real. And it’s about more than just turning those ideas into something real. They need to be something real that works within your objectives, your corporate culture, your mission and vision.

His assessment of the more “old-school” research approach is direct but mostly right-on: “Traditional corporate researchers tend to invent and discover for themselves and hope vaguely, if they think of it at all, that their ideas will be developed and commercialised. Meanwhile, traditional corporate development likes to have ideas ready for prime time – and to favour incremental improvement of existing ideas over radical anything in particular.”

In my next post, I will talk more about this article and a case-in-point study of how Xerox machines came to be.

What does the "greening" of Walmart mean for the innovation pipeline? (Part 2 of 2)

There's no question that the trend toward green initiatives has already entrenched itself into many aspects of business and into the realm of open innovation and the innovation pipeline in particular.

Take GreenOrder, a consulting firm that specializes in teaching Fortune 500 clients how going green leads to more green, more prospects and membership into the new (and soon to be only) way of doing business and seeing business. In this CNN/Money article, one of the firm's principals is quoted saying that there will never again be a building built in New York City that is not a green building.

So back to the original question of what does the greening of retail, of consulting, of the Fortune 500 world -- of all business, really -- mean for open innovation and the innovation pipeline?

What we're seeing is companies that can't get by simply by "talking the talk" -- walking the walk is the norm, not the exception. So, perhaps more than ever, bigger corporations will be forced to cultivate the lands outside their buildings (green or not) and develop real relationships with those smaller companies, entrepreneurs and idea people who can effectively bring in the green piece of the pie in a way that works on a number of levels, culturally, economically, socially and otherwise.

The trend of innovating in very real, workable and highly profitable way that is closely intertwined with green initiatives is not new, nor is a flash in the pan. This is just the beginning -- first WalMart, then the world.

The Innovation Experts Panel

Wanted to let you all know about InnovationTools.com, a great website and resource that fits well with many of the themes I cover in this blog.

Chuck Frey, my colleague who runs this site, tells me that The Innovation Experts Panel he recently formed with Hitendra Patel of Monitor Group is taking off. (Learn more about the panel here.) 

This panel of experts and practitioners is tackling its first issue: innovation itself. Questions like: How do you define innovation and how can you make it understandable and saleable to your organization’s senior management team were asked and results were recently published here.

I recommend taking the time to read this report – the panel did a great job of taking the definition or theory of innovation and applying it to the every-day life of a business or a team.

To be notified of future reports (about every other week), click here.

And stay tuned for the panel's next question: How do you source and manage ideas to come up with the best innovation opportunities for your company?

Feel free to send any answers, input or feedback to me or to Chuck.

I've seen the future, and it's all about collaboration

I was alerted to this white paper sponsored by Cisco Systems and entitled "Collaboration: Transforming the way business works." by one of my clients at GSK (GlaxoSmithKline).

As the first line of the report summary states: "The future belongs to those who collaborate." [Emphasis mine.]

Indeed, to forge ahead and excel in today’s (or tomorrow’s, for that matter) business environment, no matter what the specific nature of that environment, “organisations will need to collaborate with thousands of specialised players, from customers and partners to competitors, regional distributors and university researchers.”

No matter what an organization’s past was all about, the future will require flexibility, agility and the drive to and ability to collaborate across all boundaries and functions.

Some of the report’s key findings, none of which are completely new to me or to those of you who follow this blog, but all are significant in terms of collaborative innovation and collaboration in general:

• Companies are facing a new imperative to form collaborative relationships.

• Successful collaboration requires a cultural shift which is already well under way.

• Companies face challenges in measuring and monitoring the benefits of collaboration.

• Despite the promise of technology, there is still dissatisfaction with online collaboration tools.

I will be addressing each of these points in future posts. (And to access the full white paper, click here.)

Live IP Auctions

I recently received notice about the next round of upcoming IP Auctions.

As I’ve written in previous posts, Ocean Tomo’s IP auctions are more evidence of the strength of the Open Innovation trend. That these auctions are gaining in popularity indicates a healthy market for technology transfer. (By the way, the Ocean Tomo 300 Patent Index outperformed the S&P 500 by more than 1,000 basis points in its first year!)

The two upcoming auctions are:

April 1-2, 2008 in San Francisco

and

June 25-26, 2008 in Amsterdam.

Areas of interest that Ocean Tomo has put in its "open call" are:

• Digital Music & Video
• e-Commerce & Web Services
• Insurance & Financial Services
• Integrated Circuits & Semiconductors
• Integration Technology
• Interactive TV & VOD
• Online & Mobile Advertising
• RFID & Barcode Technology
• Security/Digital Rights Management
• Social Networking & Web 2.0
• User Interface Technology
• Wireless/Network Communications

These auctions were born to bring a forum for the exchange of intellectual property to the marketplace. Ocean Tomo's website explains that it (an "Intellectual Capital Merchant Banc firm that specializes in understanding and leveraging Intellectual Property assets") aims to bring a "sense of urgency and closure to IP transactions, create a center for IP liquidity, and effectuate transparency for a market in which none has historically existed."

This is a bold mission, but I think they are actually accomplishing it.

(Look for Part 2 of my "greening" of Walmart post later this week.)