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Start Innovating Already: 13 Poisons to Open Innovation


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An somewhat irreverant intro to Open Innovation for advanced beginners. The presentation discusses 13 poisons (and their antidotes) to Open Innovation.

Companies covered include AirBNB, Best Buy, LudoBites,Netflix, NPR, Starbucks, Saatchi & Saatchi, RelayRides and Threadless.

Published in: Business, Technology
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Start Innovating Already: 13 Poisons to Open Innovation

  1. 1. Start Innovating Already.A Punk View of 13 Poisons to Open Innovation& Building Engaged Communities <br />Lisa ThorellRutgers University PDS - Keynote Address, June 7, 2011<br />Off the Grid PR<br />
  2. 2. Build It All Yourself<br />1<br />POISON<br />Source: © Henry Chesbrough, 2006<br />Slow time to market High Fixed Costs Closed Pool of Talent<br />
  3. 3. That model arose in the early 1900s.<br />Concerns of the day were…<br /> Economies of scale – Coordinating large numbers of people – Limit Liability<br />
  4. 4. Today we buy in more quickly…<br />
  5. 5. We throw out more quickly…<br />18<br /> Months from purchase to discard of a cell phone for a person living in the US or UK.<br /> Months from purchase to discard for a cell phone user in Japan.<br /> The number of iPods you would own if you upgraded to every new iPod that had come onto the market from 2001 to 2009.<br />12<br />18<br />Source: Rachel Botsman & Roo Rogers book ‘What’s Mine Is Yours: How collaborative consumption is changing the way we live (2011)<br />
  6. 6. Creating 100 gigapascals of pressure<br />Source:<br />_Survey_results_2706Nov 2010<br />
  7. 7. Also rocking our world…<br />Source: McKinsey Quarterly Riding Asia’s Digital Tigers<br />
  8. 8. Rocking it still more: Hyper Innovation<br />Source: Adrian Ott, The 24-Hour Customer: New Rules for Winning in a Time-Starved Always-Connected Economy<br />
  9. 9. What’s a way to go faster?<br />Take in more ideas from outside?<br />Spin out ideas for others to use?<br />Solution: Punch more holes in the funnel.<br />
  10. 10. Open Innovation<br />ANTIDOTE<br />Source: © Henry Chesbrough, 2006<br />
  11. 11. Get to Market Faster<br />
  12. 12. Break into Partner Markets<br />
  13. 13. Transfer risk to someone else<br />
  14. 14. Make your customers crazy-scream with rage… <br />…If they can’t get your product. <br />
  15. 15. Employees as Lifeblood<br />2<br />POISON<br /> Expensive fixed assets Salary independent of performance<br />
  16. 16. As Bill Joy said,<br />“There are always more smart people outside your company than inside it.”<br /> Bill Joy,<br /> Founder, Sun Microsystems<br /> Partner, Kleiner Perkins<br />
  17. 17. Crowdsourcing:Lifeblood on steroids<br />ANTIDOTE<br />Example: Netflix $1 Million Challenge<br />Pay only on Performance<br />Off the Grid PR<br />
  18. 18. Crowdsourcing:Netflix $1 M Challenge<br />ANTIDOTE<br />Netflix $1 Million Challenge<br />55,000 Engineers Enter<br />A huge virtual workforce Decrease HR costs: Talent finds you!<br />
  19. 19. Crowdsourcing:Netflix $1 M Challenge<br />ANTIDOTE<br />Movie Recommendation Engine<br /> Improved 10%<br />Problem Solved: 5 2 years <br />Decrease Time to Market<br />
  20. 20. 3<br />The Human Resources Department<br />
  21. 21. Hire People HR would Never Hire<br />ANTIDOTE<br />
  22. 22. People HR would Never Hire<br />ANTIDOTE<br />1760 A self-educated clock maker invents longitude<br />1990’s Design firm Ideo creates up the best-selling kid’s toothbrush by working with anthropologists<br /> A home-schooled coder invents WikiLeaks<br /> 2007 An oil-industry outsider provides the solution for cleaning up oil spills borrowing from the concrete industry<br />.<br />.<br />
  23. 23. Diversity + Will-to-Win Trump Superstars<br />ANTIDOTE<br />Off the Grid PR<br />
  24. 24. Trad Market Research<br />4<br />Interviews<br />Secondary<br />Research<br />Roundtables<br />Focus Groups<br />Surveys<br />Great…brilliant clarity on the past Usually company internal<br />Budget-constrained sample size<br />
  25. 25. Customer Crowdsourcing<br />ANTIDOTE<br />Up-to-minute 24 x 7 customer feedback<br />Community vetted<br />Social Proof of <br />Open Brand<br />MyStarbucksidea<br />Build it? No!<br />
  26. 26. Customer Crowdsourcing<br />ANTIDOTE<br /><ul><li>Over 100,000 ideas
  27. 27. 100 ideas launched
  28. 28. Note Starbucks did not</li></ul> build this. They license the platform from<br />MyStarbucksidea<br />Build it? No!<br />
  29. 29. Profitability<br />Animate with Annual Report, Investors, SEC sliding up under NI.<br />You own a company thatsells a product, like tee-shirts<br />5<br /><ul><li>Limits Shape-Shifting
  30. 30. Makes C-levels risk-averse</li></li></ul><li>You run a community thathappens to sell tee-shirts<br />ANTIDOTE<br />Decrease<br />Time to Market<br />Source:<br />
  31. 31. Share Community II(The Sequel)<br />Play your community forward (new markets)<br />ANTIDOTE<br />Advertise<br />Advertise<br />Dell laptops – Havaianas flipflops– Griffin iPhone accessories<br />
  32. 32. Your BalkanizedWeb 1.0 Website 1.0)<br />6<br />You control. You make your customers come to you.<br />
  33. 33. Problem: In 2008 the average public radio station listener visited their local radio station website only 2x per month.<br />Source:<br />
  34. 34. Different NPR Customers needed <br />Different news formats<br />Differentplatforms<br />
  35. 35. GiveItAway GiveItAwayGiveItAway Now <br />NPR Content For Free<br /><ul><li>400,000 new stories
  36. 36. 500,000 audio files
  37. 37. 30,000 blog posts
  38. 38. Content from dozens of NPR station affiliates</li></ul>ANTIDOTE<br />
  39. 39. An Open API for Developers to Access<br />Result: more formats, more platforms<br />
  40. 40. Source:<br />
  41. 41. Business as Usual<br />7<br />7<br />Own the facility<br />Build out a kitchen<br />Operate set hours<br />Serve familiar food<br />Charge as much as the market will bear.<br />Advertise in newspapers and radio<br />Off the Grid PR<br />
  42. 42. Business Unusual: LudoBites<br />Restaurant/ Kitchen<br />Operate Std<br />Business Hrs.<br />Charge<br />Market Prices<br />Serve Familiar<br />Food<br />Advertise<br />Borrow <br />Someone<br />Else’s<br />Kitchen<br />Announce by Surprise +<br />Limited opening<br />Pay Forward<br />Savings<br />Serve One-of-a-Kind<br />Food<br />Use<br />Social Media<br />Chef Ludo’s famous<br />Cheese CupCake<br />
  43. 43. TheEconolapse<br />“The main reason to thinkoutside the boxis there is no more oxygen leftinside the box.”.<br />Lisa Thorell<br />
  44. 44. You need to own it to sell it.<br />8<br />Under-utilized assets Sitting inventory<br />
  45. 45. The The New Share Economy<br />ANTIDOTE<br />You broker others’ owned spaces.<br />
  46. 46. Better than Zipcar…<br />ANTIDOTE<br />Example companies how they do it.<br />You can broker others’ under-used cars.<br />
  47. 47. ANTIDOTE<br />Example companies how they do it.<br />Saatchi & Saatchi showed you can even broker ad space in<br /> Out-of-the-Office email auto-replies.<br />
  48. 48. ANTIDOTE<br />Example companies how they do it.<br />To cost-share its rent fees, Best Buy is offering shelf space to other retailers.<br />
  49. 49. IP Control & Lawyers<br />9<br />
  50. 50.
  51. 51. Strategically Mine Knowledge<br />ANTIDOTE<br />Source:<br />
  52. 52. Netflix again…<br />ANTIDOTE<br />Database Shared<br />Solution<br />Gained<br />Solution Shared<br />
  53. 53. ToToxic Boxes<br />10<br />Net Income<br />Sales<br />Revenue<br />Taxes<br />Operating Expenses<br />Cost of Sales<br />Regarding your industry cost structure as immutable & unassailable.<br />
  54. 54. The monsters who guard the Net Income box<br />It’s not that I’m against<br /> fiduciary responsibility.<br /> It’s the fear of <br /> shape-shifting and<br /> risk aversion that the <br />monsters can engender.<br />Net income can be<br />Increased by paying<br />attention to <br />other boxes…<br />Annual Report<br />SEC<br />Investors<br />Net Income<br />
  55. 55. Exploring NonToxic Boxes:<br /> Service Blueprinting <br />ANTIDOTE<br /><br />
  56. 56. Business is serious stuff…<br />11<br />
  57. 57. Gartner Forecasts 50% of Businesses will Gamify by 2015<br />ANTIDOTE<br />Use of leaderboards to inspire frequent use & competence-by-competition.<br />Reward points that can be converted to product upgrades or discounts .<br />Badges for frequent contributions, levels achieved, other milestones.<br />
  58. 58. How Many Prizes did Netflix Give away?<br />ANTIDOTE<br /><br />
  59. 59. The Excruciating Politeness of Poser Innovation<br />12<br />Observation: OI consultants tend to PR their best client case studies.<br />Open<br />Innovation<br />Whitewashing -><br />
  60. 60. A Wikileaks for Open InnovationCase Studies?<br />ANTIDOTE<br />How can we learn if we can’t see<br /> the parallel universe of failures?<br />
  61. 61. Open Innovation as a “Try on”<br />13<br />No. Do or do not. <br /> There is no try.<br />
  62. 62. Open Innovation as a Necessity<br />ANTIDOTE<br />If they didn’t...<br />LudoBites<br />P+G Connect<br />+ develop<br />NPR<br />Threadless<br />Another high-overhead restaurant in a<br />recessionary economy.<br />More small agile CPG competitors<br />96% of listeners would not access online.<br />Another commodity tee-shirt company<br />
  63. 63. Transformers ask…<br />What can you build for others? <br />Whose products/tech can you build on?<br />Find New Markets<br />Customers saying “Meh…”<br />How do you get closer to your community?<br />What assets do<br />you have to barter?<br />Decrease<br />Time to Market<br />What can you give away for others to build on?<br />How do you motivate them to become addicted to your product?<br />Decrease<br />Fixed Costs<br />Whose products/tech/space/people can you partner with?<br />
  64. 64. Moral of the story:<br />Stomp on poisonous snakes.<br />Transform.<br />Start Innovating Already…<br />Off the Grid PR<br />