View From The Bridge

Hate to Lose? Love to Win?

"I hate to lose more than I love to win." -- Jimmy Connors*

I've been having a raging internal debate (with myself) lately about what's more important for an inventor -- the love/passion for winning with their invention or the "never say die" mentality of a comeback artist. I've asked some good friends who are true competitors which is more important to them, and the margin is definitely tilted towards the "hate to lose" end of the spectrum. And, for those that know me, I daresay I'd be considered one who hates to lose.

In the world of inventors and new product development, I think I've reduced it to this: if you're born with unbelievable talent and grace, you have the luxury of loving to win. Things kind of fall into place, you have a knack for being in the right place at the right time, and winning is expected. Don't misunderstand -- those that love to win work as hard as anyone, and make their luck. But there is a subtle distinction between expecting to win and refusing to lose. I'll get back to that in a second.

If you don't have the talent and grace of those chosen few, you must have a mentality of hating to lose in order to win. You have to overcome soooooo many obstacles, so many naysayers, so much negative and contradictory feedback, so many gatekeepers that keep you from decision-makers that it is only through sleepless nights, torn and crumpled piles of paper, 99 misses for every 100 swings, and screaming in the mirror that you will find the path. It requires undying passion and relentless head-against-the-wall sessions that only those that hate to lose more than anything can make it through.

Ultimately, we'll take both inventors at EIP for both sides of the coin are worthy -- but spare me the middle ground -- the ones that want the silver platter for their work is done at the moment of the AHA. But in a pinch, I'd rather have those that hate to lose on my side. Watch any movie, any sporting event; read any book on the history of warfare; ask any CEO. Those that hate to lose have a grimace, a grunt, an expression on their face (with sweat flying no doubt) that says it all: "I'm not done yet! This isn't over!" Those that love to win are pleasant to be around; they're gracious, wonderful people. And I've never met anyone who loved to win who didn't work as hard as the other guy (or even harder).

But, when push comes to shove, I've ultimately concluded that those who love to win are not as hungry as those who hate to lose. And hunger, my friends, is what inventing is all about. As Peter Drucker once said, "Whenever anything is being done, I have learned, it is being done by a monomaniac with a mission."

*Note: Jimmy Connors never won the French Open

The Efficient Frontier = Open Innovation?

There is a theory in finance called The Efficient Frontier.  In short, it states that for any given level of risk, there is an optimal portfolio strategy that will maximize the total return.

Expanded slightly, it posits that one should strategically allocate assets to avoid the "all eggs in a single basket" risk problem and furthermore that there is an intelligent deployment of assets across diversified asset classes to provide for an optimal return no matter how the world turns out (but given some level of acceptable risk). That is to say, we can't predict the future, so we make our best guesses across a basket of assets, hoping that some will go up, but knowing not all of them will.

I bring this up as a result of an interesting experience almost two weeks ago when my partner, Dave Bayless, and I had the opportunity to speak to a class of 1st year Kellogg  (my alma mater) students about Open Innovation. One enterprising first year student, with a big smirk on his face, figured only the "weakest" companies would look outside for innovation. For clearly, any well-run company that embraced risk and rewarded its managers for pushing the envelope, could run circles around anyone else in developing new products. In this student's example, 3M embodies all that is wonderful in the world of great culture, awesome employees, and extraordinary brand.

With no disrespect to 3M, which is indeed a great company, it is simply wrong to think that you should (and even can) do new product development solely with payroll staff. It's analogous to investing all your assets in one company.

I'm going to posit in this post that Open Innovation, and the role that EIP plays in the world of Open Innovation is quite similar to portfolio theory and the concept of the Efficient Frontier. A company's staff represents one asset class; EIP represents another asset class, M&A represents yet another asset class, and tech transfer with universities might represent yet another asset class (and so on, encompassing literally dozens or hundreds of asset classes and sourcing streams). The smart new product development strategy is to leverage ALL of those assets classes into the operational and brand infrastructure and pick the best new product concepts among them ALL.

What's fascinating to me about this space is that I think there's an important difference between Open Innovation and the Efficient Frontier: with Open Innovation, the cost of opening your mind/organization to supplemental new product flows is almost zero. With the Efficient Frontier, it's a zero-sum game -- you have to allocate assets and have a fixed amount of money. With Open Innovation, you can explore multiple new product streams, at generally low cost, and pick the most promising new products that align with your brand and corporate strategy. Think "very big funnel" and "cream-skimming" linked at the nexus of senior decision-makers. Yes, at some point you need to focus and manage your "streams" smartly; but that's down the road. For now, open the taps and let a thousand flowers bloom and see who consistently shines brightly and wisely...

Only a fool looks a gift horse in the mouth. So those that don't open their minds to supplemental idea flow from Open Innovation are going to get religion as soon as they realize that as smart as any organization can be, it simply can't compete with the combined resources and creativity of an open collective of minds and energy deployed against satisfying unmet consumer needs. And when you realize that the cost of this stream is (a) close to zero on the front end, and (b) a couple points off the topline for royalty payments, this makes a ton of sense...

So, you read it here first. Open Innovation is to new product development what the Efficient Frontier was to portfolio theory. Only time will tell what asset class EIP is :)

American Inventor ~ A Step Forward?

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way- in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.

So begins "A Tale of Two Cities", written by Dickens in 1859, but oh so applicable to American Inventor 2006. Every time I hate the show they do something I love. Every time I love the show, they demonstrate how absurdly shallow Hollywood is, how reality TV bears no resemblance to reality, and how the TV version of inventing is about as real as Ward and June Cleaver are in the 21st century. In comparison to other reality TV drivel, it's a winner. In comparison to what it could have been, it was a disappointment. The good news is that the best inventor won. The only guy on the show that really had a new-to-the-world idea, backed up with a breakthrough invention, won. Janusz's safety capsule was novel and smart. The bad news is that I don't know if we'll ever see his product on the market. The product liability lawyers will no doubt water it down and change its promised benefits, and I still can't figure out how they're going to get it to fit into a car for any child that's over 6 months. But I sure hope I'm wrong.

Personally, I loved the Word Ace ad, but thought the game was nothing special. Heck, go buy Scrabble and Boggle (or any of the other dozen word games). I thought The Catch device was slick if you had kids that needed to learn how to catch. But, that's a pretty darn small market, and you need to be pretty committed to "the right way to catch" to want that. I'm happy when I have time just to throw the ball with my kids! Who needs a device to complicate matters... And I thought the double traction bike was just goofy. I never got that one. So a tandem doesn't fit the bill, but I'm gonna ride around with this thing just in case someone wants to jump on my handlebars? Ah, well, it was TV after all, and it was meant to be entertaining, not meant to be New Product Development 101...

I have some hopes for Season 2 (summer of 2007), and hope they can attract a better inventor pool (by being less greedy with their contracts with inventors). Let's hope they can upgrade the next season... But for now, a toast to Doug Hall, Fremantle, and ABC for making the effort and taking a small step forward in showing that great new product ideas CAN come from regular Joes...

Did eBay win?

As the "patent" guy on the EIP team, I've been intrigued with the eBay case that was before the Supreme Court this year. As you can read elsewhere, the case was about the (mildly) narrow legal question of "is an injunction automatic in the case of infringement." I've got a longer post coming soon on the value of patents when they stand alone (that is, in the absence of a well-defined business case and commercialization assets beyond the patent), so I'm going to tread lightly for now.

Here's my read on the Court's unanimous decision that "went eBay's way" for now, but doesn't really affect matters except on the margin. First, a very quick synopsis so you don't have to review the case history if you don't have time.

Fact #1: Company X sues eBay for infringing a patent.
Fact #2: eBay is found to be infringing the patent
Fact #3: X wants eBay to stop and wants an injunction
Fact #4: eBay says "it's embedded into our system; we'll pay but not stop"
Fact #5: appeals court says: "once you're found guilty of infringement, if company X wants to force you to stop, that's their call and we have no leeway in the matter." So eBay must stop and no money can affect company X's rights to stop you.

So the question that the Supremes answered in their elegant way of avoiding bigger questions when smaller ones will do was to effectively say: "well, an injunction isn't automatic, it has to be weighed among certain factors." So, while eBay did win on the narrow question of an automatic injunction, the Supreme's really said the trial court has to decide if monetary damages are enough or if an injunction is warranted. So eBay may STILL face an injunction.

At a macro level, what eBay won was the ability for companies to avoid the ultimate blackmail/greenmail card that some patent trolls have used to pound a big player into submission. But eBay still faces the club. Think of it this way: the nuclear option is off the table, but the "end of life as you know it" card is still in play: the unknown of what COULD be handed down by the court (injunction or monster damages) is still out there. Only the very biggest players, with the very deepest pocketbooks vs. holders of the most fundamental patents will be affected by this ruling. And only on the margin. Yeah, some defendants might fight a little harder now, but I suspect they'll be few and far between. The risk of an adverse ruling is still higher than the cost to settle...

We're not in the infringement game -- we aim to create new products, not profit from someone infringing. So the eBay ruling has absolutely zero effect on EIP. But the case is interesting...

All Work and No Play...

... makes Johnny a dull boy. Or so they say... And I've been working my ___ off the past month or so... Therefore, it's playtime...

There are some upsides to being "Johnny" and some downsides. One of the upsides is that I get to be the "crazy" guy at EIP since I'm (a) the youngest, (b) the silliest, and (c) the funnest. Yes, that is a word.

If you happen to hear a gauntlet being thrown down, it's just your imagination...

So, anyway, since there are like 4 people that subscribe to this blog, I'm taking a heck of a risk here. But the other day we ran across the South Park character generator. I don't watch South Park, and I'm not a fan. But I respect them for what they've done with their show and the audience they've created. And the characters.

So, I challenged Dave and Vandy to create South Park likenesses of themselves (after, of course, I had created one). Below are the 3 of us at EIP. I challenge you to take the poll and tell me which one is me :)

Bonus points ARE awarded for using the comment field (after taking the poll) to identify which is Dave and which is Vandy...

Character 1:

Character 2:

Character 3:

The Art of Letting Go

Last month, I was prompted by a post by John Connolly to remark to my partners that being an inventor in our world is perhaps a heck of a lot like being an author in the world of book publishing. After the manuscript is complete, you need to trust the publisher to do their job and you need to step back and not get in the way. And today the good folks at McKinsey put out a piece entitled Learning to Let Go which was all about making tough but right decisions for a business, including exiting.

So the demons have again have conspired with the synchronicity time elves to force me to blog.

My earlier piece about the Importance of Passion left me with a mild taste of discomfort after I hit "publish". Yes, Passion is CRITICAL. But there comes a point when passion can become an enemy -- when perfect becomes the enemy of good. When your vision gets in the way of a commercially successful vision that is a bit different from yours. And, in a irony that only new product folks can truly appreciate, the inventor becomes guilty of NOT INVENTED HERE!

In bookland, when an author hands over a manuscript, Connolly posits that it's no longer his, but that he's cool with that, and ultimately it must become the reader's. First, it must become the publisher's, and they need to do their job -- the job the writer entrusted them with. Then it must become the reader's.

When an inventor does a deal with EIP and transfers the rights to their invention, I would posit that they should be cool with that and it must become ours. We must do our jobs -- the jobs the inventor entrusted us with. We hope that the inspired inventor has pointed us towards an unknown need on the part of the consumer, and that through our transformation and validation processes we will strengthen and cement the value proposition and the opportunity. And that we will own it for a little while. We have skills the inventor doesn't; experiences we can draw upon that are the very reason the inventor signed on with us. And in order to do our job, we sometimes need to be left alone to do it.

Along the way, we depend on the inventor to be the advocate; the impassioned counselor that pushes and prods to make sure we haven't done a lobotomy but instead have advanced the ball towards the biggest unmet need and the richest value proposition. We expect and want the inventor to argue with us and push us on decisions we make and on actions we take (or don't).

But at the same time, there is an art to letting go. There is a point at which the inventor has made his or her point, we've heard it, and our experience, judgment, and skill over-ride the passion. That's the whole idea of combining EIP's commercialization skills with the inventor's radical new thought -- together we make an innovation possible. Separate, or arguing ad nauseum, we are DOA.

At the end of the day, however, the new product must become the consumer's. No matter how smart and experienced my partners and I may be, the judge, jury, and executioner in our business model is the consumer. Ultimately, the consumer will tell us if we've got it right when they pull out their wallet (or don't).

In the gap period, the inventor (and we) must walk that fine line of passion, ownership, and letting go. If consumers tell us we've got it wrong, we too cannot be pig-headed and overcome by passion -- we must listen to the consumer. In some cases, that may mean the extreme of letting go of the invention and terminating the project. For the consumer is always right. For better or worse...

Passion has its place, but so does letting go...