Open Innovation

Our discussion the other day about the potential challenges and opportunities of open source innovation and collaboration made me think of a couple of Mckinsey Quarterly articles that came out last month: "Managing the Business Risks of Open Innovation" and "Wiring the Open Source Enterprise".

The key takeaway from these articles is the overwhelming trend towards open source innovation online and the fact that more traditional IP-oriented companies will either have to work harder to differentiate their 'core IP' or adapt to the model of more collaborative IP-free innovation. As we mentioned last session, the success of such efforts will depend on how users are motivated/incentivized and how strong the foundations are. The authors recommend a grassroots approach.

What I find most interesting is the analysis done on which industries will most likely adapt to and benefit from this new trend. The chart below provides some insight into a broad swath of different sectors possibly effected beyond just the obvious IT software development hub. I was actually surprised by what seem to me to be high-risk categories such as 'medical, precision and optical instruments' and 'coke, petroleum and nuclear fuel'.  These beg the questions: how would one balance open innovation, quality control, and security in such categories? Bob Lewis, CEO of Communications Consulting in South Africa commented:

"...If something is “open,” who takes ultimate responsibility for its shortfalls, especially in a climate where even operational computers at power stations have been hacked?"

 Perhaps this calls for an even more innovative process or model of responsibility-sharing to allow open source innovation to flourish in a safe and collaborative environment.

The chart below shows analysis based on the following three questions posed to industry leaders:

1. Do specialized firms offer proprietary solutions within certain layers of my industry’s value chain?
2. Do integrated firms seek to cut development costs in my industry by drawing on open technologies to substitute for these proprietary solutions?
3. Are the underlying technologies complex—consisting of so many bits and pieces that a significant number could inadvertently infringe on proprietary IP held by specialized firms?

Source: https://www.mckinseyquarterly.com/Managing_the_business_risks_of_open_innovation_2911

An Idea Without All the Answers

Last week, we talked a lot about innovation-where it comes from, is it feasible, what are the next steps, etc. Ideas (whether great or not) are generated constantly, but the execution of these ideas are equally important. In recent years, I've thought a lot about entrepreneurship and innovation. Many ideas come to mind, but none have been executed. I'm hesitant to pursue these ventures because I do not have a concrete or complete business plan put together. It's always a work in progress.

As an entrepreneur, do you need to have a concrete business plan before you pursue a venture? Or is it possible to sell (i.e. convince) strictly based on an idea and work on the business plan as you go along? At a recent networking event, a friend of mine (who has a start-up) says that you are always selling. I guess this implies that I should get out there with my idea and do it, even if I don't have all the answers.

Your thoughts? Your responses will definitely shed some light and motivation into my potential ventures.

-Tony Tran

Understanding your audience

While reading the Entrepreneurship section (Flipboard magazine), which by the way I highly recommend, I came across a couple of really interesting articles related to building your network & understanding your community.

Are you forgeting someone? - http://www.inc.com/matthew-shampine/community-building-for-your-company.html
Forget Networking. How to Be a Connector - http://www.entrepreneur.com/article/222707

While most people will constantly tell you that you cannot design a product without fully understanding your audience, it is something that does not come naturally to most of us, unless, we are ready to spend a few days living the lives of the people we hope to impact - like the 2 MIT graduates that spent a month living on the minimum wage set by the Indian government. But the biggest reason many good ideas never take off is because they do not entirely understand the community they are working to make better. The XO laptop is a great example. Yes, technology is wonderful, but these people lack the basic needs of food, water, shelter, etc, and unless children with laptops can somehow solve these problems, there is not much benefit to the community as a whole.

So how can one fix this issue? The two articles provide excellent solutions: 1) immerse yourself in the community that you think has some say in your product - make everyone feel that the product is something they can all benefit from and be open to a lot of constructive critisism. Several non-profit organizations have blogs/FB profile pages, where you can provide your suggestions to a problem they are trying to solve. Show people that you are genuinely interested in making a difference, and in turn, when you need some advice, it will be readily availble. And, 2) build your connections anywhere you go, because even if you have little idea about the cultures, social norms, trends, etc in a particular region, someone else might. And you never know what interaction, no matter how feeting, might spark a connection that would open up your mind of a completely new world of possibilities.

Most people speculate that even if you are not particularly keen on social media, it is here to stay. And I agree. Twitter, FaceBook, LinkedIn, etc. provide an excellent platform to build a community of like-minded individuals who can support your vision and also help promote it. Additionally, companies like Klout are using and evaluating your everday connections as a tool to create your SM worth in the market, much like your actual financial worth, and rewarding individuals with higher clout.

So, what do you think about the SM bandwagon? Are you already immersed within the communities you wish to impact? And do you any other ideas on making these valuable connections that we could all benefit from?

~ Ketaki Desai

Here's another social innovation bringing light to the poor

http://isanglitrongliwanag.org/

Please check this out and post your comments,
Thanks
Sangeeta

Innovative local group started by a former CMU grad - in response to Ketaki's project

http://thenewsexed.org/index.html

Hi all,
I've been following how this project has evolved in the past year or two. When Ketaki discussed her idea for peer-to-peer promise re: active intervention in case of sexual crimes, I was reminded of this. Founder Samantha Bushman is a former CMU Grad.
Sangeeta

One Laptop Per Child: Vision vs. Reality Article

From our discussions in class today about OLPC, I thought many of you would find this article interesting.

http://pcic.merage.uci.edu/papers/2009/OneLaptop.pdf

The article is about two years old, but it makes a lot of good points about why the XO laptop has not made an impact in resource poor countries. Some interesting breakdowns in context of use:

1. Many of the teachers were apprehensive to adopt the new technology and with the teachers uneasy with the laptops, it confused the children as to how the laptops fit into their education. Vice versa, for teachers that were computer literate, they were accustomed to using Windows software and the XO laptops uses Linux/Sugar operating systems, which the teachers don't understand and hence apprehensive to use. Reminds me of the example Prof Zak talked about today with the Chevy Volt.

2. The article also pointed how although the OLPC's laptop was beautifully engineered to be used in a developing country, the organization by passed other requirements for ensuring that the laptops fit in to the educational contexts of many developing countries. Like many failed ICT4D projects, Negroponte and his team seemed to fall into the trap of thinking, by providing technologies in underserved communities, they have solved the problem of youth having access to information. Until social/cultural elements of sustainability are integrated into their model, that won't happen.

"While the Uruguayan government is making a great effort in providing funding for the hardware, there is no funding for designing and developing software and content for use with the laptops or for conducting a thorough evaluation of the educational and societal outcomes of the project"

3. Governments also need to play a more active role in understanding how these laptops will be beneficial to their communities. Simply buying 10,000 laptops for the country without investing in teacher training or technological support, doesn't help anyone.

So yea, check out the article makes a lot of really interesting points.

Greetings to my fellow students and faculty blogging/viewing this site.

Prof Zak screened the video about water access and 5 local solutions last week. It profiled this organization that installed the meters that measure use and track users in Western India.
I found this very inspiring talk online and wanted to share the perspective of Mr. Anand Shah, CEO of Sarvajal, touching upon core values of social enterprise, generating ideas for action as well as his suggestions on starting up. It is in three parts. He is speaking to some audience in India and occasionally speaks in Hindi. I rupee = approx 2c and 1 crore=10 million

Part 1 http://www.youtube.com/watch?v=1AR8xZu2w5c&feature=endscreen&NR=1


Part 2 http://www.youtube.com/watch?v=422eTBlIyAc&feature=related

Part 3 http://www.youtube.com/watch?v=HukHQDMm7Eg&feature=related

Here is what I learned about entrepreneurship - it is not a 'job' - persistence pays and Edison's 99% perspiration applies to each step .

Capacity Building

Capacity building is more and more becoming critical for Non profits to perform effectively. So based on this article the major problem with capacity building within non profits is that there is no shared definition of th term capacity building.

Non profits are good,many of them filled with motivated individuals who are driven and direct all their attention and resource spent on fighting for social causes with keep administrative cost low. I believe this article points out the fact that non profits can move from good to great if some focus is given to capacity building.

The article outlines 3 lesson on capacity building that every organization especially non profits should focus on to help their capacity building.

1. The act of resetting aspiration and strategy: As stated by the article this is the first step to dramatically improve an organizations capacity. In my own understanding, i believe that resetting aspiration and strategy bring about renewed passion,more efficiency and effectiveness if properly aligned with the other aspects of the organization

2.Importance of good management: This cannot be stressed enough, having the right management team that is dedicated to ensure capacity building is happening and continuously improved.

3.You must patience: This applies to every thing in life. Most situations are not easy and the effect of an organization rarely shows over night, things are very complicated and usually take longer than people expect.

Not Scaling

One of the things I've always known about myself when it comes to my position as a founder is that the second I have to sit down and fill out an expense report for the HR department, I'll know it's time to go.

The "Why Entrepreneurs Don't Scale" articled really hit home in this regard. I agree with everything that the author included as reasons that founders have a hard time adjusting to a company, with the exception of one omission: that it's perfectly alright if a founder doesn't make the transition. Becoming a multi-decade CEO isn't the only definition of success for an entrepreneur.

I also don't think it has anything to do with personality or innate habits--when it comes down to it, the skill sets for a CEO of a startup vs. a CEO for an established company are very different. For a startup, the skills are more similar to a Project or Program Manager, and the elements mentioned in the article serve them well. A CEO of a big company is entirely different, and in other circumstances it would take many years for a Project or Program Manager to be promoted to CEO. Founders of companies are expected to make that transition in a much shorter time, so it's really no surprise that they don't make the transition that often.

And anyway, who wants to be in charge of things like setting company policies for expense reimbursement? It's much more fun to build things from nothing and be creative :)

Entrepreneur vs. Executive

As indicated in this week’s readings, “the habits and skills that make entrepreneurs successful can undermine their ability to lead larger organizations” (Hamm 2002). According to the readings, these habits include:

• Loyalty to Comrades
• Task Orientation
• Single-Mindedness
• Working in Isolation

Given that I see some of these traits within myself, I appreciated the author’s use of case studies to indicate situations wherein these characteristics attributed to the downfall of companies and situations wherein the rejection of said traits led to a company’s success.

Intrigued by the topic of how I can perform well as both an entrepreneur and an executive, I decided to conduct some research on the subject. My findings include the following:

• Article about how to transition from an Entrepreneur to an Executive on your resume: http://www.jobdig.com/articles/1354/How_to_Make_the_Leap_from_Entrepreneur_to_Executive_on_Your_Resume.html
• Article outlining the differences between and Entrepreneur and a CEO and how to wear both hats: http://www.business-strategy-innovation.com/2009/11/ceo-entrepreneur-or-both.html
• Article on the dilemma of being a founding CEO: http://hbswk.hbs.edu/item/4948.html

Does anyone know of any additional websites or books that can be of use? I am interested in learning of additional resources that can make the process of transitioning from an entrepreneur to an executive successful. Please share if you know of any.

Sources

Hamm, John. "Why Entrepreneurs Don't Scale." Harvard Business Review, 2002: 2-7.

Why Entrepreneurs don't scale

As discussed in the article inventors usually find it difficult to switch to executive mode, as a result of their inabilities to adapt to new challenges and changes. However this is not a something fixed as many executives can learn to scale if they are willing to let go of their old ways and adapt to these new challenges.

John Hamm has identified four tendencies can lead to success or failure for the executives.

1. Loyalty to comrades: While allegiance is great to your colleagues, sometimes executives get carried away that they are not able to see the weakness of a team or an individual. The story presented in the article is a clear example of reasons why we bring people on to our projects who are actually qualified and up to the task.

2. Task orientation: Focus on goals not tasks. tasks get overwhelming and if the tasks do not bring out the goals that are required, then those tasks are probably not necessary.

3. Single Mindedness: Executives have to have an open mind and listen to their employees in order to ensure they are good Entrepreneurs. Understanding every aspect of your organization.

4.Working in Isolation: The need to form a strong external network is necessary for the growth and success of any organization

I found an interesting article on Entrepreneurs VS Inventors:

http://i-trepreneur.com/2008/09/02/entrepreneur-vs-inventor/

What Should You Do With Your Crappy Little Services Business?

http://techcrunch.com/2011/04/24/what-should-you-do-with-your-crappy-little-services-business/