Monday, July 5, 2010

Invention, Innovation and Entrepreneurship

Working with startups I have the good fortune of dealing regularly with highly motivated energetic and imaginative people who feel a drive to change their world. To some the world is the immediate vicinity, to others it is the whole globe, but in all cases they all see themselves destined to make a big difference. Most, not all, hope to be well compensated for their novel contribution and hard work. Even in this specialized group, however, invention, innovation and entrepreneurship are frequently confused. There are standard dictionary definitions of each readily available, but their frequent interplay complicates things. Let's look at how:

Invention (Inv)
An invention is an idea developed by a person, the inventor. To be recognized as such by the US PTO it requires 1. Novelty and 2.Non-obviousness to others skilled in the domain.  Note that there is no reference to usefulness, implementation, results, etc.

Innovation (Inn)
Is the process by which a useful outcome is obtained by a the implementation of either a new idea (an invention) or of an old idea in a new way or under new circumstances.  Note that invention is not  a requirement, but novelty of application, usefulness and most of all implementation are.

Entrepreneurship (Ent)
The activity of an entrepreneur: from its French root it implies starting something, particularly in business, taking risk for the outcome. Only initiative and risk taking a required, however common sense would also recommend a useful purpose that justifies the risk taking.  Neither invention nor innovation are required.  By this definition an entrepreneur could be one who opens a delicatessen selling the same products at the same prices and with the same level of service as the competition. So long as there is excess demand to be met the risk would be compensated by happy customers.  Growing from there would require innovation.

Most founders of startups I run into have some of all of the above. They are risk takers (Ent), they act (Ent) to achieve a useful purpose or meet a need (Inn, Ent) and they do so in a novel way (Inn) sometimes starting from a new idea (Inv), sometimes from a novel reshuffling of an old one (Inn)

With this in mind, some interesting businesses, inventions and entrepreneurs come to mind

Vannevar Bush
Bush in 1945 (yes '45) in an article "As We May Think" in The Atlantic Monthly conceptualized and defined the specifications of a personal information storage, retrieval and sharing machine, the Memex, remarkably similar to a today's  personal computing devices.  Note that he did so before the invention of transistors and ICs that made the digital age possible. Reading the referenced article, you may note that it all depended on photographic data compression.  Today's high density ICs still depend on the same principle, so Bush was correct in his extrapolation of the fundamental technology and only incomplete in the details of the ovolution. This example begs the question of how much do we recognize something as today's innovation only because of short memories.

Zappos is frequently and justly touted as having developed a fanatic level of customer service. It is a correct assessment but only relative to on-line retailing. Anyone who dealt with Nordstrom in Seattle around 1970 (interestingly also a shoe retailer in its beginnings), would instantly recognize the same fanatic commitment to service that built their retailing empire. To wit a story reported by the Seattle papers of a sales clerk running out of Nordstrom to buy from a store next door something a customer wanted but not carried by Nordstrom. Without taking anything away from Zappos this example again begs the question of how much do we recognize something as today's innovation only because of short memories.

Cloud Computing
This new holly grail of the information age is a "whole new concept", invention and innovation only to those that began computing in the desktop PC age (the Computing Mesozoic).  Any remaining survivors, Homo Calculans, of the computing stone age (the Computing Paleozoic) will recall IBM's TSO (Time Sharing Option).  In its day a new concept, TSO promised, and largely delivered, ultra-flexible access to computing resources, centrally managed and backed up, capacity seemlessly reconfigured by the Wizards of Armonk to give us, Homo Calculans, ready access (through monitor-less teletype terminals) to the day's "Software Services" (SaS).  The services included pre-Visicalc/Supercalc/Lotus/Quattro/Excel simulation wonders and other similar wizardry.  Then the Federal Trade Commission mandated the end of SaS and a new age dawned. On the carcass of TSO Honeywell, CDC, Amdhal came to feed.  Eventually they succumbed to more nimble raptors: DEC, WANG, IBM-NASD, Prime, who in turn were hunted into extinction by the micro-raptors Apple, the CP/M herd, the Microsoft/Dell/Clones, IBM-PC/DOS and countless other breeds too small to note. And now the CellPhones and Pads are coming.  Few of the species were adaptable enough to come through the ages: IBM, HP and the endlessly adaptable software-jocks that live parasitic lives on any platform. In the end the logic at the foundation of TSO, like a dominant gene survived to see its day again.

We call all this evolution Innovation and Invention for good reason: in all its forms it is always novelty with purpose.  The  true constant, the DNA of it all, is in the entrepreneurs who have that special gene for taking risks with the purpose of doing something useful, to meet a need.  That will not change.

Marco Messina

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