From Concept to Cash: Monetizing Your Creative Idea Leslie Martinich Competitive Focus 22 March © 2006 Leslie Martinich

Incremental or Breakthrough Incremental Innovations Breakthrough Innovations Disruptive Innovations Radical Innovations Discontinuous Innovation 22 March © 2006 Leslie Martinich

Innovation S-Curve Mature product Cash Concept Incremental Innovations 22 March © 2006 Leslie Martinich

Uncertainties Technological Market Organizational Regulatory Resource How are we going to do this? Market Who will buy this? Lack of standards Lack of supply chain Lack of available infrastructure Organizational Resistance to change Change in strategy Regulatory What is changing? Resource Where will we get the funding for this? Who will we partner with? 22 March © 2006 Leslie Martinich

Characteristics Takes a long time Has many uncertainties Non-linear Hype and fear 22 March © 2006 Leslie Martinich

Post-It® Notes Timeline 1980 1981 1978 1977 1974 1979 2006 1968 3M’s Dr Spencer Silver discovers repositionable adhesive 1974 3M’s Art Fry needs a lightly adhesive bookmark for his choir hymnal 1977 Fry overcomes manufacturing obstacles to produce enough Post-It® Notes for 3M’s headquarters Boise Blitz Successful test market in 11 states Post-It® Notes introduced nationwide in US Post-It® Notes introduced in Europe and Canada 2006 More than 600 Post-It® Notes products, adhesive is used on other 3M products as well 22 March © 2006 Leslie Martinich

From “Good Idea” to Gold 22 March © 2006 Leslie Martinich

Build an Innovation Hub From Radical Innovation, Leifer, et al. 22 March © 2006 Leslie Martinich

Where the Concepts Go Commercialization Idea Gathering Idea Evaluation Return to Repository Spin Off Hand off to Operations Discard Commercialization Idea Gathering Idea Evaluation Development Research 22 March © 2006 Leslie Martinich

Gathering Ideas Competencies Organizational mechanisms Creative people who see things differently People who make unusual connections Ability to operate with uncertainty Senior management support Organizational mechanisms Technical forums Experimentation time Immersion in customers’ business Use “Lead Users” 22 March © 2006 Leslie Martinich

Lead Users Use Lead Users to find breakthroughs From a variety of industries Seeing the problem with different sets of eyes Not the largest market, but one that will benefit most from the technology 22 March © 2006 Leslie Martinich

Gathering Ideas Consider trajectories and their convergence Handheld Devices Distance Learning Regulatory Change 22 March © 2006 Leslie Martinich

Gathering Ideas Consider trajectories and their convergence Digital Video E-Commerce 22 March © 2006 Leslie Martinich

Entertainment Drives Technology Martinich Maxim #1 Entertainment Drives Technology 22 March © 2006 Leslie Martinich

Recognizing Opportunities Competencies Deep technical knowledge Judgment Large informal network Analytic and synthetic skills 22 March © 2006 Leslie Martinich

Evaluating Opportunities What are your strengths? What special skills do you have? What are the market needs? Can you succeed in that market? What is your strategic intent or direction? 22 March © 2006 Leslie Martinich

Evaluating Opportunities Does this make sense for us? Does this make sense for some other organization? Does this idea need further refinement? Do we have the skill for this? Will anyone buy it? Who? 22 March © 2006 Leslie Martinich

Evaluating Opportunities 22 March © 2006 Leslie Martinich

Evaluating Opportunities Competencies Technological understanding Strategic vision Business understanding Ability to tolerate uncertainty 22 March © 2006 Leslie Martinich

Martinich Maxim #2 “Luck is what happens when preparation meets opportunity.” – Seneca (Roman philosopher, 1st century AD) “Opportunity is what happens when a solution meets a compelling market need.” – Martinich (21st century AD) 22 March © 2006 Leslie Martinich

Deliver the Product This works for incremental improvements, but not for breakthrough innovations! 22 March © 2006 Leslie Martinich

Delivering the Product Reduce uncertainties Technological Market Organizational Resource Regulatory Go Back 10 spaces and Pay $1,000,000 22 March © 2006 Leslie Martinich

Delivering the Product Capabilities Set expectations Identify and track uncertainties Actively seek resources Manage interface with organization 22 March © 2006 Leslie Martinich

Uncertainty Resolution Category Uncertainty Market Will anyone buy this? How can we develop the needed infrastructure? Can we set the de facto standard? Can we own this market? What activities are customers performing? Organizational Strategic direction may change Project requires change and organization resists Organization's future may include re-organization Uncertain upper management support Project may be seen as cannibalizing existing business Technology Can we resolve the sub-problems? Is there a competing technology? How can we achieve the technological breakthroughs? Resource Where will funding come from? Who can manufacture this? Project may exhaust funds before completion 22 March © 2006 Leslie Martinich

Uncertainty Resolution For each uncertainty List assumptions Prioritize tasks for testing the assumptions List resolution approaches Uncertainty resolution plan Tracks ongoing areas of uncertainty Provides a learning tool and history 22 March © 2006 Leslie Martinich

Resolving Market Uncertainty Envision the value chain Who will participate? Auto maker Auto Buyer 22 March © 2006 Leslie Martinich

Regulatory & Licensing Value Chain Fueling Stations Insurance Regulatory & Licensing Highways Repair Services Distributor Parts Manufacturer Suppliers Auto maker Auto Buyer 22 March © 2006 Leslie Martinich

Value Chain Consider the value chain for a specific innovative idea Who are the participants? What infrastructure is needed? What role does your firm want? Consider Music industry, online news, bioengineered products, your own special domain…. 22 March © 2006 Leslie Martinich

Resolving Organizational Uncertainty Underlying conflict Ambidextrous organization Possible cannibalization Resistance to change 22 March © 2006 Leslie Martinich

Resolving Organizational Uncertainty Communicate across the organization Include respected individuals Demonstrate with rough prototypes to understand benefits of technology 22 March © 2006 Leslie Martinich

Resolving Regulatory Uncertainty Time Consider the impact of various results In natural monopolies, regulatory risks are large 22 March © 2006 Leslie Martinich

Markets are made during times of regulatory change Martinich Maxim #3 Markets are made during times of regulatory change 22 March © 2006 Leslie Martinich

Regulatory Uncertainty What regulatory changes might affect your creative concepts? 22 March © 2006 Leslie Martinich

Hand off to Operational Unit When enough uncertainties have been resolved Market Technical Organizational Regulatory Resource 22 March © 2006 Leslie Martinich

Questions? Slides available on http://www.competitivefocus.com Email: leslie@competitivefocus.com 22 March © 2006 Leslie Martinich