Open Innovation: Top-Down Meets Bottom-Up
In a prior century, high-tech innovation was largely a top-down affair, simply because the price of entry was so high, it was hard for individuals, and even for start-ups, to amass the capital needed. At the turn of the century, however, the rise of consumer technology, open source technology, and the cloud infrastructure needed to support open development have all reversed this dynamic. Today technology innovation is more likely to come from the edge than from the core, bottoms up rather than top down. Still, to complete the loop, to scale, and to monetize, eventually the top and the bottom must connect. Let’s sort out how this best unfolds.
Start at the Bottom
All the neat stuff comes out of nowhere. Where is nowhere? At the bottom, out of sight. So what is going on down there anyway? As a partner in a venture capital firm, Mohr Davidow Ventures, I get to see a fair amount of bottoms-up innovation as I engage with the entrepreneurs who pitch us and whom we fund. Here are five things that I think characterize the most successful teams:- They are engaged with a technology that has cool properties. Cool is an extremely important concept in high tech as it signals potential to create value heretofore unseen. You don’t yet know what the value is, but you do sense that it is there to be released. If it is not there, keep looking. Without cool, this thing is not going far.
- They are attracted to interesting problems. Interesting problems live on a frontier between straightforward problems (largely the domain of sustaining innovation applied to existing systems) and world hunger (essentially unsolvable, at least within the frame they are currently scoped). Interesting problems are not only unsolved, it is not obvious how they could be solved, but they do have “openings”—places where they might be attacked. When one of these problem openings matches up to one of your technology’s cool properties, things start to get exciting.
- They are in service to something beyond themselves and beyond wealth creation. Whatever this higher value is, it will be what attracts the rest of the ecosystem to support them at a time when they have nothing solid at all to offer. If the team is genuinely committed to these values, the world senses it and responds. Interestingly, no matter how hard you try, you can’t fake this. The world picks up on you and withdraws its support. From then on, you are well and truly stuck.
- They are entrepreneurial by nature. The word is French, but the behavior is American. This is our strongest national attribute, and what is great about it is, whenever anyone emigrates here from another country, they can catch the same virus virtually immediately. The essence of entrepreneurial behavior is taking responsibility for the outcome end to end. The easiest way to do this is to staple yourself to a problem and not let go until it is wrestled to the ground. If you like this sort of thing, there is nothing else that satisfies. If for any reason it spooks you, disruptive innovation is not for you.
- Most successful ventures are often two-headed. One head is the technical head, who is closest to the cool properties. The other is the domain expert head, who is closest to the interesting problem. One of the two then has to be the lead entrepreneur—doesn’t matter which. Both have to be in service to a common higher cause. That’s the mix we look for at MDV.
That's what I think. What do you think?
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