Almost everyone would agree; once a digital giant like Amazon or a fast-growing start-up like Airbnb has changed the playing field, it is virtually impossible to dislodge their dominance. Digital giants and startups are setting the standards for growth and innovation. The pace at which companies need to adapt and respond to these standards is rapidly accelerating. Decision-making and execution must occur in hours or days rather than weeks and months.
Unfortunately, too many legacy companies are doing things the old way. Making plans once a year, spending too much time and money fixing antiquated platforms, or even taking on a multi-year digital transformation project to catch up. Legacy companies cannot simply replicate the ‘digital natives’ such as Google or Netflix. You can’t play “catch up” to greatness.
So how do you, as a legacy company, compete? Do you launch into digital strategy transformation or is there a faster, better, cheaper way? Yes, there is a way.
Enter The Innovation Marketplace
The new standards in growth and innovation have given rise to an evolving “Innovation Marketplace,”
a virtual bazaar of start-ups, incubators, accelerators, and University IP, all focused on reshaping the paths customers take for solutions. How are companies taking advantage of this Innovation Marketplace? They are identifying, assessing, engaging, and acquiring the start-ups; spinning in new processes and technologies to turn products into platforms and re-shape customer journeys across ecosystems.
This is happening in every industry, reshaping the landscape of players and competitors. The ability to acquire new models in this way has completely changed the timescale for innovation. Those who understand this will reap the benefits for years to come. Make, partner, or buy has never been a more important decision.
The rapid growth of the Innovation Marketplace is due to the enormous difficulty in creating innovation, incremental or disruptive, inside a legacy company. Companies weathered the last major transformation – reengineering – with relative success. But now, even for the most successful company, facing digital strategy transformation is like Superman picking up a Kryptonite pebble in his boot. Translate this into a business metric: 84% of all digital transformations fail.
Disruptive? Not In My House
How do digital giants and start-ups do it? How do they create disruptive innovations and why can’t legacy companies do the same? Think about your average legacy company. They have brand(s), product/service offerings and an infrastructure supported by people, process, and technologies. They are organized for efficiencies around faster, better, cheaper and are inherently resistant to change. The structure can absorb incremental innovation, but once you introduce disruptive innovation; it ‘gums up the works’.
Entrepreneurs who run digital giants and start-ups don’t have legacy constraints. They simply plot out the customer journey; finding the holes, shortcuts, and paths that no one else has seen. Start-up innovation is inherently disruptive as their purpose is to change the playing field. Simply put; much of the difference between legacy companies and start-ups is mostly ‘greenfield’. With no prior infrastructure constraints, they have the ability to move fast; leveraging continuous process and a wide range of technologies to create disruption across the customer journey. There are no rules for them and that is their inherent advantage.
Want proof? Quick Quiz: what company is the magic genie for taking over new markets with blinding speed? Bet you answered Amazon!
What does Amazon’s new market growth strategy look like? See right.
Where do the organizational people, process, and technologies (constraints) live on this chart? Simple answer; they don’t. Amazon starts with a greenfield approach.
But back to legacy companies. Aren’t some of them coming up with ways to create innovation? Yes. A number of industry leaders have set-up an innovation outpost in Silicon Valley. Think of the Core/Edge concept from Nick Vitalari, Innovation Scout Advisor, and his global best-selling book: The Elastic Enterprise. These companies have separated their Core, (legacy brands and supporting infrastructure), and created an Edge, siphoning off some of their best and brightest.
From a parallel perspective; Brad Power, Innovation Scout Advisor, in an article for Harvard Business Review, put it this way: “How can you build your organization’s ability to sense and respond to rapid improvements in technology? Many large, successful companies are creating offices in California’s Silicon Valley. Their purpose; to spot big new trends and learn how they can transform their organization in ways they couldn’t otherwise imagine. It’s no longer good enough to wait for change to come to your industry; you need to be out there where it’s happening. And a lot is happening in Silicon Valley.”
What happens, however, when these legacy companies try to merge the Edge back into the Core? What happens when entrepreneurial process meets corporate organizational structure? Sparks fly – Film at 11:00. Still, if the results end up being spin-offs of new products and platforms, that will be success. A sampling of companies creating an edge in Silicon Valley includes:
- GE. This industrial giant has built up a major presence in Silicon Valley (broadly defined here to include the East Bay) and the company is focusing on building world-class software and integrating it into most of their products and services.
- GM. Like other auto companies that have helped create an emerging transportation ecosystem in Silicon Valley, GM is looking for and developing software-based products for future GM products and searching for appropriate investments and partnerships.
- Target. This and other US retailers have set up shop in Silicon Valley to figure out how to use emerging technologies to tap into the new ways that consumers shop (increasingly online) and to find new analytical tools to predict future consumer behavior.
- ATT. The large communications company has established an ATT Foundry in Palo Alto as a way to accelerate the cycle time for developing new products and services, often in collaboration with corporate or startup partners.
- Wal-Mart. The company’s innovation center and “skunk works”, Wal-Mart Labs, has had a Silicon Valley presence for over a decade and in recent years has expanded its efforts, including acquiring many Silicon Valley startups in technology areas of interest.
- Ford. Ford Silicon Valley Lab was set up in 2013, focusing on big data and open-source programming projects. Recently it increased its presence by opening the Research and Innovation Center Palo Alto to accelerate its development of technologies and experiment
Sourced from Silicon Valley Outputs – By Eilif Trondsen, Ph.D., Chair, Special Interest Group on Entrepreneurship and Learning, Silicon Vikings; and Director, Strategic Business Insights – – see article @ goo.gl/G6uXvd
Having a Silicon Valley outpost as your strategy to unearth relevant startups is an interesting first step. However, just putting yourself in a geography is only part of the answer. Relocating to Silicon Valley aside; it is far more efficient finding innovation within the Innovation Marketplace – home of start-ups, accelerators, and incubators. It is also far more efficient to keep the innovation process close to home. Leveraging both entrepreneurial and legacy skills; spinning-in new technologies to launch smart products, build platforms, and re-shape ecosystems. You also don’t want to miss a good portion of the 1.35 million tech startups that are created each year. We have entered a new phase where great tech startups will be found around the globe in cities like Toronto, Singapore, or Amsterdam. The Marketplace is found everywhere on the planet and that is where you need to look.
So Where Do You Go From Here?
The Innovation Marketplace is literally exploding with new ideas, processes and technologies – becoming too vast and too fast for manual tracking, searches, and legacy R&D processes. Consider those millions of tech startups created each year and the nearly 4500 Universities with labs and incubators. That’s a lot of information to sort through! No human could actually access everything that is going on at this point. This is a perfect opportunity to let artificial intelligence show you the way.
Sorting through all the information and matching your ideas to those who can help is a smart path forward. AI & Machine Learning technologies enable the identification of disruptive resources at the speed of innovation. Our Innovation Scout™ is a SaaS platform that uses AI, Machine Learning, Big Data, and a plain language interface to find, assess, and engage with just the right start-ups. It’s your radar to relevant innovations around the world.
In the old days, you had to get in the car and go from store to store to find the best price. Then along came Amazon – a faster, more efficient way to shop. Today, companies are spending time at events, running local hackathons, and working with expensive consultants. The Innovation Scout removes that hassle and let’s machine learning help you to find better partners and new technologies. This is not a once-a-year effort! With a million plus tech startups launching each year, you need a continuous scouting activity; a smart radar that is always looking for the important new innovations that will change your growth trajectory.
Once you find a relevant set of startups, research or organizations that could get you to a solution, you will want to follow a process to fast-track an offering. First, do a detailed rating and ranking of each against a set of well-defined criteria. This effort will focus the list and net out a preliminary group that you and your team will want to hear from directly. A ‘pitch competition’ is often a next step. Usually a one day event, it serves to align the startups, get your team energized and begins an important relationship with the ‘winners’. From there you will make a final decision on which company or research IP gets you where you need to go. The next step pilot program should be outlined with well-defined success metrics and project deliverables.
This method of fast-tracking a new product or service is at the core of what The Innovation Scout provides to our clients. Often it’s more cost efficient to use a partner like The Innovation Scout to run the fast track process while your executive team continues with focus on the day-to-day. The executive team can participate at each step of the way in an efficient manner.
One last idea; engaging with the Innovation Marketplace is about more than simply identifying Start-ups, University IP, Accelerators, and Incubators. It’s about internal education around what is happening in the drive to meet the customer’s ever-expanding expectations. It’s about analysis around why it’s happening (who and what is driving the expanding expectations) and, it’s about Top-Down & Bottom-up ideation on what you can do to ‘shape’ these expectations.
It’s time to consider a new engine for growth: working with startups and digital leaders. The Innovation Scout offers programs to help you define the most pressing problems as well as “Fast Track” your way to working prototypes.The Innovation Scout will help you to find the best innovation for growth by finding relevant startup partners, assessing them, and moving to market to get answers much more quickly.
Our mission is to get your enterprise on a better course to compete now and in the future. Working with startups that are already breaking new ground with your customers is the fastest, least risky way to get there. Shopping at the “Marketplace for Innovation” is your quickest way to accelerate growth, creating possibilities to re-shape your future.Contact us to find out how we can help your organization leverage the Innovation Marketplace to work smarter and faster, meeting the challenges that digital giants and startups are now bringing to your marketplace.
About The Authors
Michael Glavich, Chief Business Accelerator & Change Catalyst for The Innovation Scout. Michael delivers a unique combination of digital strategy, marketing, and whole-product development that seeks to “change the playing field”, creating unique and unbeatable competitive advantage. His background includes business acceleration consulting at Diamond Technology, Index and most recently Maxos.ai; a combination start-up factory and global think-tank. He has spent a lifetime creating innovative new ways to grow successful businesses and representing the thought-leadership service offerings from ten of the top fifty living business thinkers in the world.
Annette Tonti, CEO & Co-Founder, The Innovation Scout. She is an executive with over 30 years of corporate and entrepreneurial experience. As founder and CEO of 3 high-tech startups, she has developed early stage businesses and raised over $30M from Venture and Angel investors. Early in her career she delivered digital strategies to Fortune 1000 businesses, ran a global program for the MIT Media Labs and headed up operations for a global telecommunications consultancy.