Do we see a shift in innovation power? From Start-up to Corporate innovation
The dotcom era, 20+ years back, fueled a new wave of innovation with people and start-ups that turned the world upside down and created a new generation of companies. A lot of them that have now become behemoths and centers of gravity for the NEXT BIG THING. That also created the perception that only innovation could be done from Start-ups and only Start-ups knew how to innovate. But how true is really that? Today!
We tend to think of innovation as a single event, a spark that create the fire, but the truth is that the road to any significant innovation is a path of failures. In the Exponential View podcast by Azheem Ashar, he inverviewed Astro Teller who shared some great insights in the number of projects they looked at (more than 2000 that have been rejected and put to rest), to be able to find “that one jewel in the crown”. That´s a lot of ideas for sure. That´s 2000 start-ups that failed. And once you´ve made those discoveries they must be engineered into useful solutions, products, services, and finally meet the demand of the customers. Scale is really the key here. Perhaps that is also why the big ones (Google, Amazon, Facebook, Apple) are leading the race of innovation and not start-ups so much. Spotify can´t hardly be seen as a start-up anymore, and they are one of the innovators in the music industry.
Last year Google´s parent company spent 23 billion U.S. dollars on R&D, Microsoft 16.9 Billion U.S. dollars. So question is; ”do we see a shift here?”. A shift where the power of innovation has moved from the Start-up scene to the corporate incubators and intrapreneur hubs. When the expectations from innovation has gone from generating incremental, to deliver exponential results, 10% improvement is not enough to stay competitive and avoid disruption. X is the dominant factor in evaluating the outcome of innovation. Just looking that the industry I´m in right now (Telecom). In December 2019 Apple announced that a secret team has started to work on satellites to beam data to devices. The team is led by Michael Trela and John Fenwick, former aerospace engineers who helped lead satellite imaging company Skybox Imaging before it sold to Google in 2014. Amazon is investing to deploy more than 3000 satellites as part of a future constellation. Google have their own “Loon project” and just signed a partnership working with AT&T to offer a global connectivity solution in times of disaster. We´re talking big corporations innovating in an area that is far from iPhones, selling books online or optimizing internet search. The threat is not from start-up firms with cutting edge technologies but from big companies flexing their innovation muscle.
I think we will see more “break-outs”, and spin offs´than acquisitions going forward. More ideas will start in larger corporations and be spun out into separate businesses than completely VC-funded start-ups being acquired by larger corporations. However, there is no “one size fits all”, right? Every company innovates differently and with a unique expectation of the outcome. Apple has an obsessive focus on design and customer brand, IBM commit to a deeper scientific research and engineering, Google on solving the world’s biggest challenges, and by doing that, wishing to capitalize on the next big thing. One thing is clear, it will be very interesting to follow this pattern and shift of innovation in the future.
Let´s keep an eye on this trend and see where it take us!
Theo
#innovation #nextbigthing #research #startup
