Can the Wisdom of Crowds Help Solve the Refugee Crisis in Europe?

Posted on October 10, 2015 by Eugene Ivanov

(A longer version of this piece originally appeared on the Qmarkets blog)

The refugee crisis that keeps timagesormenting Europe, as serious as it is, has two additional troubling features. First, despite the fact that the humanitarian situation in the Middle East has been worsening for quite some time, the current crisis came seemingly out of the blue. Second, there is no doubt that it won’t be miraculously resolved anytime soon.

Now, governments across Europe have to deal with the cost and logistical nightmare of settling hundreds of thousands of migrants. All that amidst difficult economic situation in many European countries; all that while facing a sizeable opposition at home from citizens concerned about financial and demographic consequences of accepting so many people of different religious and cultural backgrounds.

And as if this wasn’t enough, European leaders must also begin a search for a long-term solution to the crisis. An intrinsic part of this solution should be creating a system capable of reliably predicting when and where the next humanitarian disaster will take place.

Can politicians and experts alone make this happen? Not likely, given the scope of the problem and the urgency of the required response. It’s therefore time for European governments to turn to another source of wisdom: the wisdom of crowds. A framework must be created to systematically use crowdsourcing to look for solutions to the refugee crises, the current and the future.

Two forms of crowdsourcing approaches seem particularly relevant in this context. The first is the so-called prediction markets, the stock-exchange-like platforms aimed at predicting the probability of events by assigning a market value to each prediction. Corporations are using such platforms to forecast success rates of future products and estimate sales volumes. Similar prediction market can be created to monitor the humanitarian situation around the globe (including the Middle East) assessing the probability of a refugee crisis in any country of concern at any given point of time. Software for running and managing prediction markets is already commercially available.

Another approach would be using the wisdom of crowds to come up with long-term solutions to the refugee crisis. European citizens should be invited to contribute their ideas on every aspect of dealing with the massive inflow migrants from non-European countries, including country quotas for refugee redistribution, final destinations for arriving migrants and on-the-ground logistics of settling and assimilating the newcomers. Again, idea management software exists to allow collecting useful ideas, building upon them and then presenting them for a vote to identify the ones with the highest public support.

Admittedly, using crowdsourcing to solve complex socioeconomic problems, in a rapid and effective way, is not easy: one has only to remember the largely unsuccessful BP’s oil spill crowdsourcing campaign to deal with the consequences of the 2010 Gulf of Mexico disaster. Yet, examples of skillful application of crowdsourcing to solving the world’s most pressing problems, such as the Ebola outbreak, also exist. There is therefore every reason to believe that if applied properly, crowdsourcing will help solve the refugee crisis in Europe too.

Image credit: independent.co.uk

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Do Corporate Accelerators Create Real Value?

Posted on October 7, 2015 by Eugene Ivanov

(imagesThis post first appeared on the Front End of Innovation Blog)

Corporate intrapreneurship is relatively new business concept aimed at helping large companies advance their disruptive innovation initiatives. Due to its novelty and immaturity, this model of corporate innovation obviously needs a lot of refinements. The upcoming Corporate Intrapreneur Summit (organized by the Institute for International Research and Culturevate), taking place on October 8 in NYC, will provide a much-needed platform to discuss gains and pains corporations can expect when launching intrapreneurship programs.

In the core of the corporate intrapreneurship concept is a belief that only by institutionalizing the culture of entrepreneurship–usually associated with startup companies–can corporations succeed in creating new businesses and new markets. Being a corporate intrapreneur means working for a large company, yet behaving as a small company’s entrepreneur who cherishes risk-taking and experimentation.

The key question here is how precisely the habit of taking risky bets and embracing frequent failures can be established in a large corporation with its dominating culture of certainty, predictability and precision. Some academics suggested that this can be achieved through an “ambidextrous organization,” a corporate arrangement allowing companies support the existing (core) businesses and entrepreneurial initiatives simultaneously.

Critics of the concept argue that in real life, ambidextrous organizations are rare exceptions; the concept simply doesn’t work for the majority of large mature corporations.  Instead of trying to square peg in a round hole, corporations should tap on the real source of entrepreneurship: startup companies. This particular point of view took shape in the idea of “innovation ecosystems,” mutually beneficial relationships in which startups would serve as originators and early testers of disruptive ideas, whereas large organizations would provide resources to advance the most promising projects.

In practical terms, corporations realize the concept of innovation ecosystems through creating corporate incubators and accelerators. According to published data, only in the last three years more than 50 accelerators were launched by industrial giants such as Cisco, Coca-Cola, General Electric, IBM and Intel.

Corporate accelerators come in many shapes and shades, depending on the degree of connection between a corporation and startups; however, they all share the same important feature: the accelerator model dramatically improves the efficiency of the corporate tech-scouting process. In the past, corporate tech scouts had to approach promising startups one by one; now, corporations launch an accelerator and get exposed to dozens, if not hundreds, of small companies willing to join the program. An additional benefit for corporations working with early-stage entrepreneurial companies is the ability to influence their development to better align them with the corporate strategic goals (the ability to “reverse-engineer” a startup, as Mike Docherty calls it).

But how effective corporate accelerators really are? A few days ago, Anand Sanwal, CEO of the startup tracking company CB Insights, unleashed a surprisingly harsh diatribe against corporate accelerators, which he called “innovation theater” and even “a farce.” Mr. Anand asserted that the accelerators represent no more than a publicity stunt designed by corporations to “look innovative” in the eyes of their peers, competitors and investors.

Mr. Anand’s penchant for “take-no-prisoners” language is well known. However, his knowledge of the startup world can’t be questioned, either. And, by the way, his bold assertion that only 2nd-or 3rd-tier startups would take part in the corporate accelerator programs is quite testable: one has only to compare performance of startups in corporate accelerators with that for “stand-alone” startups or those belonging to non-corporate accelerators.

Mr. Anand’s escapade presents a good reason to ask a broader question: have corporate accelerators already shown their ability to create real value? As of today, the jury is still out, and in all likelihood the deliberations will be lengthy and contentious.

Image credit: http://www.venture-spring.com

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The Art of Killing (a Project)

Posted on October 1, 2015 by Eugene Ivanov

(This post first appeared on the Front End of Innovation Blog)

As inimagesnovation becomes an increasingly popular topic in business literature, social media and public discussions, it also turns into a powerful magnet for clichés. One of the most used, if not abused, is “celebrating failure.” Of course, innovation is all about experimentation, and experimentation results in failure more often than in success. We must absolutely accept innovation failures, learn from them and recognize people taking risks. An example here could be set by the Tata Group that rewards exceptional ideas even if they weren’t operationally successful (through a special category of awards, appropriately called “Dare to Try”).

But do we really need celebrate failure? In every language, in every culture, the word “failure” carries a distinct negative connotation; placing it in the same sentence with “innovation” doesn’t change anything. By calling to celebrate innovation failures we do nothing to advance innovation in places, still very numerous, where the fear of failing continues nipping innovation in the bud.

Instead of celebrating failures of innovation projects we’d better learn how to minimize the cost of failure through proper portfolio management. In practical corporate terms, that means that we have to master the art of killing projects.

Everyone would agree that killing projects is a key to maintaining healthy product development pipelines. By terminating projects that are going nowhere, companies free up resources to introduce new, potentially more successful initiatives. But in real life, killing projects turns out to be tough. Despite our proclaimed willingness to celebrate failures, we’re actually quite bad even at admitting them, for failed projects negatively affect the company’s bottom line and definitely don’t make our career prospects any better (to say the very least).

So, how do companies approach the ever important kill/continue decisions? This largely depends on which of the two schools of thought they belong to: “pick the winners” or “kill the losers.” The “pick the winners” approach relies on selecting relatively few projects that are expected to have the greatest chance to succeed–and then investing heavily in these projects. As often happens, once a “winning” project has been selected and advanced into the project pipeline, killing it becomes extremely difficult. In contrast, the “kill the losers” strategy is based on launching a large number of projects, followed by carefully monitoring them, identifying those that perform badly and then killing them as rapidly as possible.

A recent study on drug development–an area where “celebrating failures” sounds almost atrocious due to their astronomic price tag–shows that it’s the “kill the losers” strategy that turns out to be a true winner. In particular, the study showed that the number of approved drugs for any company strongly correlated with a high termination rate for drug candidates in preclinical/Phase I stages. In other words, companies making hard decisions about which project to terminate earlier in the project lifecycle did much better than those postponing these decisions for later.

Big corporations should take a careful look at how early-stage companies operate. Of course, startup entrepreneurs don’t run a large number of projects; they simply can’t afford it. However, they never waste time and resources on any single idea that proved to be a loser. They learn from the failure and they pivot, a startup’s equivalent to killing a project. As large companies warm up to the concept of intrapreneurship–instilling the spirit of entrepreneurship in the corporate culture–they must perfect the way they identify and terminate failed projects.

Hopefully, The Corporate Intrapreneur Summit (organized by the Institute for International Research and Culturevate) taking place on October 8 in New York City will address the topic of portfolio management as part of the corporate intrapreneurship process.

We live in a success-driven society. We should strive for success and success only. And let’s reserve celebration for those occasions, however rare, when we succeed.

Image credit: www.123rf.com   

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Internal Innovation Networks as a Basis for Corporate Intrapreneurship

Posted on September 29, 2015 by Eugene Ivanov

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(This post first appeared on the Front End of Innovation Blog)

Intrapreneurship is a relatively new concept developed to help large companies create new businesses, a process often called transformational (or disruptive) innovation. Intrapreneurship aims at instilling the spirit of entrepreneurship–usually associated almost exclusively with startups–in the corporate culture. Being intrapreneur means working for a large company, yet constantly taking risks and experimenting, as small company’s entrepreneurs do.

Intrapreneurship may take multiple form and follow different models; the upcoming Corporate Intrapreneur Summit (organized by the Institute for International Research and Culturevate), taking place in October 8 in New York City, will showcase practical examples of corporate intrapreneurship from  more than a dozen of leading corporations.

Yet no matter which specific shape corporate intrapreneurship might assume, there is one vitally important question that must be addressed: the relationship of the corporate intrapreneurship unit with the rest of the organization. If the newly-formed intrapreneurship structure is located within an existing business unit, there is a danger that it’ll lose its entrepreneurial edge by falling back to solving short-term problems relevant to the “host” business unit. On the other hand, if this structure is too isolated, both geographically and administratively (“an island and the mainland” model), it runs the risk of becoming irrelevant to the rest of the company.

Many perils of creating a corporate intrapreneurship unit will be significantly alleviated if the maternal company already has a functional Internal Innovation Network (IIN). I already wrote about the crucial role played by IINs in the overall corporate innovation strategy. Here, I’d like to highlight four major reasons why a viable IIN would help support corporate intrapreneurship:

  1. IINs help foster the very culture of collaboration the lack of which makes disruptive innovation in large companies difficult in the first place. Much has been spoken about the “NIH (Not Invented Here) Syndrome”; however, it’s important to realize that the NIH Syndrome applies to intra-company collaboration too as individual units are often reluctant to share with others their findings. By breaking internal silos and promoting intra-company collaboration, IINs prepare the whole organization to accept new ideas regardless of their origin.
  2. Corporate intrapreneurship requires close coordination of multiple functions within an organization, both that are (R&D, Business Development, Marketing) and are not (Finances, Legal, HR) directly involved in the corporate innovation process. However, in the majority of organizations, there is no institutional platform for all these units to collaborate on strategic issues. IINs provide such a platform, increasing the efficiency of decision-making and reducing the need for endless face-to-face meetings.
  3. IINs provide intellectual and operational support for the company’s external innovation programs. First, they help identify problems whose solution would require external sources of knowledge and expertise. Second, they facilitate testing and implementing of incoming external ideas and solutions. In other words, they provide a much needed “bridge” between the corporate intrapreneurship unit (“island”) and the rest of the company (“mainland”).
  4. IINs help identify emerging corporate intrapreneurs who–especially in junior positions and in geographically remote units–often remain unnoticed to the corporate innovation leaders. Because IIN platforms are intrinsically democratic, they provide voice to every employee regardless of their rank and location in the company.

Of course, it’d be an exaggeration to say that by themselves IIN can guarantee the success of a corporate intrapreneurship initiative. Yet it will definitely make chances for such an initiative to succeed much higher.

Image credit: http://www.wired.com

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Ambidexterity vs. Ecosystems: In Search for Sustainable Model of Intrapreneurship

Posted on September 21, 2015 by Eugene Ivanov

(This post first appeared on the Front End of Innovation Blog)

Innovation has climbed to the top of the corporate agenda in many large organizations, but its practical impact on the corporate performance has often been disappointing. Some would go as far as to say that the corporate innovation is “broken.”

This is perhaps an exaggeration. Large companies are actually quite good in what is commonly known as incremental innovation, which is a systematic improvement of already existing products or services; they’re also doing a decent job in streamlining operations and cutting costs. However, it’s definitely true that many corporations are much less successful in creating new businesses–no matter how you’d call this type of innovation: breakthrough, radical, transformational or disruptive.

The reason is simple: a hallmark of any successful modern corporation is a flawless, impeccable execution. However, while perfecting execution and establishing the culture of predictability and control, corporation lose the culture of entrepreneurship, the habit of experimenting and taking risky bets. That’s why transformational innovation, with its high rates of uncertainty and failure, struggles to take root in the corporate soil.

Many experts and innovation practitioners see a solution to this problem in bringing the spirit of entrepreneurship back in the corporate fold; a special term, “intrapreneurship,” coined more than 30 years ago, is now actively used to describe this process. Being intrapreneur means working for a large company, yet behaving as a small company’s entrepreneur, that is, cherishing risk-taking and experimentation.

On October 8, in New York City, The Corporate Intrapreneur Summit will take place, organized by the Institute for International Research and Culturevate. The Summit will bring together thought leaders in the field and practicing intrapreneurs from more than a dozen of leading corporations. One topic that is likely to come up in the discussions will be what models of intrapreneurship can be used to get real results.

18713551Back in 2004, Charles O’Reilly and Michael Tushman wrote an influential paper for the Harvard Business Review titled “The Ambidextrous Organization.” O’Reilly and Tushman argued that corporations actually don’t have to choose between investing in existing (core) and new businesses; they can do both (be “ambidextrous”) by creating corporate structures supporting both incremental and transformational innovation.

Critics of the ambidextrous organization concept pointed out that the requirements for both types of innovation are so different, even contradictory, that what makes companies great at optimizing the current business makes them terrible at creating new business opportunities. For this reason, ambidextrous organizations can’t be but a rare exception (3M and Google are traditionally mentioned as these rare exceptions).

41js0B+VpHL._SX312_BO1,204,203,200_An alternative to the ambidextrous organization approach has also emerged. In his recent book “Collective Disruption,” Michael Docherty, the CEO of a consulting company Venture2 (and a past successful intrapreneur himself), suggests that corporations should support transformational innovation by creating innovation ecosystems including startups. In this innovation symbiosis of sorts, startups will provide large companies with disruptive ideas along with a playground for testing and early prototyping, whereas large organizations will use their resources to scale up the most viable ideas.

Many would argue that differences between the two models of intrapreneurship are more semantic than real. Both require more openness to the external sources of innovation; both require more flexibility in relationships with outside partners; yet both require the creation of some corporate structures to facilitate the process. It’s therefore very likely that a new, “hybrid,” model may emerge combining the best features of the two original concepts.

Hopefully, the upcoming Summit in NYC will make a significant contribution to creating of such a viable model of corporate intrapreneurship.

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Why Do Startups Fail?

Posted on August 25, 2015 by Eugene Ivanov

why-100-employees-might-be-the-magic-staff-number-for-startups

I came across a March 2015 TED talk by Bill Gross, founder of the business incubator Idealab. He set out to identify the “single biggest reason why startups succeed” (or fail). To do so, he considered the five major factors: Idea, Team, Business Model, Funding and Timing. After having analyzed the fate of 100+ companies that went through the Idealab incubator and another 100 of “non-Idealab” companies, Gross came to an unexpected discovery: in 42% of the cases, the difference between success and failure was in the timing of market entry. The maturity of the team accounted for 32% of the difference, whereas the quality of underlying idea came only third with 28%.

Gross’ assertion that startups fail mostly because of the wrong timing of market entry may seem to contradict some other data. For example, in a recent report “The Top 20 Reasons Startups Fail” published by CB Insights, the number one reason for startup failure was “No Market Need,” something that sounds more conventional. At the same time, product mistiming occupies only the 10th position on the list.

There is obviously no reason to mistrust either of the sources. Why then the difference? The discrepancy may come from the startups analyzed in both samples. In Gross’ case, half of the companies he reviewed went through his famed incubator–and I assume that at this point, they were already “filtered” for having a decent product/business idea. Even among the companies in the “non-Idealab” half of Gross’ sample which he considers failures, we see such notable examples as Pets.com and Kozmo.com, whose product/business ideas were at certain point good enough to attract significant VC funding.

I therefore feel that in Gross’ case, the “losers” were already pre-selected for having decent Ideas, so that the reason for their failure must have been something else. On the other hand, no such pre-selection seems to exist in the case of CB Insight’s report that samples what appeared to be “random” startups.

Besides, Gross himself defined good timing as understanding of “whether consumers are really ready for what you have to offer them.” To me, this sounds simply as a more sophisticated version of the same conventional market need. In some cases, consumers aren’t ready for your product at this particular time; in others, they aren’t ready at all.

From all of the above, I make two conclusions. First, figuring out what consumers want and need still remains the first thing to do for any startup to succeed. Second, accelerators/incubators (such as Idealab) can help startups hone their business proposition; yet they can’t prevent them from failing for other– often unexpected–reasons. That’s why startups continue being a risky business.

Image credit: http://www.businessinsider.com/

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3 Ways to Improve the Efficiency of the “Idea Generation” Process

Posted on August 20, 2015 by Eugene Ivanov

downloadIn my previous post, I compared the efficiency of two approaches to corporate innovation: “bottom-up” and “top-down.” The former approach relies on ideas that are first generated by a company’s employees and then channeled up to the company’s senior management. The latter focuses on problems formulated by the company’s leadership which then moved downward for employees to find solutions to these problems. Available data suggest that the top-down approach (exemplified by an open innovation service provider InnoCentive) is significantly more efficient than the bottom-up (exemplified by an external innovation portal Idea Storm operated by Dell).

And yet, despite what numbers say, the bottom-up model of innovation remains very popular. Why? First, its popularity is fueled by a widespread belief that innovation must harness a collective wisdom of the whole organization. Second, sticking to this model allows the company’s leadership adopt a hands-off approach to innovation process. It’s so easy to announce an open season for ideas and then claim that the culture of innovation is taking root on the ground. Compare that to the time and effort needed to formulate the company’s innovation strategy, align it with the corporate strategic goals, identify key problems to be solved and articulate criteria for successful solutions–all what is required by the top-down approach.

I want to be very clear: I’m not against the bottom-up model of innovation as such. In innovation-mature organizations it can be remarkably successful. My point is that this approach doesn’t work well for organizations that are at the very beginning of the innovation journey. That said, I see at least three (reasonably simple) ways to improve the efficiency of the corporate “idea generation” process.

1. Define what innovation means for your company

The lack of ideas isn’t a problem for the majority of organizations; quite to the contrary, they’re usually awash with suggestions from their employees. The problem is that these employees, especially at the lower steps of the organizational ladder, often have only a vague understanding of the strategic goals of the organization; consequently, their ideas are likely to be misaligned with the organization’s real needs.

To overcome this problem, each company must clearly define what innovation means specifically for it; accomplishing this in the format of an Innovation Charter is usually a good idea. This definition should include the areas of desired innovations (product development, business model innovation or operational improvements), time horizons, target customers, the expected size of the market and so on. These parameters will serve as a “mold” that would shape the creative energy of the company’s employees into ideas that really matter to the organization. Yes, the number of suggested ideas is likely to drop, yet those that make the cut will have higher value.

2. Create a pool of ad hoc innovation experts

 For practical purposes, just defining what innovation means for your company isn’t enough. People in the R&D may have a great technical insight, but they’re likely to struggle with creating a solid business case. At the same time, marketing people may come up with a great idea for a new product, but will have problems with articulating precise technical specs.

To overcome this problem, a pool of ad hoc experts can be created bringing together people from all departments involved in innovation activities: R&D, manufacturing, marketing, legal, finance, etc. The name of the experts (with the area of their expertise) could be placed on the company’s intranet, and every employee will be able to contact them should the need for a particular expertise arise. Again, this will result in improved quality of ideas going upward for review.

3. Create a separate Innovation Fund

The reality of large organizations is that their R&D budgets for the next year are usually drafted no later than the Q3 of the prior year. That means that new projects will lack immediate funding and have to wait for at least a few months to get paid for, at which point their utility may already be questionable (not to mention the detrimental effect of this delay on employee morale). Of course, funding may come from interested business units, but they already have a full load of their own stuff. To make room for “newcomers,” business units will have to kill their existing projects, something that I personally never witnessed in real life.

To solve this problem, a separate Innovation Fund can be created to pay for projects that fall outside the regular budgeting process. The amount of money in this Fund could be annually adjusted to reflect the company’s appetite for additional projects, but it must be fixed for the current fiscal year, meaning that the Fund will not become a “rainy day fund” to cover the company’s short-term financial emergencies (as sometimes happens to “innovation money”).

I doubt that the proposed three steps will ever make the bottom-up model of innovation superior to the top-down approach, but I do believe that they will increase the efficiency of the corporate “idea generation” process.

Image credit: www.papermasters.com

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What Do Numbers Say About Different Models of Innovation?

Posted on August 6, 2015 by Eugene Ivanov

I’m not a fan ofimages the “idea generation” model of innovation. This approach, which I call “bottom-up,” puts the focus of innovation on ideas that are generated by employees on the ground and then channeled upwards to senior management. I think that the bottom-up approach is plagued with a numbers of serious flaws that I discussed here and here.

A plausible alternative to the bottom-up model of innovation is the “top-down” one, an approach that focuses on problems. In this model, a company’s leadership formulates problems that are strategic to the organization and then moves them downward for employees to find solutions to these problems. Again, I outlined the benefits of the top-down approach here and here.

Personal preferences notwithstanding, can we find any specific numbers pointing to a superior efficiency of one model over the other? Here is what I can offer and I strongly encourage anyone to challenge my numbers–or come up with their own.

Take InnoCentive, an open innovation service provider specializing in crowdsourcing. Its business model is a classic example of the top-down approach: InnoCentive’s clients post technical and/or business problems (“Challenges”) to the InnoCentive website, and a network of InnoCentive “Solvers” (365,000+ from nearly 200 countries) work on finding solutions to these problems. InnoCentive boasts up to 85% success rate of their Challenges.

Compare this to Dell’s Idea Storm, an external innovation portal designed to solicit open-ended ideas from consumer, a typical example of the bottom-up model of innovation. The opening page of Idea Storm tell us that of total 23,731 ideas submitted to the portal only 549 were implemented. That is slightly above 2%.

Sure, I understand the difference between soliciting ideas from outside a company vs. the company’s own employees–as I credit InnoCentive’s remarkable skills in formulating problems on behalf of its clients–and yet, the difference in the efficiency for both approaches is staggering.

That’s what numbers say.

Image credit: www.onlineastrologyconsultancy.com

 

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Start-ups as an enemy of entrepreneurship?

Posted on July 30, 2015 by Eugene Ivanov

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On July 27, The Telegraph published a column offering a blistering criticism of start-ups and what it’s calling a “start-up culture.” As the column author, Lucas Mikelionis, argues in the header, “Start-up culture is corrupting our youth and killing real entrepreneurship.” Mr. Mikelionis further claims that the start-up culture “has created a myth that has the power to ruin lives.”

For a rather short piece (fewer than 1,000 words), Mr. Mikelionis comes up with an impressive list of grievances he has with start-ups. First, he’s offended by the fact that start-ups go against “traditional business-making practice, where companies respond to the demand of consumers,” a strange claim, if you ask me, but that’s what Mr. Mikelionis says. Second, while admitting that some start-ups did deliver “revolutionary products,” he insists that this is not a rule, but rather an exception, arguing that most start-ups actually fail. Third, Mr. Mikelionis claims that start-ups don’t want to balance their books but prefer instead burning cash at high rate while ignoring market research, another strange claim, to say the very least.

Fourth, and this apparently is what brings Mr. Mikelionis’ blood completely to a boiling point, rare successful startups are not attempting “to create a business with a long-lasting plan,” but instead rapidly sell to “larger corporations…for a handful of cash.” As a result, there is a shift from company ownership to a “never ending game of start-up creation,” a deadly sin in Mr. Mikelionis’ eyes. A minor, but still a corrupting, factor is that inspired by Mark Zuckerberg and others like him, young people “rush out of university to start companies regardless of having no experience of working in the private sector.”

Mr. Mikelionis’ criticism is wrong in at least two fundamental aspects. First, he’s blaming start-ups for high levels of failure while apparently believing that “larger corporations” always do it right. This is absolutely not the case.  Let me quote Chapter 1 from Scott Anthony’s recent book “The First Mile”:

“…of eleven thousand consumer product launches in North America between 2008 and 2010, only six had first-year sales of more than $25 million, maintained at least 90 percent of sale volume the next year…and produced cumulative two-year sales that exceeded $200 million. Six. That’s 0.05 percent.”

So much for the efficiency of larger corporations! Large companies waste mountains of resources to launch products the vast majority of which spectacularly fail in the marketplace–and all that while keeping the balance books in perfect order (well, most of the time). Compared to that, the start-up world strikes me as El Dorado of Success and Efficiency. (Not to get too personal, but does Mr. Mikelionis really believe that all or even the majority of pieces published by The Telegraph, a large news corporation, are examples of journalistic excellence? I don’t think so.)

Sure, I strongly prefer young people graduating from colleges, at least eventually. And yet, it’s so tempting to recollect a number of failed companies, such as Kodak or Blockbuster, whose executive teams were packed with MBA graduates from the top business programs.

The second, and much more troubling, problem with Mr. Mikelionis’ piece is the fact that he doesn’t actually understand what a start-up is. He apparently believes that start-ups are smaller versions of larger corporations that can become such by creating “long-lasting plans” and nurturing the culture of ownership. To this end, Mr. Mikelionis could greatly enrich himself by reading Steve Blank with his famous “start-up is an organization formed to search for a repeatable and scalable business model.”

Naturally, not every idea can result in a repeatable and scalable business model. It takes experimentation and inevitable–and unavoidable!–failure to identify a winner. That’s why start-ups fail, and not because their founders are lazy, stupid or corrupted. And, yes, when a larger corporation sees a start-up with a worthy idea, it’s ready to shovel piles of cash at it. This is how big companies fill their product pipelines these days.

The ultimate winners in this game are we, the consumers; because start-ups help large companies innovate better and faster, bringing to the marketplace new and exciting products. That’s why in contrast to what The Telegraph and Mr. Mikelionis say, start-ups don’t kill “real entrepreneurship.” They are real entrepreneurship.

Image credit: http://www.forbes.com

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What Questions Does Chattanooga Shooting Raise?

Posted on July 19, 2015 by Eugene Ivanov

I like timageso argue that a key to successful crowdsourcing campaign is to ask a right question. It doesn’t really matter what this question is about, for as long as it well-thought-out, properly defined and clearly articulated. For, in the end, it’s precisely the quality of the question that makes your crowdsourcing campaign either success or failure.

Obviously, the ability to ask right questions matters not only in crowdsourcing, but in many other areas as well, including, not surprisingly, politics. I thought about that earlier today when watching the FOX News coverage of the Chattanooga, Tenn., shooting. During the interview with a former FBI official, a caption at the bottom of the screen read: “Chattanooga shooting raises question about lone wolf attack.”

Sure, the Chattanooga shooting raises many troubling questions; however, the one highlighted by the FOX News doesn’t strike me as the most pressing. The question I personally would love to have answered is this: How come that the Chattanooga shooter, Muhammad Youssuf Abdulazeez, had AK-47 in his possession? Who can explain to me why on earth a private person–whether a native or naturalized U.S. citizen; whether born in Kuwait, or Mexico or Kansas; whether a devout Muslim, or Christian, or Jew or an atheist; whether a lone wolf or a gang member; whether a school football player or a church choir singer; whether a brilliant student or delusional lunatic–can lay his hands on AK-47 assault weapon? Not a handgun or a hunting rifle, but the AK-47, a firearm which only real utility is to kill people?

(A side question to ask: is it a pure coincidence that such a shooting happened in Tennessee, the state that neither bans the sale of assault weapons nor requires background checks on private sales, the state that was rated with an “F” by the Law Center to Prevent Gun Violence?)

Every time a mass shooting happens in the United States, the question of gun control–real gun control– rises…and then gradually wanes until the next massacre. For as long as we choose ignoring this question–or keep asking other questions, like whether the shooter was sane or insane or whether he was “radicalized”–our attempts to fight gun violence will fail. Because it’s what inevitably happens to all campaigns that attempt to answer wrong questions.

Image credit: http://www.rt.com

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