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Handling innovation is never easy. Companies try to contain the sources of innovation by not allowing the "outsiders" to enter company affairs. We are here to present our academic view on Open Innovation and how it will help in taking your company to the next level. Inno Garage is one of the foremost consultancies on offering open innovation, crowdfunding and crowdsourcing ideas. To know more about our services, have a loot at http://www.innogarageconsulting.com/2014/02/crowd-sourcing-solutions.html http://www.innogarageconsulting.com/2013/10/battle-test-your-innovation-strategy.html
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Innovation and Open Innovation
An Academic Take by Phani Malloju
Inno Garage Consulting
About Inno Garage Inno Garage is a consulting company with over a
decade’s expertise in the areas of branding, innovation and corporate strategy and has served with over 2000 clients
We have supported various companies across the globe on their innovation practices and helped in executing open innovation startegy.
Invention and Innovation
Idea
Invention and Innovation
Technology
Idea
Product
Invention and Innovation
Technology
Idea
BusinessProduct
Invention and Innovation
Technology
Idea
Sustainable BusinessBusinessProduct
Invention and Innovation
Technology
Idea
Sustainable BusinessBusinessProduct
Invention and Innovation
Technology
Idea
Diffusion of Innovations Developed by Everett Rogers
Diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system.
2º 3º 4º 5ºRANKING MUNDIAL DE USUÁRIOS DE INTERNET
1º 6º Knowledge Person becomes aware of an innovation and has some idea of how it functions
Persuasion Person forms a favorable or unfavorable attitude toward the innovation
Decision Person engages in activities that lead to a choice to adopt or reject the innovation
Implementation Person puts an innovation into use
Confirmation Person evaluates the results of an innovation-decision already made
Adoption of Innovation Step Process
Adoption of Innovation over time
Adoption of Innovation over time
Adoption of Innovation over time
2º 3º 4º 5º1º 6º Relative advantage
Compatibility
Complexity of transition
Possibility of testing
Visibility of benefits
Adoption probability grows if innovation has clear advantages for product, service or current behaviorThe more innovation is consistent with pre-existing higher the adoption probability
Complex changes involved in innovation, reduce adoption likelihood
A chance to try an innovation before making a final decision increase adoption likelihood
The more obvious innovation benefits the greater adoption likelihood
5 Critical Factors in Innovation Diffusion
InnovationFollowing Joseph Schumpeter’s 1934 book
“The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle”
innovation is distinguished from invention by the fact that innovation is usually applied successfully in practice.
Innovation - DiffusionWhen innovation occurs, innovations may be
spread from the innovator to other individuals and groups.
This process has been proposed that the life cycle of innovations can be described using the 's-curve' or diffusion curve. The s-curve maps growth of revenue or productivity against time.
Innovation - Diffusion In the early stage of a particular innovation, growth is
relatively slow as the new product establishes itself.
At some point customers begin to demand and the product growth increases more rapidly.
New incremental innovations or changes to the product allow growth to continue.
Towards the end of its life cycle growth slows and may even begin to decline. In the later stages, no amount of new investment in that product will yield a normal rate of return.
The s-curve derives from an assumption that new products are likely to have "product Life". i.e. a start-up phase, a rapid increase in revenue and eventual decline.
But in fact the great majority of innovations never get off the bottom of the curve, and never produce normal returns.
Innovation - Diffusion
Innovative companies will typically be working on new innovations that will eventually replace older ones. Successive s-curves will come along to replace older ones and continue to drive growth upwards. In the figure above the first curve shows a current technology. The second shows an emerging technology that current yields lower growth but will eventually overtake current technology and lead to even greater levels of growth. The length of life will depend on many factors.
Innovation - Diffusion
Open InnovationOpen innovation is a paradigm that assumes that
firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology”.
The boundaries between a firm and its environment have become more permeable; innovations can easily transfer inward and outward.
Open InnovationThe central idea behind open innovation is that in a
world of widely distributed knowledge, companies cannot afford to rely entirely on their own research, but should instead buy or license processes or inventions (e.g. patents) from other companies. In addition, internal inventions not being used in a firm's business should be taken outside the company (e.g., through licensing, joint ventures, spin-offs)
Idea Generation Selection Execution Commercialization
Open Innovation
Idea Generation Selection Execution Commercialization
Open Innovation
Idea Generation Selection Execution Commercialization
Open Innovation
Idea Generation Selection Execution Commercialization
DevelopNew ideas
Open Innovation
Idea Generation Selection Execution Commercialization
Ideas and innovations
from inside the organisation
patents and innovations
from outside the organisation
DevelopNew ideas
Open Innovation
Idea Generation Selection Execution Commercialization
Ideas and innovations
from inside the organisation
patents and innovations
from outside the organisation
DevelopNew ideas
Open Innovation
Idea Generation Selection Execution Commercialization
Ideas and innovations
from inside the organisation
patents and innovations
from outside the organisation
SelectSuccessful
Ideas
DevelopNew ideas
Open Innovation
Idea Generation Selection Execution Commercialization
Ideas and innovations
from inside the organisation
patents and innovations
from outside the organisation
SelectSuccessful
Ideas
DevelopNew ideas
Tech
nolo
gy
Lice
nsin
gIN
Open Innovation
Idea Generation Selection Execution Commercialization
Ideas and innovations
from inside the organisation
patents and innovations
from outside the organisation
SelectSuccessful
Ideas
DevelopNew ideas
Tech
nolo
gy
Lice
nsin
gIN
Open Innovation
Idea Generation Selection Execution Commercialization
Ideas and innovations
from inside the organisation
patents and innovations
from outside the organisation
SelectSuccessful
Ideas
Prototypes and
Production
DevelopNew ideas
Tech
nolo
gy
Lice
nsin
gIN
Open Innovation
Idea Generation Selection Execution Commercialization
Ideas and innovations
from inside the organisation
patents and innovations
from outside the organisation
SelectSuccessful
Ideas
Prototypes and
ProductionIP
Li
cens
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IN
IPLi
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DevelopNew ideas
Tech
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Open Innovation
Idea Generation Selection Execution CommercializationIdeas and
innovations from inside the
organisation
patents and innovations
from outside the organisation
SelectSuccessful
Ideas
Prototypes and
ProductionIP
Li
cens
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IN
IPLi
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OU
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DevelopNew ideas
Tech
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Lice
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Open Innovation
Idea Generation Selection Execution CommercializationIdeas and
innovations from inside the
organisation
patents and innovations
from outside the organisation
SelectSuccessful
Ideas
Prototypes and
ProductionIP
Li
cens
ing
IN
IPLi
cens
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OU
T
Product brought
to market
DevelopNew ideas
Tech
nolo
gy
Lice
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Open Innovation
Idea Generation Selection Execution CommercializationIdeas and
innovations from inside the
organisation
patents and innovations
from outside the organisation
SelectSuccessful
Ideas
Prototypes and
ProductionIP
Li
cens
ing
IN
IPLi
cens
ing
OU
T
Product brought
to market
Tech
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DevelopNew ideas
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Open Innovation
Crowdfunding
The Status Quo Venture capital difficult to find for smaller
requirements Debt finance hard to come by Business angels – limited investments
Typically a syndicate each investing £10k - £100k
What if there was a way to have say 5000 angels each investing £10?
What if anyone could become a business angel?
• Crowdfunding is an approach to raising the capital required for a new project or enterprise by appealing to large numbers of people for small donations
• Crowdfunding examples• Kiva.org - $325m funding raised, >777,000
lenders, ~800,000 entrepreneurs• Kickstarter.com – >24,000 projects funded, >
$250m pledged to-date, 2m people have pledged
Crowdfunding
Three Types of Crowdfunding
1. Donations, Philanthropy and Sponsorship where there is no expected financial return
Kickstarter, IndieGoGo, RocketHub, Faithfunder, CharitySub, ChipIn, Catchafire
2. Lending/Borrowing KIVA, RateSetter, Funding Circle
3. Investment in exchange for equity, profit or revenue sharing
Profounder, AppBackr, PeerBackers, Quirky, GrowVC
Fast Growing Retail BusinessFunding Circle is a UK
clearinghouse for semi-anonymous lenders and borrowers (bank)
Primarily for expanding existing small businesses
Variable loan rates/term Average return 8.3%Funding Circle does the
credit check, rates risk Lender amounts small $40 million in
transactions
Common Crowdfunding Mistakes1. Asking for Too Much… or Too Little2. A Bad Promo Video: too long, not clear on the
benefits, no humour, no excitement3. No Clear Itemized Budget4. Poor or Overpriced Perks5. Failing to Promote Your Project to Your Social
Media Network6. Failing to Inspire - No Good Story or Hook7. Giving Up Too Early
Lets Take the Discussion FurtherOur team is always ready to deal with the
innovation issues in your company. Please feel free to call us up or drop a mail:
No 32, Janapriya Enclave, LB Nagar, Hyderabad
[email protected]@innogaragebranding.com
Inno Garage
91 40 64561365 91 880 1889344
www.innogarageconsulting.com
