Thursday, June 16, 2011

How To Innovate - Fareed Zakaria

Again, life without TV comes with a cost; after "three" days of waiting, the video podcast of  Restoring the American Dream: How to Innovate is online now. A must watch (embedding disabled).

Len Baker perfectly  sums up the two personality traits he looks out for in the future entrepreneurs:
  • High energy level
  • Intellectual honesty and eagerness to seek negative feedback
Obviously, we as a nation has a surfeit of the former trait but the latter dissipates amongst the denizens of Lake Wobegon.

Fareed's Innovation story on Time magazine - here:

"What is innovation? We don't really have a good fix on the concept. We know it when we see it. But this much is clear: it encompasses more than just scientific or technological breakthroughs, as becomes apparent when you look at which companies are considered the most innovative. In the world of business rankings, it is very rare for a company to rank first in every survey, since the criteria often vary greatly. Yet when tackling innovation, one company, Apple, utterly dominates the lists, whoever puts them together.

So how would one define Apple's innovations? It is not a company that focuses on pathbreaking science and spews out new inventions and patents. The 2010 Booz & Co. ranking of companies by their expenditures on research and development places Apple 81st. As a percentage of its revenue, the company spends less than half of what the typical computer and electronics company does and a fifth of what Microsoft spends. Apple's innovations are powerful and profound, but they are often in the realms of design, consumer use and marketing. This is hardly unusual. In fact, the application of technology in service of a consumer need or business objective is what true innovation always has been.

Viewed from a historical perspective, that combination at the heart of successful innovation becomes clear. Len Baker, one of the founding fathers of the Silicon Valley venture-capital industry, says, "My favorite example is Isaac Merritt Singer, who invented the first commercially successful sewing machine. The real benefit to society was that he was the first person to sell to women, because prior to this it was assumed that women couldn't operate machinery. His company invented the installment plan and the trade-in. That's innovation. Think of eBay: eBay didn't create new technology. It used technology and revolutionized the way people do things." This idea of innovation as a new business process is of course older than modern capitalism itself. The system of accounting called double-entry bookkeeping, invented in Renaissance Italy, was powerfully connected to the development of trade and commerce. New ideas in all kinds of fields can fuel economic growth."



P.S.: CDO's doesn't count as innovation.

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