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Do You Want to Solve your Problem, and get paid?
If you read the Henry Chesbrough article on Open Innovation in the winter 2006/7 MIT Sloan business school review then you can’t help, but think he identified the problem for the IT industry. The basic premise was that in the golden past internal development costs for a new product were low, and the life cycle for the product was long with the resulting good profitability for those who got it right. The current situation is that development costs have gone up; dramatically, and at the same time product life cycles have decreased, answer a squeeze on profitability. He argues for the need to share the development process with others, and to find new ways to capitalise on the product through creating parallel routes to compensate for its short life.
Henry Chesbrough has a particularly impressive record in the field of Open Innovation, may be even being the leader. You can explore his work more carefully here. However taking the lesson to heart I gained my further insight into this through the ‘open’ approach to research from reading ‘Wikinomics’; sub title ‘how mass collaboration changes everything’. This is not at first sight a killer of a book, after all seems a fairly obvious title and theme, but reading it carefully, as well as looking up the examples it features, makes it a very rewarding read.
The current state of the IT industry seems to be driven by; either consolidation of vendors for good old commercial reasons that happen in all industries; or the purchase of start-ups to access their innovative product / technology. The possible alternative could be said to be Open Source, but let’s put this to one side for now. If you have the book then turn to page 97, and start reading, alternatively go to the two sites that are quoted as examples; http://www.innocentive.com/ and http://www.yet2.com/ . What you are looking at are two similar, but different sites that trade break through capabilities. Unfortunately only in limited areas primarily around science, where corporations can post their problem, individuals can offer an answer and get paid the going commercial rate.
Actually, there is a lot more going on than just this, with some global enterprises running massive R&D operations also offering their unused patents as a method of recouping their running costs, etc, etc. Seems in IT it’s only IBM who are really making this pay, and to the tune of about $1 billion a year in licensing unused or lightly used patents. Makes you think about some of those interesting problems that need solving in department operations doesn’t it? Or may be about your useful script for……
Back to Open Source, and doing the work for the satisfaction, might be nice to get paid too! Anyone know of an equivalent site for the IT industry and the Technologists?
Posted by Andy Mulholland on August 6, 2007 | 
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Comments
# on August 8, 2007 2:21 AM, Chris Flanagan said:
Hey Andy - I do in fact know of Innocentive's counterpart in the IT industry. Have you heard of TopCoder?
It's a Connecticut company that was founded in April 2002 by Jack Hughes. Basically, he figured out a way to institutionalize programming competitions.
Jack is coming to speak at a summit we're hosting in the fall. We had Alph Bingham of Innocentive last year. Happy to share more about TopCoder. I wrote a story about it here: http://www.businessinnovationfactory.com/index.php?option=com_content&task=view&id=796&Itemid=353.
# on August 8, 2007 10:26 AM, andy mulholland said:
hi chris
good post - thanks for the extra information on TopCoder, always pleased when blogs get interactive and build on the points.
# on August 8, 2007 10:26 AM, andy mulholland said:
hi chris
good post - thanks for the extra information on TopCoder, always pleased when blogs get interactive and build on the points.
# on August 8, 2007 10:32 AM, andy mulholland said:
hi chris
good post - thanks for the extra information on TopCoder, always pleased when blogs get interactive and build on the points.
# on August 20, 2007 12:17 AM, Greg Narog said:
Andy,
Like you, read Chesbrough, and have spoken with him especially about topics in his book “Open Business Models”, and are intrigued by “Wikinomics” as a model for delivering new collaborative business intelligence solutions to the market, including into the IT domain.
Our software company, Oval Ideas, Inc., also searched for the counterpart of yet2.com that would fit the IT-Software space, and only found a few press releases of companies writing about the idea two or three years ago. We suspect several Process and market Maturity reasons explain why an ”open innovation” web solution for IT related IP isn’t available yet. And also think the yet2.com format isn’t an ideal fit for the IT-Software types in any case.
As you know, Patent-related inventing and development practices by Consumer Goods Products or Chemicals Product types are historically very different from those of Software or IT Business Methods development types. Since yet2.com developed its model around the needs of the P&G’s and Eastman Chemicals, it has evolved to fit their processes reasonably well.
Regarding maturity, Consumer Goods and Chemical Products development groups have long made it a core strategic practice to globally mine the world’s patents for new or sustaining product ideas. And so they have had CEO level support for staff and processes necessary to be able to evaluate hundreds, or thousands, of yet2.com type patent postings.
The typical IT group may have patent-lawyer support, but typically doesn’t have multiple Ph.D. Patent-Miners on either the product strategy or development team, who are chartered for “open innovation” patent solutions mining. So they would not be able to find the people or the time required to evaluate scores of yet2.com type postings.
We think Chesbrough is on the right track in his book “Open Business Models” in chapter 4 where he flatly states that current IP strategy techniques are lacking. He proposes an approach to improve strategic IP discovery and brokering across the board… we think he may have outlined the technical solution for IT related “open IP.”
As in “Open Innovation” he carries forward the notion of projecting each particular patent into the context of the specific business model for which its use is being proposed, i.e. visualizing the technology stack and showing where this IP fits and how it impacts the process and solution. A graphic of a business method or software application in this context is familiar as a “software objects” view of the world to the IT practitioner. Placing IP in this context makes it much easier to find and choose the desired “open” IT components or business models to solve a particular design problem.
All that being said about the technical solution to presenting the IP, experience teaches that multiple adoption hurdles exist in creating a viable yet2.com type business for IT related IP; hopefully “viable” then leads to “profitable.”
Top Executive level support would be required for any serious “open innovation” initiative to be launched in IT. As with P&G’s CEO’s popularized 50% external sourcing story, adoption and change management follow up is key.
Our company has developed a toolset that implements strategic mapping of IP into business models in the manner Chesbrough discusses, and we have deployed it with great success at Eastman Chemical and other Consumer Goods companies. We’ve chosen to deploy it where the practices and maturation of Chesbrough’s type ideas have already been rooted.
Taking “open innovation” into the IT space in a Wikinomics style is an interesting thought, some challenging work would be required to get there… we’d be pleased to further explore the possibilities with you.
# on August 21, 2007 12:36 AM, andy mulholland said:
A long thoughtfull piece and ties up with the big question in the software industry as to what is the future business model. who wants to pay for what and why being the basic question but with people like google turning some aspects on their head on one side and the EU and USA complications on patent and intellectual property law on the other its still anyone's game.
# on April 14, 2008 10:13 PM, shadab said:
Does any body in our company know about submitting a software patent that we created as a part of the client delivery. I work at a client location and seem to have come up with a novel way to deliver something. Can i file for a patent?? If so who do i contact. Replies are appreciated. Thanks