Innovation Squared

It is the genius of the obvious: applying the “Lean Launchpad” methodology of entrepreneurship to science-driven startups. 

It turns out there is not much difference between the scientific method (hypothesis / experiment / analysis / refine hypothesis / repeat) and the codified common sense business development strategy pioneered by serial entrepreneur and Stanford b-school legend Steve Blank (business hypothesis / field surveys / analysis / refine hypothesis). So why not put them together? 

Which is exactly what the National Science Foundation’s I-Corps program has done in an effort to speed up the commercialization of promising technologies developed in university labs. The inaugural class of 21 teams from across the country gathered for the very first demo day last week in Palo Alto.

The results are impressive. Notes Errol Arkilic, the NSF program officer overseeing I-Corps, “Some of these teams have made more progress in understanding what their opportunity is and repositioning their effort in six weeks than projects we’ve supported for six months.”

Xconomy’s Wade Roush has been covering the project since it was announced last summer. Here are his thumbnails describing some of the proto-businesses: 

• TexCone (University of Virginia, Charlottesville: Laser-treated hydrophobic surfaces for reducing ice buildup on aircraft wings.
• Ion Express (UCLA): Cheaper, simpler ion channel screening test systems for pharmaceutical companies.
• BigData (George Washington University): Data mining for intelligence agencies and hedge-fund analysts.
• Carbon Cultures (University of Washington): Conversion of timber waste into “biochar” for soil amendment.
• Explosives Detection (University of Connecticut, Storrs): Nanocomposite materials that change their appearance under ultraviolet light when exposed to explosives.
• Fluid Synchrony (USC): Miniaturized, implantable drug infusion pumps for control of chronic pain.
• BiddingPal/iDecideFast (University of Illinois at Urbana-Champaign): Online tools based using psychological and decision science insights to help real-estate buyers and auction participants maximize their changes of submitting a winning bid.
• Ground Fluor Pharmaceuticals (University of Nebraska, Lincoln): A cheaper, simpler system for synthesizing the radiopharmaceutical agents injected into patients before PET scans.
• TOSCA (Rensselaer Polytechnic Institute): “Terahertz on silicon chip arrays” for defense, aerospace, and security applications that require very fast on-chip processing.
• GlucoSentient (University of Illinois at Urbana-Champaign): Technology that tweaks existing glucose meters to test for other health indicators such as HbA1C, a marker of diabetes.
• Graphene Frontiers (University of Pennsylvania): A chemical vapor deposition method for growing sheets of carbon atoms on plastic or glass, for use as transparent conductors in solar panels, smart windows, or advanced displays.

Gracious. 

Even the losers—those teams that won’t go on to receive next stage NSF grants—are winners, emerging from the competition with tighter business models, better positioned to go after other funding. 

Although the “lean startup” mantra of continuous consumer research has its limits (Steve Jobs was famously allergic to focus groups, saying that consumers cannot imagine they need something that does not yet exist, e.g., an iPad), it works beautifully for innovations that focus on improvements to existing technologies or address specific, readily identifiable needs. 

Add Doblin’s Ten Types of Innovation to the mix as an analytical litmus test, both to rate the odds for success and point to areas where business models can be strengthened, and NSF could find itself with a startup success rate the envy of every VC fund. 

Nerds rule!

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“Startups are not smaller visions of larger companies. Large companies execute known business modules. But startups search for them,” says Steve Blank. And to help startups better figure out how to find them, he offers a free online course through Stanford University called, “The Lean Launchpad.” The next class starts February 2012.

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(updated 3/26/12)

I-Corps Slideshare Presentations:

— J.A. Ginsburg / @TrackerNews

Innovation Diced & Sliced: Analyzing Past Success to Focus on the Next

There are, according to the designers at Doblin, exactly Ten Types of Innovation (R). And they should know, having diced and sliced through thousands of case studies involving hundreds of companies over nearly 14 years. 

The tool that emerged, rendered as a simple color-coded chart, is genius. It works essentially as a lens that makes it easy to focus on strengths and weaknesses. Considering that a gobsmacking 96% of innovations actually don’t return their cost of capital—in other words, they’re flops—it becomes absolutely critical to do everything possible to up the odds of being in the fortunate 4%. 

The most successful innovators and the most successful innovations—we saw this pattern time and time again—are those that are able to combine at least 5, preferably 6 or more types of innovations. 

— Geoff Tuff / Doblin / Monitor Group 

There are two Configuration Types: profit model, network, structure and process. Two Offerings: product performance and product system. And four Experiences: service, channel, customer and customer engagement.

Doblin-ers Brian Quinn and Ryan Pikkel’s presentation at the recent Design at Scale conference, Mind the Gap: Thoughts about crossing the stubborn divide between Design and Business, provides an excellent overview. (HT to Helen Walters at Thought You Should See This for posting the video, usually available only to conference attendees).

Not only do Quinn and PIkkel explain how the Ten Types can be used to guide the innovation process, but provide epiphanous insights into why business innovation can be so tricky:  

The roots of management science is operations research. And operations research is all about taking a complex problem and breaking it down into component parts, trying to use knowable data to arrive at knowable optimal solutions… It is a discipline that’s fundamentally rooted in analysis. It’s rooted in the prove-able. It’s rooted in the known. 

That makes innovation actually pretty difficult. It makes it really hard to look into the future sometimes. It can make dealing with ambiguity incredibly difficult for the average executive. 

In fact, the business world tends to root out ambiguity almost wherever it finds it. You see it in things like command and control reporting, delineating decision rights and using dashboards and scorecards to keep track of KPI’s—Key Performance Indicators… They are all about one thing: removing ambiguity and minimizing uncertainty.

So when you think about something like innovation, which is almost fundamentally about generating the new, it can make it pretty hard for the executive. Staring into the unknown can feel like staring into the abyss…

And really, who wouldn’t, given such steep odds stacked against success? 

So before getting up to pitch to a panel of VCs—who are, after all, conflicted souls torn between a desire to take risks and a mindset wired to avoid them—entrepreneurs would do well to use the Ten Types as a filter to analyze their Dream Ideas. A pitch that references at least six of them will help sift out the ambiguity, making it easier for VCs to see the Dream for the Next Big Thing it is.

— J. A. Ginsburg / @TrackerNews 

For a quick backgrounder—a prelude to Quinn and PIkkel’s presentation—here is Geoff Tuff’s six-minute explanation of The Ten Types: