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The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
The Idealog Guide to Innovation
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The Idealog Guide to Innovation

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  • 1. Idealog + AUT MSI BNZ HGM IRL DNA SKM = Guide (to)INNOVATIONWITH COMPLIMENTS
  • 2. The Idealog Innovation Guide CONTENTS01 INTRODUCTION THE MOTHER OF INVENTION Rather than focusing on getting a single idea 04 EARLY STAGE INVESTMENT GET CAPE. WEAR CAPE. FLY out in the marketplace, the aim is to transform “When I was young I thought money was companies into innovation machines ready to the most important thing in life; now I am hoon our nation up the OECD rankings. old I know that it is.” Plus: “If you haven’t figured out how to get the Plus: Mo money, mo problems government to help you, you are an idiot.”02 LEADERSHIP AND INNOVATION 05 INTELLECTUAL PROPERTY PROTECTION CREATING A CULTURE I AM THE LAW OF INNOVATION If you are serious about being a business Leadership is not just a label others stick on you, operating on the bleeding edge, you need a it is a vital skillset for the successful innovator. quality professional specialist in IP protection. Crucially, it means listening to other people’s They will set the attack dogs on your thinking. ideas at least as much as they listen to yours. Plus: The life cycle of an idea, Reinventing the Plus: Greed ain’t good. wheel, and Defining intellectual property.03 GENERATING IDEAS 06 BRAND INSIGHTS AND DEVELOPMENT WHAT THEY WANT, WHAT THEY NEED BRAND, NOT BULLSHIT Ironically, the easiest person to lose sight of Too many business people still think of during commercial innovation processes is the a commercial brand as something you slap on most important person of all: the customer. at the end: the label, the packaging, the logo. Plus: The Watering Hole, Murderboarding, Plus: Brand basics for dummies. Nutshelling, and You can’t be mad to work here, it would screw everything up.
  • 3. 07 PROTOTYPING AND TESTING SURPRISE! IT 10 SUSTAINABLE INNOVATION IS THERE ANY OTHER KIND? WORKS/DOESN’T WORK! Unless you work in a business that uses What you thought was your prototype roller desks and cartridge pens, you will is just an elaborate paperweight have noticed that sustainability is more Plus: Crafty corner and Bag a boffin than just a fad Plus: Not being green is getting harder, Lohas and Resources 08 LAUNCH AND SALES: COMMERCIALISATION GETTING INTO THE MARKET Now comes the biggest reality check of them all: convincing some customers 11 CONCLUSION INNOVATE OR LEARN MANDARIN. IT’S YOUR Plus: Mind the Gap and Two of our favourite CHOICE launches Innovation is pretty much the only thing that can prevent New Zealand from becoming a second-class 09 KEEPING THE CASH FLOWING WITHOUT PASSING THE BUCK plantation nation Completely obvious thing business people somehow still manage to forget #92: Cash is the lifeblood of innovationProudly brought to you by
  • 4. Innovation Guide L ast year IdealogThe Idealog published Cash for Ideas – The Idealog Guide to Commercialising Your Ideas. In its pages we brought together an expert panel from six of the top innovation support firms in the country. We enjoyed it so much, and learnt so much, that we’re doing it again. This time, rather than focusing on getting a single idea out in the marketplace, the aim is to transform companies into innovation machines The Idealog ready to help our nation hoon up Innovation Guide the OECD rankings. A tall order? Grenville Main, owner and managing director of research, digital and CHAPTER 1 branding agency DNA, says he’s heard the story before. “All my voting life we have heard governments talking about the fact THE MOTHER OF that we can’t just rely on primary products, because if commodity INVENTION prices tumble we are in real trouble – there is no backup. “But nobody has really pulled it off. The problem can be when nobody really gets that innovation is designed and engineered, it’s invested in over time. It’s no longer down to luck and it’s not always fast. We need to create an environment where visionary CEOs can get the support they need to build a second string to New Zealand’s bow.” Hamish Campbell, manager of investment services at the brand spanking new Ministry of Science and Innovation, is one of the key people charged with making it happen this time. “The government, from the prime minister down, is signalling that innovation is a key driver of the future economic growth of New Zealand,” he says. “We are talking about matching Australia’s GDP and we are not going to do that with business as usual. We need to encourage our companies and the next generation of entrepreneurs to invest in innovation and R&D. “We have to go beyond making our existing businesses more efficient. We need to out-think our competitors and innovation is key to doing this.”
  • 5. Innovation Guide “The government, from the prime minister down, is signalling that innovation is a key driver of the future economic growth of New Zealand” Hamish Campbell MANAGER INVESTMENT SERVICES, MSI Campbell believes it can be done. one, the Chinese can’t be paying all that direction, so the rest of the worldLook at Denmark and Sweden. money just for our cows, sheep and wants more of what we’ve got.Back in the 80s and 90s they were grass. So they must also be after the What all our experts agree on isrunning neck and neck with New intellectual property – what it is that that innovation is a Very Good Thing,Zealand in the ‘will farm for cash’ makes our dairy and meat taste and sell but it can be bloody difficult. Theirstakes, but they’re now light years better than other countries’. job, and ours with this guide, is toahead. And mobile phone monster And two, a lot of the really make it a bit less bloody difficult.Nokia somehow emerged out of a important innovation is not the “We aim to minimise the lucksawmill in the backwoods of Finland. weird and wonderful prototypes and involved, good and bad,” saysThese countries took their natural inventions, but rather the less showy Pryor. “There is always going to beadvantages and built a platform with business of just doing the simple things some good luck involved in gettingthem, which is what we need to do now better. It’s not just the startlingly something off the ground, but youif we’re going to catch up. new and Earth-shattering, it is also don’t want to be relying on it. The message from the the stripping of things back to their “There are the right connections,Scandinavians is that the next big essential core, or re-presenting them, the right meetings and the rightthing could come from anywhere. that is innovative business. deals. Our experience helps us see the “If you had sat down at a The challenge is to make things landscape when there are times whenwhiteboard 10 years ago and asked better, more efficient and a little bit you can’t.what sort of New Zealand companies different. It can’t just be about finding “It’s about having foresight,or industries should excel, cyber things that work overseas and trying understanding the commercialisationsecurity or digital animation may not them here, like with TradeMe. We process and then being deliberatehave come up on the list,” Campbell have to start pushing in the other about how you go about it.”says. “But we now have world-classcompanies in each of those areas.” Kevin Pryor, chief executive AUTEnterprises, is similarly optimistic. In our Cash for Ideas supplement (January/February 2010), the disgustingly “I don’t think we are bad at successful Derek Handley of Hyperfactory said: “If you haven’t figured outcommercialisation at all,” he says. how to get the government to help you, you are an idiot.”“Other countries have more critical The Ministry of Science and Innovation has just been created with themass, and much more money to expressed intention of helping Kiwi innovators in established businessesthrow around. Critical mass is to become world-beaters. It’s particularly keen to support three stagesimportant in getting high densities of development: emerging technology, companies that are active inof people. Big swathes of Asia are research and development, and the highest achievers with sophisticatednot innovative; they just copy R&D that also mentor and help other businesses.other people’s ideas. I think we just Manager of investment services Hamish Campbell describes the basicssuffer from all the things that small of the strategy: “I think as much as anything we are less about pickingpopulations and geography bring us. winners than backing winners. We have just made an investment of $92 “We’re an innovative nation. million over three years in 26 companies with proven track records, suchThere are Kiwi innovators doing as Fisher and Paykel Healthcare. This is about taking companies that arethings all over the place, especially already successful and helping them to accelerate their investment inwithin those primary industries.” innovation and that will drive future growth.” This seems right on two counts:
  • 6. CHEERS TO A NEW BREWHome enthusiasts, companies and clubs can now make thefreshest draft beer on the planet, thanks to Nanobrewing LtdD rinking beer is possibly the most popular male “BRINGING THIS PROJECT TOGETHER HAS BEEN INCREDIBLY pastime in the world. Global annual beer sales exceed US$330 billion and the market is highly STRESSFUL. ALTHOUGH WE’VE HAD INVESTMENT FROM TWO competitive. But a group of Kiwi guys have just OUTSIDE SOURCES, WHEN MSI CAME ALONG IT WAS A BIGupped the ante with a revolutionary brewing system. ENDORSEMENT ANOTHER LEVEL OF BELIEF IN WHAT WE B Master brewer Ian Williams, food technologist Anders WERE DOING FROM AN OUTSIDE PARTY ” OMWarn and engineer Sam Wood have joined forces to createThe WilliamsWarn Personal Brewery – a product that theybelieve is the first all-in-one brewing appliance available. With a successful career and impressive resume, Williamswasn’t looking for innovation; it found him in 2004. Whilelamenting the poor quality of his own homebrew oneChristmas, Williams’ uncle remarked that whoever could solvethe problems with homebrewing would become a millionaire. The seed had been planted and over the next six and halfyears, Williams invested his time, money and passion into theproject. He convinced his friend Anders Warn to come on boardand together they set up Nanobrewing Ltd in 2006. With the help of Sam Wood from ATI Engineering, Danishangel investor Michael Hansen and the design skills of MurrayPilcher and Shane Inder, they set about developing TheWilliamsWarn Personal Brewery. Homebrewed beer is invariably overcarbonated, cloudy,smells of yeast and tastes bitter. The homebrewing processis fraught: the carbonation, fermentation and clarificationprocesses take too long, there’s no way to remove sediment,microbial contamination is common, as is oxidation of the beer. “Thirty-two percent of Kiwi guys have tried and abandonedhomebrewing,” says Williams. “We’re the number one countryin the world for ex-homebrewers.” Now after years of research, R&D, prototype development,patent applications, planning, and financial worries, the teambelieve they’ve found the homebrewing holy grail. “We finally got there: 90 minutes work and then cold, clear,perfectly carbonated, commercial-quality draft beer made inseven days,” he says. Williams has poured all his money into the project, and Hansenand Wood are also major investors. But a lack of funds is a major “It was obvious from the start that Nanobrewing had a greatstumbling block for many entrepreneurs, so the company applied business opportunity and that we could support them withfor and was awarded R&D project funding through the Ministry of their R&D,” says Brown. “They’d clearly done their research.Science and Innovation’s (MSI) TechNZ programme. I was drowning in information!” Having secured previous TechNZ funding for his business Brown liked the blend of beer industry, engineering, designATI Engineering, Sam Wood approached MSI regional business and commercialisation skills offered by the Nanobrewingpartner Jenny Brown at the Hawke’s Bay Regional Council. She shareholders. “These guys knew what they were doing,” she says.invited Sean Sharman from MSI to meet with them and view For Williams especially, being awarded $200,000 ofNanobrewing Ltd’s new product. Brown and Sharman liked TechNZ funding in mid-2010 has had a significant impact onwhat they saw. the venture. The money has been used to develop and test
  • 7. prototype units, and carry out research into beer ingredients admits it’s been a steep learning curve. Ian Williams and Anders Warnand the brewing industry. “I found the innovation process very difficult, particularly have created what they say “More than anything, it’s been important psychologically. having spent all my money on it at the start. But the Henry is the first all-in-one brewingBringing this project together has been incredibly stressful. Fords, Ralph Laurens and Bill Gates who start big companies appliance available.Although we’ve had investment from two outside sources, aren’t any different to anyone else. It’s about having an ideawhen MSI came along it was a big endorsement – another level and going with it – you don’t need an MBA to do it.of belief in what we were doing from an outside party. To me, “The whole process takes four times longer and involvesthat support was worth 10 times more than the actual money. four times the expense that you’d imagine, so you need to beIt’s taken the pressure off all the investors.” ready for that. But we knew we’d get there eventually. You just While the guys have big dreams for their product, Williams have to believe in yourself and never, ever give up.”
  • 8. Innovation Guide the moment you turn your back.The Idealog The Idealog Innovation Guide The corrosive effects of this kind of atmosphere will stifle progress and cost you a fortune. And even if you have the money, chucking people CHAPTER 2 a bonus is no substitute for giving them meaning and excitement as a part of their everyday working lives. Numerous studies have shown LEADERSHIP AND that once people have enough cash to pay the bills, non-monetary INNOVATION considerations become much more important in keeping them motivated. Ask yourself these questions: What are you doing yourself that is not giving you the space to think creatively? Are you doing that to the people you are leading? Are you putting things onto them that they can’t manage? Are you hanging onto things that you should be giving to other people to deal with? The higher up you get in leadership the more people Fostering guide, Cash for Ideas, you notice and the less they tell you. How much are you really a culture of would have got the message that commercialising ideas is always a talking to them? innovation team sport. This is especially true if you work in a large organisation. You may have become accustomed to doing most of the work yourself. Here, successful leadership is about AUT’s approach is to build your Chances are, if you’re in the habit creating and maintaining a world- leadership on your strengths so you of coming up with innovative ideas, beating team that comes up with don’t end up a jack of all trades and you’re accustomed to leading people fresh ideas regularly. master of none. through unfamiliar territory. Being MSI’s Hamish Campbell says one “It’s really important in the ideas person can make you a thing really stuck with him recently leadership to know what you can leader by default. when he visited the Massachusetts and can’t do. You need to bring But leadership is not just a label Institute of Technology (MIT) in people in to cover your blind spots, others stick on you, it’s a vital Boston: “If you have the choice of and to watch you so they can learn,” skillset for the successful innovator. backing the A-grade idea with the says Drain. Crucially, it means listening to other B-grade team or the B idea with the The challenge is to let aspects of people’s ideas at least as much as A team, you back the A team every that work go and let others develop they listen to yours. time. Ideas are a dime a dozen. The with their individual talents, while It is through leadership, above best idea in the world without a great at the same time maintaining the everything, that you will create and team around it is next to worthless. all-important overview and vision. maintain a culture of innovation Investing in innovation is about You can get it badly wrong if you within your organisation. investing in people.” either fail to let go of things, or if Stephen Drain, director of Your staff will be looking to the you abandon effective management the AUT Centre for Innovative top dogs to see how they sniff each and leadership by going back to the Leadership, warns of complacency other, and how they behave if there’s knitting of your own specialism. on this. a bone of contention. If you slam If you feel you’re not up to this “Not all innovators are leaders, your office door and summon folks challenge you may also find yourself and not all leaders are innovators.” inside like a headmaster, expect reverting to micromanagement and an If you read our last innovation your staff to act like schoolchildren overemphasis on deadlines and detail.
  • 9. Innovation Guide As Bruce Lee said: “Concentrate authentic leader, if you meet them aton the finger pointing and you will them movies or when you’re out atmiss all the heavenly glory.” a social event, you won’t find them particularly different than the wayCreative spaces they are at work.”How many great ideas havesuffocated in unread notebooksand files in your office? Why do our children’s daycare Not knowing exactly what you wantcentres look heaps more creative than provides the space for your teamwhere we spend most of our time? to innovate and create. Tom Peters Why do we expect people to come put it this way: “Reward spectacularup with exciting products for vibrant failure. Punish mediocre success.”living while in solitary confinementsurrounded by machines? It’s time to take ‘open plan’ “If your team are happy and you areliterally – do all your planning in happy,” says Drain, “you are going tothe open, where everyone can get achieve a lot more.”involved. Here are some interior Trust is the magic ingredient thatdesign tips to get your ideas out in theopen where they can grow. underpins all of these. According to the Deloitte 2010 Ethics & Workplace “Not all innovators Get away from the norm. Survey, 46 percent of workers say are leaders and not all Newsflash: a lot of creative a lack of transparent leadership people do not just sit at a communication will drive them to leaders are innovators” grey plastic desk, staring at a seek new employment opportunities. screen. Have portable seating and whiteboards so that If you find yourself snooping on your team’s email or checking when – Stephen Drain breakout teams can create an they clock in and out, you are either environment that suits their terminally paranoid, have hired the needs. Think about using outside wrong people, or are in the wrong job. spaces, too. Personal space. As long as it Say goodbye to This just in – greed doesn’t create a health and Mr Know-It-All safety hazard, encourage people Business hierarchy used to be all about ain’t good to decorate their desks any way information control. The boss knew they like. It’s free to you, it’s fun, stuff the shop floor folks didn’t and Just like Dr Evil in Austin Powers, if and it will improve the team’s would decide how much of this to pass your idea of innovation is finding creativity. on to his underlings. Meanwhile, the new and imaginative ways to kill Get it up on the wall: Idea shop floor folks knew what was really people and destroy the world, then banks – pictures, models, flow going on where the rubber hit the you might struggle for quality sta . charts – should all go up on a road. The success of your structure wall wherever possible, and staff used to be measured by how well the A STUDY BY THE LRN should be encouraged to spend information flowed up and down. CONSULTANCY FOUND: some time checking them out Well, you can forget about all to stay in contact with other that. Information technology means it was ‘critical’ or ‘important’ projects. They will be inspired information is now flowing all over that the company they work and feel able to contribute. the place. There are probably plenty for is ethical of people inside your organisation,Components of the not to mention the odd one outside, prefer to be paid less andinnovation culture who know as much as you do about work for a company with what you do. ethical business practices Today, the job of a leader is not to than receive higher pay but attempt to control information; that work at a company withHave the courage to be yourself, says horse has bolted. Your job is to lead questionable ethicsDrain. “When somebody reveals a conversation with your people thatsomething about themselves that identifies what information is really Americans have left a jobis slightly surprising and deep, relevant and important, and how you for ethical reasonsyou start to trust them. A good should move on it.
  • 10. BRIGHTFORECASTA smart AUT inventionis predicting the futureA s the architects of New Zealand’s future prosperity PHOTOGRAPHY: ALYSON YOUNG eye agricultural technology as a key export opportunity, an AUT University research group is well down the development track with a device thatperfectly fits the bill. Horticulturalists in nine countries are using a sensing systemthat tracks more than a dozen climatic and environmentalmeasurements, which is the product of the university’sGeoinformatics Research Centre. The device is a second-generation prototype whose origins auspices of AUT Enterprises. Photos, clockwise from left:go back to work begun by research leader Professor Philip Geosense will act as a broker between system users and threeSallis in 2007. equipment makers the company has partnered with. A robot equipped with a microclimate wireless sensor Professor Sallis, an expert in mathematical modeling and “The research effort will continue through the Geoinformatics node collecting data whilenumerical computing, had his interest in collection of microclimate Research Centre and the company will essentially broker navigating through canopiesvariables – and forecasts that could be made from arrangements between the commercial providers and the in the Kumeu vineyard.their analysis – piqued by Chilean researchers whom he met in his end-users,” Sallis says. Stationary agro-monitoringformer role of AUT deputy vice-chancellor. What that means for AUT in terms of clipping the ticket or a station and on-robot mobile Sallis was in the process of signing a research collaboration consulting fee is unknown. Sallis wants any income to come back microclimate station loggingagreement with a university in South America when he met up to Geosense and thereby back to the university. data in field testing.with people doing similar work to his in geocomputation. “This is about trying to maximise the return to the university Interested in the kind of variables that could be used to do for the investment made through the operations of the centre.” The Mark II prototype of solar-power enabledprediction work, he talked to them about vineyard applications. The system’s secret is the algorithm that analyses the matrix wireless sensor node “It seemed to me that if you could somehow correlate a lot of environmental data and makes sense of it. It’s so cutting edge for the microclimateof factors around climate, atmosphere, plant conditions, soil that Professor Sallis has had the work reviewed internationally monitoring system, designedconditions and so on, we could build up a matrix of data that could and accepted for presentation and publication. Where to next? and assembled in the Geoinformatics Researchbe useful for predicting various events in nature.” “My interest is in how can we get into the area of precision Centre’s Instrumentation He reasoned that such fine-grained information would be agronomy, what tools and techniques we have that could assist. Laboratory.a valuable supplement to the macro data supplied by weather “Just to get a little lofty for a minute, the reality is we’re facingforecasters. Indeed, that’s what users of the sensing system at a major challenge for the planet in terms of food for the world. A researcher configuring27 trial locations around the world are telling him. Dealing with wine and things sounds all very grand but the a robot’s auto navigation and communication “The people on the ground – in the vineyards and orchards bottom line is if we can use these methods for growing corn and setting of the wirelessthat are using it – are reporting that it is very useful, that the rice, we can bring something to the party.” sensor node for collectinginformation is so much more precise than they are getting from To that end, AUT has signed a memorandum of understanding environmental data.the weather forecast,” Sallis says. with India’s largest IT company, Tata Consultancy Services The information can help with frost protection, preparing for (TCS), under which TCS will use the AUT researchers’ applicationdry or wet periods and helping decide when to use pesticides. programming interface to the sensor data. The Mark II prototype of the Microclimate Monitoring System, The Mumbai-based head of TCS Innovation Labs, Dr Arunassembled in the Geoinformatics Research Lab, has 17 sensors Pande, says micro-region weather forecasting is “the need of thethat upload data in real time to servers at AUT. hour” for farmers, especially in India, where agriculture is heavily There it’s analysed and turned into meaningful information, dependent on the seasonal monsoons.and made available to the growers via the internet. “Professor Sallis’ approach of using technology for capturing The next step is commercialisation. With the cost of system the local weather data and building a micro-region weathermanufacture beyond the resources of Professor Sallis’ research forecasting model is a step in the right direction to improvegroup, spinoff company Geosense has been set up under the agricultural productivity.”
  • 11. The Paper Clipc. 1871By, er, someoneThe paperclip is famously clever. Yet nobodyknows who created it. We won’t let this be you.If you’ve created a novel product, solved acomplex problem or generated a breakthroughidea, then this is your moment to shine.The New Zealand Innovators Awards.Celebrating genius. www.innovators.org.nz info@innovators.org.nz
  • 12. The Idealog casualty’s eye view of the experience. Innovation Guide If you are looking at kitchen utensils, you could shadow a top chef, or spend a day with someone with arthritis, toCHAPTER 3 really get a handle on what they need. The problem is actually the solutionGENERATING The purpose of gaining insight is to identify a problem, either out in the world or within your own business.INSIGHTS AND And according to Main, thingsIDEAS usually really get going when the problem affects both. “Ideas that stick are usually driven by need and opportunity,” he says. “A lot of people have discussions around the notion of innovation and where they could benefit from it. But if you’re not in real pain, that can be as far as it goes. Even if you feel you will be in pain soon, the urgency is not quite there for many businesses.” The pain usually comes in the form of dwindling sales, low morale and/or an inability to hold onto research, digital and branding agency top staff. Once it strikes, there is What they DNA Grenville Main says you have a temptation to shut it off quickly want, what to work out what really matters to people. “There is nothing new, there is by rushing to a solution without exploring the territory. This is as they need only better, stronger or more vital. If you can improve your importance to risky as charging into battle without sending out scouts beforehand. a customer, you can sell more. Innovation is all about scouting, Ironically, the easiest person to “If you can improve the service exploring choices and opportunities. lose sight of during commercial experience you provide them, you’ll Getting too focused on a specific innovation processes is the most also keep them longer.” application early on is a surefire way important person of all – the To find out about people’s to limit what you come up with. New customer. needs and desires, get up close applications for something are found Bill Wilmot of SRI International is and personal. Stefan Preston, along the way, or bits of an idea can emeritus professor at the University entrepreneur and advisor to the be used for something other than of Montana, director of the Better by Design programme at New what was originally intended. Collaboration Institute, and author Zealand Trade and Enterprise, knows Bad ideas fail to solve a problem, or of Innovation – Five Disciplines for all about this. He is a former CEO of solve it by means that are too complex, Creating What Customers Want. Bendon lingerie, and you don’t get expensive or uncool for anybody to be He believes most people don’t do much more up close and personal bothered with. It is vital to understand a good job of identifying customer than that. that it doesn’t matter at all that you needs. “They tend to just ask “You can’t learn it intellectually,” have solved a problem if nobody customers what they want, but he explains. “The way you learn how actually wants your solution. There customers cannot always tell them. to ride a bike is to ride a bike.” may be easier or cheaper solutions to They think they do a focus group and You are not selling a product, you the problem already around that people that answers the question. You can’t are selling an experience. So your are satisfied with, even if they are not really see what people need unless ideas have to be all about experiences, necessarily better. Or it may be that you shadow them and follow them.” not gadgets, features and technical people simply don’t care enough about A lot of great ideas start with a stuff. If you want to improve, say, the problem you chose to address. simple insight, and those insights someone’s experience of arriving at an It seems obvious that if nobody are nearly always first and foremost accident and emergency unit, maybe needs or wants your idea, even it’s about people. you need to put a camera on a trolley the most ingenious thing in the Owner and managing director of in the emergency department to get a world, it won’t sell. But you would be
  • 13. Want to growyour business?on www.irl.cri.nz0508 CALL IRL (0508 225 5475).Working in partnership with business
  • 14. Innovation Guidesurprised how many businesses are Approach. Define the ‘goldenwasting huge amounts of money and nugget’ or the unique advantagetime clinging to a clever new piece of of your approachtechnology that nobody wants. Maybe Benefits. Outline the benefits tothey’ll get lucky and a market will the customer, your partners inemerge before they submerge, but it’s the market ecosystemmuch more likely that they won’t. Competition. Pinpoint the Great ideas – the ones you stake competition and systematicallyyour future on – solve a problem in compare your approach withsuch a neat way that it changes the competitive products or serviceswhole experience. Or it solves aneven bigger problem that may be A Watering Hole session runs like this:different to the one you started outwith. Preferably it will also solve other The person putting forward theproblems we never even knew we had. idea does a one-minute pitch. Sometimes the problem can be theentire sector you are in; what next for They get 20 minutes of feedbackthe DVD rental business in the era of from the group during whichthe download? Or they can change the they are not allowed to speak. Overlyworld; what is the future of the car if negative people are given green hats,oil becomes scarce? and told they can only say something It is no coincidence that some of positive; the relentlessly positive getthe biggest companies in the world red hats and can only be negative.sell food, fuel and medicine. One way Some people are given big plasticto make big money is to generate spectacles called the Eyes of theideas for things people really feel Customer, so they must givethey need. Another is to create non-technical feedback fromproducts or services that people a customer point of view.want very badly indeed. Using the feedback, the idea’sHow to get ideas going advocate is coached to produceObviously, you are not going to get far if a new, improved, four-minute pitch.everyone is sitting in silence scratchingtheir chins and going “erm …” Repeat the process until THE DYSON Idea generation is seldom a something really good comes out AIRBLADEcompletely linear process. You can’t of it, or you put a duff idea out of its INSIGHT Most hand dryersjust work through a to-do list and misery and save everybody a lot of don’t actually dry hands,have an innovative idea pop out at the time, money and effort. making them almostend. Ideas turn, like clay on a potter’s completely pointless.wheel, responding to the controlledpressures placed on them. This was designed by Nilofer SOLUTION The Dyson There are as many ways to get Merchant, author of The New How – AirBlade forces unheatedthings turning as there are unread Creating Business Solutions through air through an aperturebusiness innovation books in your Collaborative Strategy, as a way to the width of an eyelash ataverage corporation, but here are combat the tendency for brainstormssome of the most effective out there. to create more ideas than any one high-velocity blade of airThe best approach is to use lots of organisation can pursue. that wipes hands dry indifferent approaches to get the best It essentially works through four just 10 seconds.out of your team. stages: CHANGED EXPERIENCE Decide what matters. This You walk out of BritomartThis process was developed by Bill involves setting out the criteria station toilets, start toWilmot. The key is to work through by which decisions will be evaluated, wipe your hands on yourthe following mnemonic: NABC. and what problems or issues you jeans and realise youThis means: intend to deal with. These criteria don’t need to. Genius. Need. Identify your product or are then displayed so that they can be service’s marketplace need referred to in discussions.
  • 15. Sort. This looks at all the available options and sorts them, THE BLUNTbased on the ‘decide what matters’ UMBRELLAcriteria you have chosen. Ideas thatare weak when compared with the INSIGHTcriteria are dropped. There is also Most umbrellasan option to add to the criteria if flap madly, turnnecessary. inside and/or break at the merest Testing. To what extent are any hint of wind. Wind of the remaining ideas viable and rain oftenfor the organisation? Getting the go together.answer may mean looking beyond the SOLUTIONparticipants in the original process. The Blunt Umbrella uses a patented Choose. Ruthlessly and tensioning system dispassionately decide which and is tested toideas warrant further work. function at wind speeds of up to 100km/h.The more complex an idea becomes, EXPERIENCEthe harder it is to tell if it will work, Next time it getsand the greater the chances that it Identify the ‘ifs’ in your idea and strong proposition. It gets at least wet and windy,won’t. So there is enormous value in eliminate as many as possible. one ‘if’ weaker if your sunscreen only you can actuallysimplifying your thoughts to see if The fewer the number of ‘ifs’ in an works for children under eight. stay dry. You findthe core is sound. idea, the greater the market for it yourself taking This can be done in a number is likely to be. For example, ‘If you Attempt to explain your ideas your umbrellaof ways: don’t want skin cancer, and if you using concepts a three-year- out in stormy don’t want to wear clothes that cover old would understand. Preferably, conditions even Try to sum up the idea in the your whole body whenever you are actually try to explain it to a three- when you don’t fewest words possible. Then see outside, and if you have about $15, year-old. You will be amazed at how need to.if it is still new and makes sense. you should get sunscreen’ is a fairly little bullshit survives this process. You can’t be mad to work here, because it would screw everything up As companies get bigger the sheer weight of the bureaucracy unless they are highly creative types too. needed to keep the behemoth going tends to create rigid This requires a high level of trust on the part of the boss, and structures that squeeze out people’s creativity. a high-quality team to get results. You can’t paper over the cracks AUT’s Kevin Pryor, explains: “By definition you are asking with a really tight brief and more milestones than a marathon, as them to behave counter-culturally.” that defeats the very freedom you are looking to engender. This means if you are in a big corporate you need to think The other option is to get out your chequebook and buy your outside of your cubicle to get the ideas flowing, probably with creativity from outside, which creates opportunities for smaller some kind of spin-o project team or department. innovators to get paid. Ideally, you want to get this outside the building and away For example, Google may be seen as a powerhouse of from the normal hierarchy. innovation, but according to Wikipedia, it has acquired no less Creativity often means acting weird and ignoring the rules, than 93 smaller businesses since 2001 and incorporated their so you probably don’t want to do it right under the boss’ nose, innovations into its own service o erings.
  • 16. Innovation Guide people, their time is worth a lot more money than yours and they are not The Idealog going to waste it listening to your Innovation Guide elaborate vision for a brighter future. All they want or need to know is what the new idea is, exactly how CHAPTER 4 much money you need to make it work, a pretty accurate estimate how much money it will make and whenEARLY STAGE they can take their share of it and run. “One of the big questions investors have is who is the team that is running the business?” says StephenINVESTMENT Drain, director of the AUT Centre for Innovative Leadership. “Who are they, do they have the goods? If not, who are you going to get in on the board of advisors, who can take on a leadership role?” Your one-line answers to these questions are what they are going to be saying to themselves over and over as they try to decide whether to trust you with their money. Then once they do sign, theyWhen I was young But the rest of the time you will be lucky if you can think about or their people will follow up on the detail and all the paperwork inI thought money was anything else. painstaking detail, often includingthe most important The first customers for your idea are going to be the people holding patents and insurances you don’t think you need.thing in life; now I am the money that can make it happen But you want to have this niceold I know that it is for everybody else, whether they are external investors or your bosses. comfortable bed of paper ready to nestle their money into. It is vital– Oscar Wilde You may be a salaried part of a big to get professional help in looking organisation. But unless you are in at budgets and contracts to avoidGet cape. Wear cape. Fly one of the flabbiest big corporates in nightmares later on.In his book Rules of Thumb, Alan M New Zealand (in which case you are But remember, initially you areWebber, founder of Fast Company going to have other problems trying selling a dream by convincing peoplemagazine, puts it this way: “Nothing to be innovative) the same principles it can be a reality.is real until somebody hands you a for getting money into your ideacheque. Until then you could have a apply as they would for a first-time No such thing asgreat idea or a mediocre one, an idea entrepreneurial startup. a free launchthat will reshape an entire industry DNA’s Grenville Main puts it like In case you hadn’t noticed, Newor disappear without a trace. this: “Access to capital comes down to Zealand does not have as much “You’ll never know until money how smart you and your idea are, and money in it as, say, the US. Forchanges hands. Then you get to how well connected you are.” example, as well as sheer scale andfind out.” To get this right, there are two population density, US innovation Stating the bleeding obvious? important things to remember: benefits from a vast militaryIt’s amazing how often it can be the people with the money need industrial research and developmentoverlooked. If you are lucky enough to believe in your idea, but not complex. The Defence Advancedto come up with innovative ideas necessarily the way you do. Research Projects Agency alone hasthere will be moments when money is Keep It Simple Stupid, at least to a staff of about 250 and a budget ofthe last thing on your mind. You can begin with. If you haven’t nutshelled US$3.2 billion to spend on emergingget caught up in the buzz of the new your idea (and you should have), now technologies with a militaryand the thrill of providing something is the time to do it. You may not have application. Of course, companiespeople love. This can be a particular the classic ‘elevator pitch’ moment, benefitting from DARPA largesse arerisk if you are a salaried part of a big but if you are lucky enough to land free to commercialise the productsorganisation. a proper meeting with the right produced in other ways, too.
  • 17. Innovation Guide Similarly, there is money washingThe Idealog around all over the world for the right idea. Unfortunately, it is really Mo money, mo problems hard enticing that money over here Believe it or not, it is also possible to have too much to New Zealand where we can play money – just look at Charlie Sheen. with it. “People talk about capital not If you strike on something that really gets people travelling,” says AUT’s Kevin Pryor. excited, everybody is going to want a piece. That’s “It can travel, but it usually doesn’t travel very far or in great quantities.” number of things can go very badly wrong – even worse Pryor says he recently attended than taking porn stars home to meet the wife. a conference in America where the This is another particular risk of attempting to speakers were talking about the innovate in large organisations with decent-sized difficulties in getting investment research and development budgets. funding out of the Silicon Valley for technologies developed on the east Stay hungry coast, let alone out of the country. Too much cash too soon can take the edge o your And even the investment money original idea. If you already feel like you have the gold, that is here can be a bit risk-averse human nature says you won’t do the extra yards to get says Mike Aitken, incubation things spot on. Pick your least favourite movie sequel manager at AUT’s Business as an example of this one. Innovation Centre. “Entrepreneurs need to be kept hungry,” says AUT’s “It’s a bit of a catch-22 – investors Kevin Pryor. “Sometimes quite literally!” are required to help fund startup development and generate early Uncomfortably numb revenue, but investors want to see Not getting any cash is the surest sign there is clients and customers on board something wrong with your idea. Running out of cash before they invest.” is the surest sign there is something wrong with the The money also often comes with business model you have attached to it. Wallowing in significant strings attached. investment dough can be like putting masking tape over “You almost never get all the the warning lights on your dashboard – it won’t stop you money you need,” says Wayne from crashing or blowing up if you are careless. Hudson, partner at specialist intellectual property lawyers Hudson Too many cooks Gavin Martin. “It’s more often that The more stakeholders you end up with, the more they will give you half, so you have to people you have to answer to. You can end up spending go to them for some more. And then so much time talking to them and lose sight of all the they’ll put all sorts of extra clauses other work you need to do. in their agreements so you end up with an underfunded project where, You want buy-in, not a sellout at best, its success has to be deferred Nobody hands over investment cash for nothing. Each while you find extra funding.” time you land a new investment you should expect to lose a slice of ownership and control of your company. And the rest If you get carried away you can end up selling the goose You want people to invest more than that lays the golden eggs. money. In getting the right people on It is also not unheard of for people to get booted your board, you are also looking for: out of the business they founded. Steve Jobs was out of a job for a while there, and Je rey Hollender founded innovative cleaning product company Seventh Can you piggyback on other firms 2009. “Being fired from the company you founded is get and keep this sort of money hard for any entrepreneur/founder to deal with,” says without knowing a thing or two Hollender. “If I had a piece of advice for entrepreneurs, I’d say, ‘Don’t give up control. And if you do, do it in a thoughtful, methodical fashion.’”
  • 18. Innovation Guide beyond the very early stages. It is all The Idealog too easy to overlook things and all Innovation Guide too hard to overcome your vested interest in your own ideas in order to make a proper assessment of how CHAPTER 5 innovative they may or may not be. Your IP person will do a ‘landscape search’, covering any existing patents and trade marks, scour trade journalsINTELLECTUAL and scientific literature, root through Google and more. What they arePROPERTY looking for is prior art: any material in the public domain that shows someone else has published this idea, or anything like it, before.PROTECTION They will also think laterally. What if somebody used similar technology or thinking in a completely different industry, to solve a completely different problem? This process helps you establish whether you are trying to eat someone else’s lunch, and how much effort they will put into defending it. It can also be an invaluable way of discovering applications for your idea that you may not have thought of otherwise. Forgive us ourI am the law ton of cash developing a bad idea or spending the worst years of your trespasses life fighting with someone else’s IP Let’s assume you find some evidence lawyers. that, shock horror, somebody,What has been will Here’s the first thing someone should do if they think they have a somewhere, sometime, miraculously thought of something similar tobe again, what has good idea, says HGM partner Wayne ‘your’ idea. And, taking into accountbeen done will be Hudson. “Check that it is really new. People are spending way too much that patents are country-specific, you believe their patent may be active anddone again; there is money on the protection without valid in a country where you want tonothing new under spending on researching whether they actually have something to protect.” do business. There is encouraging news fromthe sun What this comes down to most of fellow HGM partner Jason Rudkin-– Ecclesiastes 1:9-14 NIV the time is checking to see how old Binks. “Just because something isn’t your ‘new’ idea is and if anybody else novel doesn’t mean you can’t makeIt’s an odd quotation to open any is really using it in any country you money out of it,” he says.chapter on business innovation. want to trade in. A popular next step among highBut one of the best approaches to rollers with plenty of lawyer-lollyintellectual property protection is to Making sure the coast knocking around is to use these samebelieve this statement with religious is clear research techniques to challengeintensity, because the best way to If you are serious about being a the blocking patent in the courts,waste a lot of time and money on an business operating on the bleeding essentially by trying to prove thatidea is to believe you have something edge, you need a quality professional somebody else got there before thenew when you don’t. And you specialist in IP protection. They patent holder.probably don’t. will set the attack dogs on your HGM partner Simon Martin puts That’s the sort of wake-up and thinking, specifically by attempting it this way: “The only way to protectshape-up call you get from running to establish whether the ideas you intellectual property is to enforce youryour ideas past specialist intellectual come up with have already been rights. The ability to do that comesproperty lawyers like Hudson Gavin commercially exploited. down to how well you are funded.”Martin. It can save you wasting a You should not do this yourself Rudkin-Binks agrees. “The real
  • 19. Innovation GuideThe Idealog “People are spending way too deal with them later. This is also a popular tactic employed by some big much money on the protection players, especially those who see no particular reason to play nice. without spending on researching “There are lots of ways to protect IP,” says AUT’s Kevin Pryor says. “But whether they actually have sometimes you just don’t bother. You something to protect” just go to market. One of the reasons we spend so much time on it is because investors want to see it.” Wayne Hudson If someone is trading on an idea similar to yours and doesn’t appear to be making money from it, it may simply be a bad idea. It is also worth remembering that big companies big movers have massive spend an offer – just like when someone can afford to spend millions on some on IP protection. They will use owns but isn’t using a internet pretty wacky concepts in order to a sledgehammer to crack a nut.” domain name you want. develop new technologies and test Of course, if your entire Even if somebody is trading on an potential new markets. proposition is based on a specific idea and making money, you could If you get past all these hurdles technical fix, then you need to protect try to buy a licence from them for it. and still reckon its worth a trip to the this in order to sell it. This is why, for This may cover a particular process patent office, timing your visit may example, Apple has teams of lawyers you want to use, or a particular be very important. Ironically, the ready to slap a perfectly crafted writ market. If they agree it’s possible for public disclosure to secure a patent on anybody infringing its rights to everybody to win, you get to go to might be what gives the game away if the particular finger-scrolling system work and they get money for their you file it before you are ready to take is has on its computers. idea without having to. This is the advantage of your chosen market. But if you don’t have something way a lot of very big companies do “The important thing is the result, unique it can often be cheaper and a lot of very big business. not the process that gets you there,” easier to be businesslike, to put your Alternatively, if you think there says Hudson. “So there is a risk that pride back in its box where it belongs, is money to be made, you can people will see your patent and use it and try to do a deal. If the other party ignore the opposition and hope you to find a different way to get the same isn’t actually trading with the idea generate enough money and market result. For example, I had a client who this may be as simple as making them presence to fight it out or do a better had created a unique product. The The life cycle of an idea When not peddling IP advice, Wayne Hudson of IP those dates.” law firm Hudson Gavin Martin is often pedalling his Game over, then? bicycle. So I am not surprised when he illustrates the “Because of all those expired patents, you can pretty IP-checking process with a couple of examples from much discount any patents granted in the past 20 years, the world of two wheels: because they should never have been granted in the first place.” “I had an idea about putting an indicator light on my Ah ha! So you are on! Being an IP lawyer you can exploit gloves for when I was cycling.” this forgotten ground! It sounds great to me. It’s one of those ‘why hasn’t “But you have to ask yourself, why don’t we then see anybody thought of it before?’ ideas. “I checked and found an existing patent for that good idea. The lights from a car will obscure your light. Oh. Somebody had thought of it before. “Then another one going back to 1915.” Apart from the obvious one of not making any money, A long time before. another definite sign of a bad idea is that nobody is “With about 30 other similar patents between trying to copy it.
  • 20. Innovation Guide REINVENTING Defining intellectual THE WHEEL property It’s worth remembering that some ideas may already be out there, patents – these are defined by but only become law and your ability to enforce commercially viable them when the technology or economics are right. other people don’t For example, you make sure other people Sinclair launched don’t take your know-how the Sinclair C5 electric tricycle to in you, who have resources popular ridicule and that can help your business. commercial disaster. Whatever you have in your In 1992, he hit product line that is unique. back with the folding Early on in the creation of electric Zike Bike, an idea, this may be all you which sold even less than the C5, and is plug into the manufacturing soon to launch the and distribution system you X-1. Now here in New create to get your idea into Zealand we have the the market. And as Bill Gates Yike Bike, a three- pointed out, “Intellectual wheel electric folding property has the shelf life of tricycle and, well … a banana,” so you had better we’ll have to wait move fast. and see. In the meantime Honda, representing the big boys, has also just created its U3-Xprocess by which it was made was not Personal Mobilityevident just by looking at the product Prototype that isitself, but in lodging a patent it had essentially a movingto be disclosed, so other businesses electric barstool thatcould take a look at the patent, you stow in your carsee how it was done, and change it door.sufficiently and get round the patent.” In a future where Pryor is a touch more scathing. everyone in the“Some entrepreneurs don’t industrialised worldunderstand the nature of competition. can’t a ord petrol andYour competitor is the person who is is too obese or lazy tochasing the same dollar. It is not about walk anywhere, thingshow similar your product is. A horse like this may sell likeand a car are very different but if the the hot cakes thatcustomer is using them for the same helped incapacitatething, they are in competition. us in the first place. “There’s no point saying, ‘But minehas four wheels and theirs has fourlegs.’ The customer doesn’t care.” In the intellectual propertybattle of wits, you need to have yourstrategy ready, and the team toimplement it, because you can bet Top: Honda’s U3-X Personal Mobility Prototypethe opposition will. Bottom: New Zealand’s Yike Bike
  • 21. FIRST DEFENCEAt the forefront of cancer research, Kiwi company Pacific Edge Biotechnologyis receiving support from the Ministry of Science and Innovation to developlife-saving early detection toolsW e all agree that the world would be a much better place without cancer; however, the tools available to clinicians often fall well short of expectation for early detection and good management. That’s whyscientists are working day and night to develop diagnostic andprognostic tests to help increase detection and survival rates forthose affected. Pacific Edge Biotechnology Ltd (PEBL), a Dunedin-basedbiomedical company, is at the forefront of groundbreakingresearch and product development in this field. Founded in 2001,PEBL was set up with the aim of finding better solutions for theearly detection and management of cancers. After a decade of intensive research and clinical trials, the Cxbladder provides general practitioners and urologists with acompany’s first product, Cxbladder, is commercially available in quick, cost-effective and accurate measure of the presence ofNew Zealand and Australia. This simple to use, non-invasive urine bladder cancertest will allow for earlier and more accurate detection of bladdercancers. otherwise. MSI’s contribution has been vital in showing our “Bladder cancer is a significant and challenging disease with shareholders that New Zealand supports the push.”very high recurrence, giving rise to a large burden on clinicians In the case of Cxbladder, MSI’s funding helped remove theand healthcare funding,” says PEBL’s CEO David Darling. “Bladder technical risk in several products as PEBL transitioned fromcancer has the highest total medical costs of any cancer—in the initial discovery through the product development into athe US it’s approaching US$200,000 per patient from detection prototype product—a difficult and resource-intensive period.to death—and it progresses quickly, so waiting isn’t a good At this stage, quantifying the returns from MSI’s investmentscenario.” is difficult, as PEBL’s first products have only just gone to About 50,000 cases of haematuria (blood in the urine) are market. However, these markets are large and there’s a stronganticipated in Australia and New Zealand, giving rise to about and unmet need for this technology in early detection and3,000 new cases of bladder cancer in Australasia each year—80 management of cancer, says Darling. The Australasian marketpercent of them among men. Cxbladder provides general for bladder alone is estimated at 55,000–85,000 tests annuallypractitioners and urologists with a quick, cost-effective and while the US is expected to have 1 million people presentingaccurate measure of the presence of the cancer. It also enables with haematuria, giving rise to approximately 67,000 newurologists to reduce their reliance on the need for invasive tests incidences of bladder cancer. The clinical evaluation of thesesuch as cystoscopy. Test results are available for download patients with blood in their urine is expected to cost the USthrough a secure web portal in just two hours. healthcare system US$1 billion a year. “It’s been great to go through the hard yards of doing the “We’re entering multimillion-dollar markets, but it’s a binarydiscovery work and all the product development and actually event—you either get into the market and make huge returns orgetting it through the clinical study, which is very tough,” says you don’t,” says Darling. “The MSI funding will enable us to makeDarling. “The research is fascinating and you get a big sense of these multimillion-dollar returns.”satisfaction being involved in this human health work.” PEBL recently signed a deal with leading Australian This type of scientific research involves an ongoing healthcare provider Healthscope to market Cxbladder acrosscommitment to innovation, which, of course, requires funding. The the Tasman. PEBL now plans to hit the bigger markets ofMinistry of Science and Innovation (MSI)—the lead agency driving Europe, Asia and the US.the science and innovation sector in New Zealand—has been a Senior MSI investment manager Justin Andrist saysvital supporter of PEBL’s research and development since 2001. PEBL illustrates what the ministry looks for in health-sector Over the past ten years, PEBL has been awarded $2.14 million investments: high-value exports coupled with strong technicalin MSI funding, with each application dedicated to a specific R&D and management teams.project. “Pacific Edge continues to move from strength to strength, “The funding has helped PEBL overcome large technical and the agreement with Healthscope is a good sign of bigger andhurdles,” says Darling. “We probably wouldn’t be around better things to come,” he says.
  • 22. Another of PEBL’s ventures is the creation of a colorectal “A lot of science is needed to polish the raw technology PEBL CEO David Darling: MSIcancer prognostic test, which should be commercially ready by into a fully commercial product,” he says. “The business is has been a vital supporterlate 2011. The company’s gastric cancer research—which received now about rolling out the bladder-cancer detection product of our research and$1.2 million from MSI in 2006–2007—is also nearing completion. and the other products in the pipeline. The pipeline must be development in the detectionOther products to test for melanoma and endometrial cancer are managed intensively to get these products through to the of bladder cancersunder development. market. We’re still a fledgling enterprise that requires support Getting in early has given PEBL an advantage in an and it’s a relatively long window from startup through toincreasingly competitive area, says Darling. generating revenue.”
  • 23. the genuine article. Nor can it just be a vibe or even The Idealog the personality that your product or Innovation Guide company projects out into the world. For way too long too many try-hard branding exercises have come across like the wacky guy at the party. TheyCHAPTER 6 dance around screaming about how rad they are, but deep down everyoneBRAND knows they have the heart and soul of a number-crunching pen-pusher. The electron microscope that is democratised social media will spot any cracks in a façade in a nanosecond. “The greatest danger that New Zealand has got is too few heroes,” says DNA’s Grenville Main.DEVELOPMENT “Currently if people have a product they want to get off the ground, too many think it will work famously if they give it a touch of Kiwi ‘character’.” To really fly, the brand has to be the same out in the world as it is at your offices, otherwise you come across like a toddler in a Tuxedo or an old biddy on a Ripstick. The UK’s award-winning surfwear company Finisterre is run by surfers, who nip over the road from their HQ to the waves whenever the Brand, not drive innovation to create a leaner, more efficient supply chain, and this conditions are good – and they make sure people know that. bullshit is important work to do. But you will eventually and inevitably lose the Displayed integrity is vital because it creates the genuine experience Branding isn’t a particularly useful price war, partly because some of that you are really selling, and what word to describe what we do these these guys have a habit of not paying inspires people to hand over their cash. days. It harks back to the cattle for life’s little luxuries like research This is how people learn to trust their stations, where an indelible mark and development, living wages, relationship with you, and feel that you only told customers whose meat was human rights, pollution control and won’t let them down. This is the holy whose – not what was under the skin. health and safety. grail, the brand loyalty that makes for Unfortunately, too many business So you have to ask yourself, aside consistent sales. Main refers to this people still think of a commercial from those new conscious consumers approach as ‘intimacy’. brand in the same way, as something who really care about living wages, “Innovation without intimacy you slap on at the end of the process: pollution control and health and doesn’t really work that well; it’s the label, the packaging, the logo. safety, what are your customers going hard to sell to people,” he explains. Maybe that’s because so many of to pay you those extra dollars for? “Intimacy without innovation our grandparents were simple cattle Operational excellence and might increase your connection and farmers. But times have moved on faultless customer service are a given, value to people, but over time if the and we are now forced to compete in but it will probably not be enough. It is product or service offers nothing new a globalised commercial world they largely your brand that will make your it is going to get overtaken.” would barely recognise. Chinese product unique and inspire people This thinking has been partly factories can pump out pretty to desire it over and above the cheap driven by the explosion of internet much the same snazzy features and knock-offs. resources that give consumers much packaging as any product you create, In the mind of the customer, which greater control over the messaging within weeks of it going on the market. is the only mind that fills up your order they receive. And they are also increasingly capable book, your brand is your product. Today’s consumers want of putting together a half-decent look It shapes how they perceive your marketing not just to be targeted and feel for the thing. product and makes them feel what at them, but to be about them, as Fighting it out with them can they want to feel when they invest in specifically as possible. They want to
  • 24. Innovation GuideGrenville Main“Innovation withoutintimacy doesn’twork that well;it’s hard to sell topeople. Intimacywithout innovationmight increase yourconnection to peoplebut if the product Coca-Cola is protected not by a patent, which would have timed out in the 1930s,offers nothing new it but by its unique branding personality and the e ectiveness of its worldwide supply chain, giving it the power to fight o would-be challengers.will get overtaken”own brands that contribute to their So is traditional marketing dead? of Hollywood superstars? Toyotapersonal story of who they think are “No, it has been flipped,” says saw the building wave of concern onand who they aspire to be. Main. “It’s not so much about drawing climate change, and made sure its This can’t happen in isolation and people to the product, but setting up product was in the right spot at theyou can’t fake it. what they will experience when they right time to surf it. For example, my power company happen upon it themselves, or whenrecently sent me a free tea towel with it is recommended to them. These The difference a brandbranding bumf all over it about how days there are only individuals – the can makewe are neighbours. challenge is how to engage with them Vibram Fivefingers are weird looking But I see it more as a corporate en masse.” rubber-sock shoes originally designedenergy behemoth Branding is also a way you can to stop people slipping off yachts.that neither knows nor cares who tap into this unprecedented level of Then a guy called Barefoot TedI am as a person. I switched to cultural noise and focus it around a started wearing them to run very longanother because the sustainable product to increase its desirability. distances, on the rare occasions whereethos that permeates its supply chain Who would have thought a relatively he bothered to wear any shoes at all.and brand are much more in line with inexpensive electric commuter car like He contacted Vibram head office andthe sort of person I want to be. the Prius could ever become the choice somehow managed to get through to
  • 25. Innovation GuideThe Idealog Vibram Fivefingers (left), as seen on Barefoot Ted, below – an example of living the brand. Brand basics for dummies Your brand must: Sorry, I can’t hear you communications. over the sound of how awesome I am Spend less time with nightingales and peacocks. One is just a voice, the other just a colour. – Rumi With advancements in graphic designer software and website design, you can polish a turd to quite a high Vibram president and CEO Tony Post. lasting than the counterfeits. But lustre these days. A keen runner, Post loved the idea. the firm is striving to prove that its It’s easy to set up a web page, Then writer Christopher people love their product more, are Facebook page, Twitter account and McDougall wrote about Ted and other committed to it and the community more around an idea that makes it ultra runners in his 2009 book, Born around it, and are innovating like seem a great deal more solid and to Run, which became a best-seller crazy to increase the product range professional than it really is. You can and sparked a massive worldwide ahead of the competition. fool yourself and spend so long empire craze in barefoot running. building that it can take a while to Since then Vibram has been careful THIS ILLUSTRATES: realise you aren’t making any progress to keep the shoes close to the mystique There is a crucial difference or selling anything. of the book, and the cast of characters between features and brand. Unscrupulous agencies and like Ted who do amazing things in Your top executives should live consultants may aid and abet these them. Every new owner is encouraged your brand. delusions. Even sensible ones may do to feel that they have joined this The right brand champions or if you order them to and ignore any fascinating adventure story. celebrity endorsement can add misgivings they may try to point out. There are half-price knock-off momentum. So if you have a really snazzy Fivefingers all over the web, and it’s You cannot control today’s mass brand, it’s a good idea to switch it off difficult for Vibram to prove that its instant media, but you can run from time to time so you can see the are twice as well made and longer with it. thing in the raw for what it is.
  • 26. Progress is the distance travelled. We’ll help youto establish, exploit and secure the appropriaterights to your intellectual property. With ourexperience and your idea we can maximise theopportunities presented by your intellectualproperty and capture value for your business.We have a passion for ideas and where they go.It’s what we do because we like doing it.www.hgmlegal.comTechnology & Intellectual Property LawyersLevel 8, 2 Commerce St TEL +64 9 308 7300PO Box 105900, Auckland City FAX +64 9 308 7301Auckland 1143, New Zealand info@hgmlegal.com
  • 27. Innovation GuideThe Idealog The Idealog Innovation Guide CHAPTER 7 Surprise! It works / it PROTOTYPING doesn’t work! AND TESTING W hat you thought was your prototype is just an elaborate paperweight. And what you thought was the finished product is just a prototype. To paraphrase Bananarama, “It ain’t what you do it’s the time/place/ way that you do it, that’s what gets results.” And to sort that out you need to test your idea, the prototype, and all the processes around it again and again. ‘What?’ I hear you cry. ‘But it’s already perfect!’ Is it really? “Most things are going to be up to three or four times more complicated and expensive than you think they will be,” says Hamish Campbell, manager of investment services at the Ministry of Science and Innovation. “The things you think are the most important are likely to be the least important, but the rewards are also significant. “On average every dollar we invest returns at least four dollars to the company’s bottom line. R&D is about balancing risk and reward. By having a solid product idea with market pull
  • 28. Innovation Guide Crafty corner HOW TO DO FAST PROTOTYPING You know that space at your kids’ playcentre where they keep all the glue, paper and pipe cleaners? Install one of them in your o ce. Fast prototyping is about knocking something together as quickly as you can that will simply demonstrate your basic idea. The best things to use are the craft materials beloved by children prove the quality of your idea, and y everywhere: string, cardboard, ar without proof, you aren’t going to get play dough, colouring pens, you minist help from the ministry, innovation name it. anybo incubators, or anybody else. At this point you should shou The process should be rigorous absolutely not use fancy becau and relentless, because whatever visualisation software or hire you find out, good or bad, is useful an illustrator. You need to do wh information with which to continue this yourself. It’s about having innovating. an experience to design an Testing behind the closed doors t experience. de of a research and development Ideally, whenever you go d t nt department before you go to market into a meeting about the idea, also protects your business’s brand: it you should take in one or more means you don’t show people all your of your prototypes to throw “It’s easy to kill losing dumb ideas that don’t work. “I know of large companies in this around. Literally. That’s what fast prototypes are for. It could ideas. To be a great country, whose strike rate is about two successes and eight failures be a new car design made out of play dough or a new packaging company, you need in every 10 new ideas they take to option mocked up with old cereal market,” says DNA’s Grenville Main. packets; the aim of the game is to to kill most of the “They have reached the stage get you thinking in the real world good ideas, too.” where they feel engaging their public is too difficult and complex, and in a really tangible way. This way you can also keep have developed an approach that is thinking. If you have a $100,000 – Steve Jobs monetised on that success ratio, so they effectively just take a guess, put model of a new shopping complex you are likely to be reluctant to let CEO, APPLE stuff out there and see what sticks,” the o ce junior move it around he says. and reshape bits. That way, you “This seems like a very expensive could potentially miss out on a and a skilled team, you can screw the way of doing things. Why not put your multimillion-dollar tweak that scrum in your favour.” resources into the top five and get, she is mulling over but can’t quite AUT’s Kevin Pryor agrees. say, three results? You will spend less visualise without playing with “We’re not interested in ideas that money and get better results.” something. If it’s made out of old don’t stack up. We’re after good ideas For technical innovation, loo rolls, no problem.RYOICHI TANAKA that are backed up by good science Industrial Research Limited (IRL), and good technology.” a Crown Research Institute, offers a Testing is what enables you to range of services that could help you
  • 29. Innovation GuideThe Idealog hone your idea and properly target it. dealing with Crown entities like IRL, Commercial manager Gavin whose mission is to fast-forward NZ Mitchell wants to see more New Inc, not rip you off. Zealand companies treating this “When a company comes to us as a fundamental part of the and brings with them intellectual innovation process. property, for example, the ownership “In New Zealand, we really lack of the IP remains with them,” says companies that budget for research Mitchell. and development as a part of their “When IP is created by IRL, we core business, as they would support will license control of the IP to the Bag a boffin for capital spending development customer to ensure that the customer What should you look for in an R&D bedfellow? on things like distribution and is protected in their field of interest.” Here are the essential ingredients that sort the marketing. We really want them to The earlier you get properly mad scientists from the Einsteins. start thinking, not about today’s organised test-based research and product but the product that will development rolling, the better the lead them into tomorrow.” results will be. all very well somebody being a genius, Like all good services to Even a great idea can go off on but if they have no interest in making your innovators, a large part of what IRL a tangent, or be changed so many business, or indeed any business, make does is removing some of the risk times you lose the thread and have tons of money, then steer clear. from this very risky business. to go back to the beginning to “Larger companies have the resurrect it. a solution. We all have our hobby horses, wherewithal to invest in research Your process should include but technical people who insist on using and development with the capturing and storing each stage, the same materials, computer software or knowledge and skills that they just like a good backup program on approaches with every problem are unlikely have,” says Mitchell. your computer, so you can backtrack to be innovating. “Outsourcing de-risks areas that if things go astray. they are not necessarily so certain The key is that you need to have technology. Warning! Designing gadgets can about, that may be outside their core a strategy and goals, otherwise you be intoxicating, especially for techy folks, and competency.” are just fiddling in your garage rather may not be as exciting as the simple solution These days it’s relatively easy than doing the business. that could save/make you a fortune. to contract in specific expertise to “We would like to see companies augment your current research and get away from relying on particular part, product or in the combination development or outsource the whole serendipity,” says Mitchell. of solutions placed together, but you want lot if you are too small to do this work “And there is too much reliance your R&D people to keep an eye on the yourself. on the enthusiasm and goodwill of intellectual property pea under the various A lot of blood-sweat-and-toil a few innovative people who go back cups they will be playing with, otherwise they innovators would rather place their to the money men and say, ‘Hey, we may lose it completely in the process. They reproductive organs in a blender than have got something.’ must constantly return to what is unique hand their idea over to strangers to “We want to see research and about your proposition. analyse. But the risk of IP theft can development departments with a be minimised with the right legal and strategy, where they have a map on contractual structures in place. the wall of the products they want to This is especially true when look at and those in development.”
  • 30. Innovation Guide D BNZ Business Community FamilyFull details, our current Disclosure Statement and Qualifying Financial Entity Disclosure Statement may be obtained from any BNZ store or Partners Centre, or viewed on our website bnz.co.nz. BNZ terms and conditions,fees and charges apply. Correspondent bank commissions, fees and charges may also apply. You must be registered for Internet Banking for Business and opt into international payments in Internet Banking for Business.
  • 31. The Idealog Innovation GuideCHAPTER 8LAUNCH AND SALES:COMMERCIALISATION Y ou fervently believe you to launching innovation. Both Red Bull started selling accounting have a great product or approaches come down to tapping into software I’m not sure I would be service, and you have the need in the mind of the consumer. convinced, whereas it might just get managed to attract If you are extending a category, away with punting life insurance. enough resources to your launch will say simply and clearly “If it’s a new market model, a new it to get it ready. Now comes the why yours is better than what is synthesis of emerging trends, latent biggest reality check of them all: already available. needs or new thinking, they need to convincing some customers. “We get a lot of people coming in know what it is,” says Main, “and that The concept of ‘launching’ things with another skincare product, the is a very different conversation.” onto the market still holds a lot of next beer or more coffee,” he says. Of course, its newness does give currency, and for good reason. If “If its an existing category, you you an instant differentiation point, you can make a big splash, you can then go down the path of ‘does the which is kind of what it is all about. jumpstart sales and create initial world really need another one?’ If brand awareness. It can also be a so, why is your product going to be Warning: launching can vital signal to investors that you one of them?” lead to crashing are at least on your way to paying If, on the other hand, you have So you reckon you are ready for them back, and not just frittering created something genuinely new launch? Here are some of the pitfalls away their money on coffee and you will need to explain exactly what and prat traps. whiteboard pens. it is, why it should exist and why the But you need to be properly customer needs it. It’s also good to prepared. DNA’s Grenville Main be very clear on how big a stretch With debt threatening to sink you, proposes two distinct approaches for this is for you and your brand. If and the competition coming up fast,
  • 32. Innovation Guide Mind the gap EUROPE’S G MOBILE PHONES An important lesson for anybody The big players lined up and duly like they needed what the launching something new is that bid their billions to get one of the technology was o ering them. sometimes the gap between what limited number of licences up for The big draw was supposed to the technology can do and what the grabs. They then struggled for years be taking and sending photos customer actually wants can cost to start making their money back. By by phone, but back then very few innovation firms a lot of money. 2004 many of these firms were either people really felt that was necessary: At the end of the 20th century refusing to provide the services they they were quite happy just phoning or the European Union ordered an had paid for, or asking governments sending texts. auction of licences among member for some of their money back. Now of course everybody has caught states to companies wishing to Although there were various on, and the money is rolling, but it’s run the fledgling 3G system that technical and investment hitches, interesting to consider how many firms would revolutionise mobile phone the core problem seems to have been would have survived having so much technology. that consumers simply didn’t feel cash out on a limb for so long.there is always the temptation to hurdles. You have to take rejectionjust fling the thing out there and get as a sign the market is telling yousome sales. But being premature can something you didn’t know before.” The launch is not the end of thelead to stains on your balance sheets Then there is the Black Swan marketing or innovation process. Ifin the long run. theory, which focuses on those rare your business plan, personal energy It’s true that Ready! Fire! Aim! events – such as wars, scientific and finance is only just enough to getcan be sound thinking, but you breakthroughs, acts of God – that you you staggering over the launch line, itactually need to be Ready! can’t foresee but often turn out to be is unlikely to be enough. If it’s going to work, you will have total gamechangers. Part of the SAS selection courseto make changes on the run as the involves long marches where themarket responds. instructors sit by a truck about 200 “We do get people who come along metres from the end, in a ‘false finish’.with the right idea but without the You might think that your latest Any candidate who stops for eveninformation they need to make it waterproof jacket is ideal for the a moment at that point is binned.great,” says Main. slopes, so you have an ace winter Innovation tends to be like that. “That’s okay, because we can work launch with frozen vodka and some “If you are talking about success,”with them on that. But it has to be rad snowboarders. says Main, “you are usually talkingthere and sorted well before launch.” Nobody buys it – until a top about long-term, painful and very AUT’s Kevin Pryor adds: “Timing cyclist decides it is the best expensive success. But it is planned,is a big issue, but you can’t control the invention since the wheel for riding considered, therefore it’s a success.market. You have to understand the in the rain. Not the end of the world, The biggest mistake many makemarket and get over the emotional but still time for a rethink. is putting huge effort into launch,
  • 33. Innovation GuideThe Idealog “If something is new you need to establish it in the minds of the consumer,” says Main. “To do that you need to make it simple and compelling for them, but also set a high benchmark for your service proposition and experience to make it harder for competitors.” Remember, as it is almost impossible to prevent copies entering the market, the next best thing is to make sure they remain cheap and nasty copies. Even if you Two of Grenville Main’s favourite launches feel you have created raw product, service will be at least as important. Sym3 specialises in automation design using 3D visualisations, In the same way, if you have a new including baggage-handling systems for airports. service, the quality of the products Its greatest challenge was getting in front of the right people. Once you use to deliver it will almost there, its proposition was simple: it had a more useable and powerful always be vital. You might just product and it was half the price of the competition. get away with a less-than-perfect product if your service is good and Foot Science makes orthotic foot supports and recently expanded vice versa, but if both are below par, into retail products. It specifically targeted one of its industry’s you are stuffed. biggest international conferences. It is now o and running and has “We want to keep people buying a year to gain ground before the competition gets o the back foot. it, or if it has a longer life, to keep using it,” says Main. “We don’t want them to ever be doubtful of our product’s value, or be lured away to our competitors. People think success is just a numbers game: going ‘ta-da!’ and then not knowing ‘It’s too late to change anything increasingly it isn’t. Consumers ask what to do the next day. If you have now,’ you say to yourself. ‘We are themselves, ‘How well does this fit gone with the big bang theory, made launching in X weeks.’ You may be my needs? How does this make me too much of just getting in to the right, and that little niggle could be feel? Does it align with what I value market and spent all your cash and for nothing, but you should listen and is it good value?’ And even, ‘Am energy, then you’re boned. If you to it anyway. Keep being critical: I more able to self-determine or be have still got a bit of money kept not so much that you second-guess self-sufficient?’” back and some energy left you can yourself, but enough to know if it To answer these questions you start from day two and make your might not work, and what might identify ‘touchpoints’—all the market, engage customers and make need to be different. places where your product or service a go of it. If not, if you don’t have a touches people’s lives—and design plan, you’ll need to reiterate, come The followup: the hell out of them so that at least up with different ways to make your making sales the key ones work beautifully and offer work and try again.” Even if you have a great launch, seamlessly every time. You might sales will always take longer than have created the best garden rake you think to get going. Once your in the world, but if your online store Launching something is deliberately launch has got people on board the is clunky and unreliable, nobody is designed to be exciting, so it is very good ship New Product, the best way going to buy it. easy to get carried away with your to keep them there is to treat them Once you have got sales rolling, it own multimedia ad campaigns right. is all about the upgrades and updates without noticing fatal flaws in your This, plus your need to continue that keep people interested. product. You then find yourself to differentiate from the cheap “Keep paddling, bailing and papering over ever-widening cracks copies your idea will have spawned, repainting the ship as you go along,” in the brand or business plan. means impeccable service. says Main.
  • 34. CASE STUDY D N A I N A S S O C I AT I O N W I T H I D E A LO G M A G A Z I N E OPEN SOURCE / DNA REDEFINING A TRANSFORMATIONAL BANKING IDEA
  • 35. SUSTAINABLE, INNOVATIVEINFRASTRUCTURE
  • 36. Innovation Guide The Idealog Innovation GuideCHAPTER 9KEEPINGTHE CASH Completely obvious thingFLOWING business people somehowWITHOUT still manage to forget #92:PASSING Cash is the lifeblood of innovationTHE BUCK and any new business. Without it, even really exciting things stop happening H ow soon you will need a really serious wonga injection depends on what you are making. In the high-tech world of billion-dollar apps, you may just need a laptop and a year’s supply of instant noodles. If you are engineering something, you may need enough for a workshop and some grease monkeys. If you are developing the next fighter jet, you
  • 37. Innovation GuideThe Idealog might need to start shifting cocaine should never waste a good crisis. says Walters. “But looking at their through a deniable third party to pay “My view is that there is always a Companies Office details and doing all the bribes. good time for innovation,” he says. some other research I know there are Serious investment buys you time “With the recent reports of increased some serious investors behind that to develop and market the thing economic activity, now is a really firm. They have good advice and now properly, or more resources to claim good time. Get in now; because have a large deposit in their account. your space in the marketplace faster. otherwise by the time you think it is Whenever you invest in a new idea Without enough money, you might a good time, you could have missed you are taking an educated punt, but feel pressured to go out half-cocked, out.” at least this way you know you are in which is like jumping out of a plane Getting the sort of cash that good company.” then trying to knit a yourself a creates a going concern is all about But you can also get a long way with parachute on the way down. credibility, and Walters reckons this a good idea, because even for bank Brett Walters, head of working is about getting good advice, doing managers these days, it’s not just capital services and asset finance your homework and then following about crunching numbers. for BNZ, has been left to pick up the through on your obligations. “Personally I believe it could be pieces before. Getting good advisors is vital. about 60/40 with 40 percent being “I have seen a couple of these not You may delude yourself that your about the idea,” says Walters. “As go well because they have signed idea is so ‘next gen’ that the old a banker if you get excited about contracts before they are ready,” he folks won’t be hip to it, but getting the idea it will motivate you to push says. “People get a good idea, go to a some grey hair in the boardroom is through the approval processes.” trade show and get some orders, and a must, as experience is everything. But you also need to have done then start trying to work out how to Find people who have successfully your homework. As entrepreneurs fill them, which is never a good idea.” commercialised innovation before. are by nature risk-takers, it can be You want to socialise the idea They know what to do and what a very good idea to team them up and validate it using your startup not to do. Their presence alone will with somebody who does detail and investment money, then start looking make potential investors much more execution, and maybe even leave the for the capital. You might think comfortable than staring at your mad inventor in his lab for as many of the tail end of the worst economic pimply noggin, and comfortable the money meetings as possible. meltdown since hobnail boots were people are more likely to part with Borrowing money means you are fashionable is not the best time to their money. going to go into debt, as a business, go out asking for big bucks to grow “I spoke to a company the other and probably personally. If you are a business. But Walters reckons you day, and the CEO sounded young,” working within a big business you
  • 38. Innovation Guide“Some startups have a ‘the world owes me a living’attitude. I think if you walk in to an investor withthat, you’re going to be shown the door”– Brett WaltersWORKING CAPITAL SERVICES AND ASSET FINANCE, BNZcan be sure any money you burn up They are prepared to wait a couple discipline: people want to keep inwill weigh heavily on your reputation of years before seeing a return, touch with what their money is beingand future prospects. A savvy bank afterwards they will want to know spent on and how things are going.will not let you take ridiculous what the return schedule might be, or “Business in theory is easy; it’s cashamounts, even if you think you have what their exit strategy might be.” in and cash out,” says Walters. “Youjust invented a time-travel device. just have to make sure there is moreWith new business, Walters reckons Once you have cash coming in than going out. Thebanks are tolerant to the odd speed the cash … tricky part is fully understandingwobble in the first couple of years. … the work really begins. Whoever that and making it your focus.” “This is because in the early days, writes the cheque, your relationshipstartups are likely to have a debtor with them is going to be critical If the bucks stopconcentration risk,” he explains. to your success. It’s a relationship If you do crash, it is unlikely to be“Most startups get one client and based on trust and communication. when you completely run out ofstart filling their orders, then start Investors are well aware that ideas money, as it’s not your money anywaylooking for more clients.” people have lots of ideas and may and savvy investors will not let it go If they lose a big client, the wheels move on to a new one at a moment’s that far.nearly fall off. This is less likely if that notice. They need to be sure that “If the numbers are not as promisedclient is a major company as they are when they give you money to develop and there is really no valid reasonmore stable, and the product isn’t product A that you are using it for for that, the plug can be pulled on thefashionable or seasonal, where the that, not to buy a Maserati, or, more business,” says Walters. “If the bankscustomer base could walk at any time. likely, to develop product B, which find that arrangements made have not At this point, when you have the you now think is much better. been met and, despite all the passionidea close to a marketable stage, “Some startups have a ‘the world and drive of the owners, the resultsangel investors are easier to attract. owes me a living’ attitude. I think if are not being shown, it might be allThe hitch is that they may want a you walk in to an investor with that, over. This is always a last resort ”huge chunk of a fledgling business, you’re going to be shown the door,” The good news is the longer youand they want their money back says Walters. stay on the horse, the smoother thesometime in the next five years. If you didn’t have a boss before, ride. “Angel investors are often the you do now. Your job is to fulfil your “It’s a relationship that deepens,”kind of people that can absorb small obligations, do what you say you are says Walters. “The longer it goes onlosses,” says Walters. “It is the idea going to do and keep communicating. and the more trust is developed, theand the person most people invest in. It is a question of professional easier things are.”
  • 39. SPILLING THE BEANS
  • 40. The Idealog Innovation GuideCHAPTER 10SUSTAINABLE U nless you work inINNOVATION: a business that uses roller desks and cartridge pens, you will have noticed thatIS THERE ANY sustainability is more than just a fad invented by people who knit their own yoghurt. Sustainable business really just means doing business inOTHER KIND? a way that means you can keep doing it for the foreseeable future. Another way of looking at it from an innovator’s point of view is that the world’s drive towards sustainability has created one of the biggest new global markets for goods and services. A key driver of innovation will be about adapting to this reality and exploring the opportunities it represents. Sinclair Knight Merz, civil, mechanical, electrical and environmental engineers and consultants, is taking a lead on this, partly because the stuff it makes is so big that everybody would notice if it fell down or made a mess. “If something is not sustainable long-term, the public are going to know about it when their rates for maintenance increase or when their services no longer work properly,” says Sarah Sinclair, SKM’s
  • 41. Innovation Guide sustainability practitioner. “For us, sustainability is about building something that is going to last 30, 50 or 100 years. So you have to look at Resources whether resources you need are going Green thoughts HOW TO FIND WHERE to be readily available throughout to greenbacks THE GRASS IS GREENER that time, whether it is a particular The term ‘lifestyles of Envirostep (www.eco- material like oil for maintaining health and sustainability’ verification.med.govt.nz/ tarmac, or water for cooling, or (Lohas) describes a envirostep) is an online tool specifically skilled staff.” segment of the population to help small businesses As Nike found out to its huge cost identified by market understand, improve during the sweatshop debacle of the research as ‘conscious and communicate their 1990s, if you want to be seen as ethical consumers’. These people environmental performance. all your partners have to be ethical have been shown to express It can also be used by too. This message is not lost on SKM. concern for environmental, larger organisations to “Our innovation and sustainability social and economic justice assess the performance of culture is the basis for our alliances,” partly through purchasing their branches, suppliers says Sinclair. “We look for clients with decisions and their support or members. And check that same culture of thinking outside of socially responsible out www.eco-verification. of the box. We also have procurement businesses. med.govt.nz/envirostep/ tools in place for our suppliers. The They represent an Documentation/ main barrier to sustainability is enormous global market. WebBasedTools for a people thinking that it is just about Research commissioned comprehensive list of environmental sustainability, and by NZTE in 2008 found other similar options. they see it in terms of a cost rather the global Lohas market is than a value. Sometimes just the word worth an estimated $910 is a barrier, but when you actually billion. Other estimates put talk to people, they say, ‘Oh, yeah, its value at US$290 billion we totally believe in all that.’” in the US alone.Instant karma they can earn o it, too. natural raw materials that keepIt’s not easy being green, but not the country working).being green is getting harder too. it is rampant socialism to stop If you are sociopathic enough businesses crapping all over the government and local authorityto think, ‘Forget sustainability, nation’s doorstep. Politicians are procurement people, so if youI don’t care about everybody else, in the business of getting votes, want to sell anything to them,we are going to sell the whole thing and a growing number of the you’re gonna need a lot of greenas soon as it turns a profit,’ you voting public seem remarkably bits of paper (and I don’t meanare increasingly likely to find that keen on keeping their little bit of cash, unless you are readingeverybody else doesn’t care about the planet in some semblance this in Zimbabwe).you or your product. of working order. Politicians’ expert advisors recommend consumers might not care want to see you waste their not letting businesses trash enough to boycott your product money on unsustainable people’s health (because it costs if there is no competition, practices. a fortune in healthcare costs but if the competition is good and lost earnings) or the natural and green they will salve their want to know they can make it environment (because it costs a conscience and shop there run smoothly for a few years so fortune to clear up, and ruins the instead.
  • 42. BAGGING A BARGAIN
  • 43. The Idealog Innovation GuideCHAPTER 11CONCLUSION: basic tools and doing something different with them. The bad news is that somebody who learns how to play all of JimiInnovate, or learn Hendrix’s riffs will not become Jimi Hendrix or sell loads of records.Mandarin. The good news is you don’t have to be Jimi Hendrix to be innovative with a guitar and sell loads of records.It’s your choice And there is a hell of a lot of great innovation happening all the time in all sorts of industries. “Maybe humans have some inherent insecurity about this,” says Main, “but we tend to hear about and champion the ideas that do very well or those that fail spectacularly, when in reality most businesses out there are about some very decent ideas that take many years and a lot of hard work to build that you just don’t hear about.” Mitchell agrees. “There is a lot of innovation going on in the primary I sector,” he says. “But we are also nnovation is pretty much pointed you in the right direction. seeing development in the high-value the only thing that can But DNA’s Grenville Main cautions high-technology manufacturing and prevent New Zealand from we shouldn’t rely on it too much. services sector. There is room for becoming a second-class “Too many people think they significant growth in these areas.” plantation nation eking out can read all about somebody else’s Increasingly, this means a a living as tenant farmers for Chinese success and then simply apply movement away from raw materials corporations. So it’s quite important. that approach and be successful and ‘dumb iron’ into small, smart “Because distance and shipping themselves. technology that can be shipped costs can be a problem for New “Im not so sure. I met a guy the cheaply, sent down a phone line Zealand companies, we, as a nation, other day who was basically trying or made somewhere else. are good at coming up with solutions to apply the thinking behind 42 “It can be harder hard now to find in an economic way,” says Gavin Below vodka to the tech industry, the money to do the innovation,” says Mitchell, commercial manager for and he thought that was the ‘killer Mitchell. “What with earthquakes, Industrial Research Ltd. “We won’t app’. That doesn’t work; you can’t floods and a world economic grow the economy by building low- apply the same thinking to any and slowdown, a lot of companies have value, high-volume equipment. every sector, nor can you throw a gone into ‘possum in the headlights’ “But we can grow the economy dose of Kiwi attitude at everything mode, which is understandable. by developing and manufacturing and expect that’s all it will take to “But, actually, this now is a great the smart components that add value succeed.” time to get out there and do it, and to to those pieces of equipment. It is Those that make it – 42 Below, use innovation to help future-proof our ingenuity that will enable us to Hyperfactory, Orion Health – show a business. It just requires a little bit compete.” you it can be done, but they don’t of intestinal fortitude.” So it’s high time we got on with necessarily show you how you should So, you’ve got the Guide, but have it, and hopefully this guide will have do it. It’s about taking up the same you got the guts?
  • 44. Design ewsDesign obsDesign Heaps idealog.co.nz/design
  • 45. Ideas on the moveSo you have a smokin’ hot idea but you’re not sure how to put the wheels ofbusiness into motion? Wondering about funding opportunities and earlystage investment?Idealog ’s Guide to Innovation has a plethora of answers, covering everythingfrom fostering a culture of innovation through to sustainable business. There’s also plenty of inspiration in the form of case studies of smartfolk who’ve taken an idea right through the process to successfullyimplement it – such as GrabOne’s Shane Bradley; Ian Williams andAnders Warn of WilliamsWarn Personal Brewery; and coffee maestroMichael Allpress. Fill your boots.About the writerAndy Kenworthy is an Auckland-based writer specialising in businessinnovation and sustainability. With his work in Idealog magazine as well as with New Zealand Tradeand Industry and Better by Design, he has spent time with many of the mostinnovative business people in the world. “The reason I am fascinated by these subjects is because I believeinnovation and sustainability to be intrinsically linked,” he says. “Innovation is the means by which businesses will survive and thrivein the increasingly tough conditions we are faced with. If a business is notinnovative and sustainable, it won’t be around for long.”

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