Profiting from ideas has been a great challenge. On the one hand, great ideas start the journey at loss. On the other hand, Apple and many others are showing magical performance in profiting from ideas. Does it mean that profiting from ideas is a magical act–only creative genius can succeed. Surprisingly, the answer is No. Instead of pursuing great new ideas creating a Eureka moment, profiting from ideas demand releasing ideas to empower old ideas of others–for helping customers to get their jobs done better. In fact, in profit-making, innovators succeed from the ideas of others.
Innovators succeed from the ideas of others—does it sound odd? Innovation is about creativity for reaching the Eureka moment. It’s about generating ideas of completely new products, protecting them, and rolling out them for producing profitable revenue. However, instead of idea originators, in the competitive market, often follow up innovators succeed from ideas of others. Is it due to the weakness of intellectual property laws and their enforcement? Unfortunately, No. In fact, invariably, great ideas emerge in primitive form. Commercialization of them begins the journey at a loss. Hence, great ideas have a history of failing to deliver economic value to the innovators—particularly in the early days. On the other hand, high-performing innovators like Steve Jobs have a history of showing magical performance in profiting from the ideas of others.
The journey of keep making existing ideas to serve purposes increasingly better appears to be the reality of creating innovation success stories. Of course, it requires additional ideas and new technologies to implement them. Furthermore, it requires the release of additional ideas in synchronization with (i) technology, (ii) infrastructure, (iii) competition, and (iv) customer preferences for systematically ferreting out value from the market through great ideas of others.
Innovations and the global economy in perspectives—history of innovators’ success from ideas of others
In the global $90 trillion economies, the roles of some of the ideas are remarkable. In fact, these ideas are major sources of economic output, corporate profits, and shareholders’ value. For example, Carl Benz’s idea of the internal combustion engine-based automobile industry generated $4 trillion in revenue in 2019. The petroleum industry to fuel a fleet of 2 billion automobiles generated another $3 trillion revenue. Besides, the idea of cell phone produces is another source of significant economic value. According to GSMA’s estimate, in 2019, mobile technologies and services generated $4.1 trillion of economic value-added. Furthermore, Mobile handset alone produced $400 billion in revenue in 2019. Similarly, electric lighting produces close to $100 billion.
As a matter of fact, most of the $90 trillion global GDP has been distilling from the commercialization of great ideas—invented decades ago. Ironically, invariably, all those great ideas emerged in primitive form. And in the early days, none of them produced profitable revenue.
For example, in the early days, Carl Benz did not succeed in producing profitable revenue out of his automobile idea. Similarly, the Wright Brothers’ idea of the airplane was of no use—let alone producing profitable revenue for the innovators. The list goes on. Even cell phones took more than 70 years to reach the potential of generating profitable revenue. As a matter of fact, after a huge buzz, Thomas Alpha Edison found his great idea of gramophone was a loss-making proposition. Hence, he kept it on the shelf for a decade before pursuing commercialization. Even in 1994, IBM found its idea of a smartphone a loss-making product. However, each of those ideas succeeded in producing large profitable businesses. Ironically, original innovators did not see the success and rip the benefit. Instead, followers became successful from those ideas.
Getting jobs done and Design Thinking—managing portfolio of ideas
The core of innovation success is innovating products or improving existing products to better serve consumers’ purposes. Unfortunately, invariably all great ideas for this purpose emerge in primitive form. For example, the idea of typewriters emerged in primitive form in 1714. Often there has been a large time gap between the origination of initial ideas and their commercial release. In fact, the time gap between the release of the first patent of the typewriter and its first commercial release is as high as 150 years. Even at the beginning of the commercial release, they start producing loss-making revenue.
To turn initial ideas into a profit-making business, there is a need to produce additional ideas for adding new features and improving existing features. Hence, there is a need for a portfolio of ideas for profiting from the initial idea. Perpetually, it has been found that follow-up innovators keep producing and releasing those ideas in the market for extracting value from the market.
For developing the idea portfolio for systematically ferreting out value, the focus should be on Design Thinking. The empathetic investigation of how to empower target customers to get the job done better keeps producing ideas for improving the innovations. Successful innovators keep focusing on this approach of improving existing great innovations through complementary ideas. Of course, they focus on acquiring technology and organizational capability, and complementary capacities to implement those additional ideas. They also carefully monitor the unfolding of competition, infrastructure, and customer preference for detecting appropriate time slots, customer segment, and geography for releasing those additional ideas for ferreting out value from the market.
By adding new nodes of features, follow-up innovators succeed from ideas of others
In the journey of adding more features for expanding the market of an existing product, one of the strategies has been to keep adding new nodes of innovation. For example, the mobile phone has been growing, serving increasingly additional purposes. The addition of a new node for serving an additional purpose opens the window of adding and fine-tuning features around that new node. For instance, the mobile phone did not have a camera module in the 1990s. This module’s addition empowered mobile phones to serve a new purpose—to capture and share images. In fact, this camera module has grown as a hot nucleus of adding and refining innovative features. Similarly, in the beginning, the automobile did not have an entertainment module. Neither did it have an air-conditioning or navigation module. Besides, the addition of an autonomous driving module will likely open a new era of the innovation race.
Redesigning for improving and replacing existing features through a change of technology core is a strategy for Innovators to succeed from the ideas of others
Changing the technology core of existing features is an important strategic area for innovators to succeed from the ideas of others. There has been a growing opportunity of replacing mechanical components with electro-mechanical and electronics. The replacement of electronics with software opens further opportunities. Besides, the addition of connectivity for empowering machines to collaborate and connect with humans takes the innovation opportunity to a further height. One of the notable examples of the transformation of innovation from mechanical to connected software space has been word-processing.
Innovators succeed from ideas of others with the ideas of reducing human roles of using great ideas
Invariably, every great idea needs a human role in using them to get jobs done. However, human beings prefer to reduce such roles as much as possible. For example, we would like to reduce our role in using automobiles or cleaning machines. Hence, it has been a great area for generating ideas for making initial ideas increasingly more useful. In fact, observations indicate that follow-up innovators focus on those ideas that keep reducing the human role. For this reason, it has been far easier to drive automobiles or mobile phones. Particularly, sensors, software, actuators, and connectivity technologies make it increasingly commercially viable to roll out ideas for reducing human roles in using innovations.
Redesign for manufacturing offers the opportunity to follow up innovators
Every great innovation, whether toaster or elevator, needs production processes to produce them. The production technique influences both the quality and cost of innovation. Hence, this is an area of opportunity for innovators to profit from the ideas of others. The redesign of existing innovations for making them easier to produce with fewer defects and cost is an opportunity to generate ideas to profit from the production of others’ ideas. Apart from it, ideas of the redesign of delegating and the process to delegate increasing roles of making from human to machine are also an opportunity for innovators to succeed from others’ ideas. As a matter of fact, this has been at the core of increasing automation and robotics roles in production. Furthermore, in the absence of a strong focus on it, even no great Product innovation succeeds to produce profitable revenue.
Change of focus for profiting from ideas
Although fostering innovation, particularly among students, focuses on out-of-the-box ideas, the mainstream profit-making opportunity out of innovations is about improving others’ ideas. There is no denying that the idea of innovating remarkably different products sounds very interesting. It also creates a Eureka moment. However, even we succeed with the generation of such ideas, the journey of profiting it is often a very long one. On the other hand, Steve Jobs or Bill Gates have shown magical performance by improving others’ ideas—of course, by adding more ideas around new technology cores. Therefore, we should have a more pragmatic understanding of what it takes to profit from ideas. In addition to chasing wild ideas, we should also meticulously focus on profiting from others’ ideas by adding more ideas to them.