In 2021, mobile operators worldwide generated USD 1.08 trillion in revenue. This staggering revenue is expected to grow further by USD 100 billion by 2025. Does it mean that Starlink, a satellite internet constellation operated by SpaceX, is a winning idea? Well, being a pioneer, why did Motorola’s Iridium redefining mobile telecommunication, rolled out in 1988, become a complete flop? On the other hand, a 5MB hard drive weighing 1 ton has grown as a winning idea. Similarly, although Kodak managers could not envision the possibility of poor-quality image producing expensive and bulky digital cameras demonstrated in 1974 as a great idea, it has become a winning idea for Sony. On the other hand, Japanese and American firms and scientists termed the exploitation of 13.5 nm extreme ultraviolet (EUV) not a good idea for silicon processing; but Dutch ASML has turned it into a winning idea.
There are many examples of winning ideas that were rejected by many, including idea producers. For example, upon the invention, Xerox rejected the potential of graphical user interface (GUI)-based computers. Similarly, upon seeing the demonstration, American companies like Texas Instruments and RCA did not pursue the Transistor Radio idea. But by picking up GUI from Xerox’s junkyard, Apple created miracle Innovation success. On the other hand, Sony picked up the idea of Transistor radio and created an innovative role model worldwide. Such reality raises an obvious question about how to generate, know and pursue them.
How to generate winning Ideas
Often winning ideas generate as grassroots innovations due to the compelling urge of finding a better alternative to Getting jobs done. As opposed to professional innovators, lead users generate these ideas. Sometimes, a deliberate mission of finding better alternatives leads to generating winning ideas. The emergence of new technology core also leads to ideas of reinvention of existing products. Besides, accidental observation also encounters winning ideas. Growth of innovation and underlying technology core also keeps opportunities for innovating market segment-specific ideas. Hence, there are five major means of generating winning ideas. These are (i) grassroots innovation by lead users, (ii) deliberate mission of finding alternatives, (iii) emerging technology core triggers reinvention, (iv) accidental observations, and (v) market segment-specific products.
Examples of winning ideas
For example, in 1787, Levi Hutchins invented the idea of an alarm clock for his urgency of waking up at 4 am. With his intuitive ideas and Craftsmanship skills, we shaped metal pieces and arranged them in a certain way to bell the ring just at 4 am. Like an alarm clock, many winning ideas emerged as grassroots innovations, developed by lead users. Unlike Levi Hutchins, Scientists at Bell Labs were on a deliberate mission of generating an idea of a solid-state switch to overcome the limitations of telephone switches.
The emergence of technology cores triggers innovators’ minds to start experimenting with ideas of reinventing existing products. For example, the invention of the transistor led to ideas of reinventing the computer, the radio, television, and many more. Similarly, the invention of a charge-coupled device (CCD) led to the idea of the reinvention of the camera as a digital one. On the other hand, a great winning idea microwave oven emerged as an accidental observation in 1945, while Percy Spencer was working in a microwave laboratory for RADAR. Like a few others, the idea of Radio communication, electric motor, and X-ray also emerged as accidental observations.
How to know and pursue winning ideas
Upon encountering ideas, how to figure out whether they are winning ideas or not is a great challenge. Hence, management experts have come up with guidelines. One of the popular ones comprises three filtering tools: (i) the Utility map, (ii) the price corridor of the mass, and (iii) the business model guide. As explained by Chan Kim and Benee Mauborgne, the buyer utility map is a six-by-six matrix, having 36 spaces. Columns are purchase experience, delivery, use, supplements, maintenance, and disposal; and rows are customer productivity, simplicity, convenience, risk, fun image, and environmental friendliness.
Despite the merit, often, these tools fail to filter out winning ideas. One of the underlying reasons has been that invariably all winning ideas emerge in primitive form. In the beginning, more or less, none of them qualify strongly in reference to the utility matrix. Of course, they show up with some uniqueness in creating significant utility. Besides, the viable business model keeps emerging with the growth of the technology core and the evolution of products. For example, CCD, LCD, transistor, steam engine, internal combustion engine, mobile phones, and many other winning ideas emerged in embryonic form. In the beginning, their potential remained latent, creating pervasive uncertainties.
Furthermore, the business model for extracting value out of them also remains very unclear. For example, who knew in the 1970s that smartphones would be the largest market for electronic image sensors? Hence, filtering out winning ideas is a daunting challenge. Furthermore, the growth of embryonic ideas as winning ones depends on how they are being pursued.
Winning ideas should be scalable
As explained, invariably, all technological winning ideas emerged in primitive form. In the beginning, only a small group, a few or only one, find value in such ideas. For example, Levi Hutchins was the only user of his idea of the alarm clock. Similarly, Raytheon found only a few restaurants as the customer of its 790 lb microwave oven consuming 3kw energy, priced at $5,000 in 1947. Hence, scalability determines the future of winning ideas.
But how to gain scalability is a daunting challenge. Decreasing the price does not profitably increase the revenue. In reality, the commercialization of all winning ideas begins the journey at loss. Hence, conventional management theories fail to shed light on how to pursue winning ideas. The core challenge has been in creating a Flow of Ideas to keep increasing the quality and reducing the cost. As a result, R&D costs will keep increasing. But as the marginal cost of replication of ideas is negligible, winning ideas have the chance of decreasing cost and increasing volume at a minimum efficient scale. Furthermore, for winning ideas, innovators should also keep pursuing ideas for gaining Economies of Scope and externality benefits. Hence, at the core of winning ideas is the role of technology progression and its leveraging.
Technology core should be amenable to progression
Amenability to the progression of the technology core is a key requirement for winning ideas. For example, Personal Computer has become a winning idea because of the amenability of progression of the silicon chip. R&D must succeed in creating a flow of ideas in making the technology increasingly better and cheaper. Otherwise, any apparent great idea will get stuck turning investment wasteful, let alone being a winning idea. For example, fuel cell-based electric vehicles emerged in the early 1990s as a great idea. But it failed to be a winning idea, as technology core did not show amenability. On the other hand, lithium-ion battery-based electric vehicle is showing the possibility to be a winning idea. But to make the battery increasingly better and cheaper, innovators are after scientific discoveries for creating the flow of ideas. Hence, management wisdom without support from the underlying technology core does not create winning ideas.
For ferreting out value from the market from winning ideas, innovators must succeed in the sustaining innovation race. Due to unfolding profitable business opportunities, competition responds with replication, imitation, and innovation. Hence, upon the release, innovations start suffering from eroding willingness to pay. Therefore, innovators must keep releasing successive better versions. Instead of relying on legal measures to profit from winning ideas, management should focus on creating the flow of ideas for releasing successive better versions to profit from winning ideas.
Fueling creative destruction-causing Disruptive innovation effect
Invariably, all winning ideas face the barrier of substitution, often, from matured products. For example, the internal combustion engine is a substitution barrier for the electric vehicle. Similarly, keyboard-centric smartphone design was a barrier to iPhone. Hence, all great ideas to be winning ones need to grow as a creative wave of destruction to existing matured alternatives. In certain cases, new entrants pursue a creative wave of destruction; and incumbent ones fail to make timely switching. As a result, due to the uprising of winning ideas as Creative waves of destruction, incumbents suffer from the disruptive innovation effects.
Progressive exploitation and outperforming competing for emerging options
Often, winning ideas begin the journey of serving small market segments, unserved by the existing mature innovations. For example, vacuumed tube-based radio was not suitable for enjoying music at neighborhood hangout places. Similarly, the film-based camera was not suitable for satellite imaging. Similarly, the minicomputer did not serve the purpose of small office computing. But due to technology progression, their humble beginning starts gaining quality, often at decreasing cost, resulting in serving increasingly more complex tasks. For example, LCD appeared as seven segment display of watches. But due to continued progression, it started becoming the preferred display for feature phones, smartphones, PCs, TVs, and many more. Furthermore, often, multiple technologies compete to take over existing matured innovations. For example, LCD and plasma were competing to fuel the creative destruction wave to CRT. Although Plasma showed an early lead, LCD succeeded to be a winning one.
Winning through monopolization
In the end, the race of turning great ideas into winning ones leads to monopolization of the market. It happens due to the amenability of the progression of the underlying technology core in making innovations better and cheaper, and increasing Economies of Scale effect. Hence, the competition race on exploiting this possibility leads to price setting capability and very high minimum efficient scale (MES). Due to the growing role of software and connectivity, successive reinvention waves have been experiencing increasing MES. As a result, contemporary winning ideas are ending up in creating a winner takes all reality.
As winning ideas emerge in primitive form, generating loss-making revenue, conventional management theories run the risk of failing to detect them. Their winning success depends on the underlying technology core. Hence, linking the latent potential of the technology core with innovation possibility forms the core of detecting likely winning ideas. Furthermore, turning embryonic great ideas into winning ones demand strong insights into underlying science and technology and the capability of dealing with the competition race for monopolizing the market.