Morgan Ramberg
Finding a great idea is one thing. Knowing what to do with it is another. How do you get the word out? Protect it from intellectual property theft? Introduce it to the market?
Kellogg faculty share their research and insights into the best ways to unearth innovative ideas—and make sure they thrive.
Scientific discoveries can lead to marketable innovations. That’s not news. What is news: the frequency and speed with which they do it.
In fact, the overwhelming majority of scientific research leads to the development of patented inventions, according to Benjamin Jones, a professor of strategy, and Mohammad Ahmadpoor, a postdoctoral researcher at Kellogg.
By examining almost 5 million patents and 32 million journal articles, Jones and Ahmadpoor found that 80 percent of papers with at least one citation could be linked to a future patent.
Not only that, but they also found that on average only six years lapsed between the publication of the research paper and the patent application that directly cited it. As for indirect citations—cases in which, for example, a paper was cited by another paper that was then cited by a patent—those generally saw a time lapse of about 20 years between the original research paper and the patent application.
“That’s relatively quick,” Jones says. “Scientific discoveries are paying off in a couple of decades, not 50 or 100 years in the future.”
Where did this research come from? Almost 80 percent of the papers cited directly by patents stemmed from university or nonprofit researchers. But the patent applications that cited those papers mostly came from for-profit companies.
The moral of the story: if you want your company to innovate, keep abreast of scientific breakthroughs.
Say you’ve founded a startup based on some big idea. Protecting your intellectual property may take time and money, but it is most definitely worth doing, says R. Mark McCareins, a clinical professor of business law at the Kellogg School and former senior partner at the law firm Winston and Strawn LLP.
“Almost every startup has an idea that’s probably worth protecting,” he says, “whether it’s a piece of software or a bit of code or a totally new invention.”
According to McCareins, it is never too early to think about protecting your investment. “If you don’t address IP early, you run the risk of either A, spending all this money in research and development on something that isn’t patentable, or B, incubating with a third party, but because you have not protected your IP rights sufficiently, you allow the third party or others to extract your IP away from you without you even knowing it,” McCareins cautions.
And when you do take the plunge, avoid doing any patent applications through an inexpensive website. That’s like having brain surgery done at a drive-through clinic, says McCareins. (Be sure to read the rest of his interview with Argonne National Laboratory’s Pete Slawniak.)
No matter how analog your industry, you have to be technology-savvy to get your ideas—that is, your deliverables—into the world.
“If you’re starting a construction company, you might think it’s just lumber and nails,” says Brian Eng, co-founder and managing partner of Bluebuzzard, a Chicago-based software firm, and an adjunct lecturer of innovation and entrepreneurship at the Kellogg School. “But technology always ends up being a more critical component of the operation than you might think.”
He is talking not only about social-media accounts, but also about back-end technology such as web servers and credit-card processors. It is vital to become at least somewhat conversant with the relevant tech jargon, so you can avoid pricey blunders.
“Even if you never intend to write a single line of code, when you are outsourcing, you will have a better idea of whether the price a vendor quotes is realistic, or if they are just trying to fleece you,” says Jeffrey Cohen, an independent software engineer, entrepreneur, and adjunct lecturer at the Kellogg School.
It is important to take advantage of the many off-the-shelf tech tools out there, as well. With the existence of services such as Square (for credit-card transactions) and Batch (which automates digital-marketing functions), there is no reason for a startup to reinvent the wheel by coming up with its own solution.
If your big idea is technical in nature, choose carefully where to launch it, says Bryony Reich, an assistant professor of strategy at the Kellogg School who has studied how innovation spreads through societies.
Some technologies spread well through tight-knit societies and social groups, while some spread better through more individualistic ones. Specifically, technologies that are considered “low threshold”—meaning that they are valuable even if only a small number of people adopt them, such as computers or agricultural innovations—tend to do better in more individualistic cultures, such as the U.S.
In contrast, “high-threshold” technologies require a large number of users in order to provide value. (Think of messaging applications such as WhatsApp.) Those technologies tend to spread more easily in highly cohesive settings. For example, in Mexico, where communities tend to be more closely knit than in the U.S., 78 percent of the population used instant-messaging apps in 2013, compared to only 23 percent of the U.S. population.
This information can benefit companies seeking new markets, Reich says, by giving them insights into where a particular technology is likeliest to succeed and how they might incentivize consumers. For example, a cell-phone company could incentivize users in a loosely knit setting to adopt its high-threshold technology by offering a family-and-friends phone plan.
So you’ve got a truly groundbreaking idea. No matter how great it is, don’t expect others to embrace it right away, says Loran Nordgren, an associate professor of management and organizations at the Kellogg School.
That’s because, simply put, humans just are not hardwired to accept change. “If you were dealing with totally rational agents, you could sell your innovation on the grounds of its functionality—in other words, why it’s a good idea,” Nordgren says. “But you are almost never dealing with totally rational agents.”
Fortunately, there are ways to get around this annoying fact. First, Nordgren encourages characterizing an idea not as a benefit, but rather as a potential missed opportunity. Because we tend to feel the pain of a loss more deeply than the pleasure of a gain, we are more likely to embrace something if we think it will help us avoid missing out.
Humans tend to see the world in relative terms; thus, it is also helpful to give potential consumers points of comparison—even if some of them are decoys. For example, the priciest dish on a menu tends to drive diners’ attention to the second-priciest (which might have a better profit margin). “You want to present people with legitimate alternatives,” Nordgren says. “But the point, of course, is to draw most attention to the idea you want to pursue.”
We are also wired to value something more once it is actually in our possession. That’s why, for example, cable channels like to give consumers a few months of free service—because we are more likely to value that channel, and pay for it, than we would otherwise.
Finally, concentrate on winning over a critical mass of consumers, Nordgren says. The idea is to take advantage of something called “social proof,” which is the tendency for people to imitate the behavior of the people around them. Think of a piano player at a hotel, who strategically sticks high-value bills in her tip jar before she starts playing, so would-be tippers know what the desired norm is.
Of course, getting that critical mass requires patience. So look for easy wins first. Nordgren advises: “You want to be able to go to the key stakeholder and say, ‘four of the five directors have approved this,’ or, ‘we’ve successfully tested an early version.’”
Editor’s note: For more on selling your innovative ideas, see here.
