Tag: Innovation

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Childhood Hands-on Play an Indicator of Furture Creativity

Play_StuartBrown“Unlike their elders, the young engineers couldn’t spot the key flaw in one of the complex systems they were working on, toss the problem around, break it down, pick it apart, tease out its critical elements, and rearrange them in innovative ways that led to a solution.”

Scientists and engineers at Cal Tech’s Jet Propulsion Laboratory (JPL) have over the years invented and designed major components of manned and unmanned space missions. In the 1990’s, JPL began replacing retiring engineers and scientist that started in the 1960’s. However, while the new hires came from top engineering schools, the new hires were not very good at certain types of problems solving that involved taking theory to practice. What were the new engineers missing?

Stuart Brown’s book Play: How it Shapes the Brain, Opens the Imagination, and Invigorates the Soul explores the important effect that play has on our lives.

Indicator of Future Creativity

One area that play positively effects is creativity. As Brown explains regarding JPL, the new hires had excellent grades from the best schools, but that was not enough. Nate Jones, owner of a machine shop specializing in racing tires, encountered the same problems as JPL did in hiring. Jones found that employees that had “worked and played with their hands as they were growing up were able to ‘see solutions’ that those who had not work with their hands could not.”

The managers at JPL found as similar pattern. They found the older employees, in their youth, had taken a part clock to see how they work, or made soapbox derby racers, build hi-fi stereos, or fixed appliances. The young engineers that had done the same thing–worked with their hands in their youth–were good at problem solving, but those who had not, were generally not. After making this discovery, JPL managers changed their interview process for new hires to ask applicants about projects and play they engaged in during their childhood.

In view of this Brown states, “The engineers that JPL found to be so adept were the one who had played [using] their hands in their youth…They performed well as adult engineers not because they had lots of practice working on watches, but because in a sense they were doing for work what they had always done for pure enjoyment.” This is along the same lines as  Paul Graham’s advice to hire programmers that write software in their free time.

Brown continues: “..there is a kind of magic in play. What might seem like a frivolous or even a childish pursuit is ultimately beneficial. It’s paradoxical that a little bit of ‘nonproductive’ activity can make one enormously more productive and invigorated in other aspects of life.”

Defining Play

Brown asserts that it is difficult to provide an all-inclusive definition of play, but provides that play generally has the following properties: (1) it is apparently purposeless and done for its own sake, (2)  it is done voluntary, (3) it has inherent attraction, (4) it provides freedom from time in that we can loose track of time in a state of flow, (5) it provides diminished self-consciousness, (6) it creates potential for improvisation, and (7) it creates a desire to continue doing it.

The examples provided by Brown may be anecdotal, but Brown is not the only one drawing the connection between childhood play and creativity.  If childhood hands-on play is, in fact, an indicator of future creativity, business owners and hiring managers may like to consider this factor when choosing employees or business partners.

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Fending Off Competitors with Barriers to Entry: Hard Problems and Networks

BarriersToEntry_HardProblems“If you can develop technology that’s simply too hard for competitors to duplicate, you don’t need to rely on other defenses. Start by picking a hard problem, and then at every decision point, take the harder choice.” – Paul Graham

Patents are not the only barriers to entry. Sometimes the technology can’t be patented, sometimes patent deadlines are missed, sometimes there’s not yet enough money to pursue a patent, sometimes you’re not sufficiently certain whether the invention will be the next big thing so as to justify pursuing a patent. Sometimes your looking for protection instead of or in addition to patents and you already explored the legal alternatives to patenting. What other barriers are there?

Barriers to entry provide a competitive advantage in the market place. If it is too hard for your competitors to enter a market or solve the problems you are solving, then you will have less competition. With less competition, you will be able to charge a premium for your solution. Financial backers, such as venture capitalist, are often interested in barriers to entry related to your solution because those barriers protect the financer’s investment. Barriers to entry come in many forms. Below I look at the strategy of picking hard problems and building networks, among the many others that might apply.

Pick Hard Problems

Paul Graham explains why it is important to pick hard problems to solve.

Use difficulty as a guide not just in selecting the overall aim of your company, but also at decision points along the way. At Viaweb one of our rules of thumb was run upstairs. Suppose you are a little, nimble guy being chased by a big, fat, bully. You open a door and find yourself in a staircase. Do you go up or down? I say up. The bully can probably run downstairs as fast as you can. Going upstairs his bulk will be more of a disadvantage. Running upstairs is hard for you but even harder for him.

What this meant in practice was that we deliberately sought hard problems. If there were two features we could add to our software, both equally valuable in proportion to their difficulty, we’d always take the harder one. Not just because it was more valuable, but because it was harder. … I can remember times when we were just exhausted after wrestling all day with some horrible technical problem. And I’d be delighted, because something that was hard for us would be impossible for our competitors.

Seth Godin notes Ford’s advantage by taking on hard problems:

Henry Ford did the same thing [take on hard problems] with the relentless scale and efficiency he built at Ford. Others couldn’t imagine raising their own sheep to make their own wool to make their own seat fabric…

“How do we do something so difficult that others can’t imagine doing it?” is a fine question to ask today.

Build-in Network Effects

VC, Fred Wilson, notes another way to create a barrier to entry is to develop a product or service that features a network effect. Fred provides an illustrative story–read the whole story here–involving the dentist industry where the first entrant provides high priced software for managing a dental office. A second entrant run by two entrepreneurs develops a low priced version of the software with mobile apps which eat away at the first entrant’s market. Then an open source version of the software is developed, which kills the first and second entrant’s businesses. Fred concludes:

…software alone is a commodity. There is nothing stopping anyone from copying the feature set, making it better, cheaper, and faster. And they will do that. … we asked ourselves, ‘what will provide defensibility’ and the answer we came to was networks of users, transactions, or data inside the software. We felt that if an entrepreneur could include something other than features and functions in their software, something that was not a commodity, then their software would be more defensible. That led us to social media, to Delicious, Tumblr, and Twitter. And marketplaces like Etsy, Lending Club, and Kickstarter. And enterprise oriented networks like Workmarket, C2FO, and SiftScience….
[emphasis added]

Conclusion

When you build technology that requires a network of users and you gain a user base, it is hard for competitors to be successful because simply copying the software is not enough. The competitor needs users too. Getting users is (or at least can be) hard. So the “network effects” barrier to entry may simply be one type of “pick hard problems” barrier to entry.

Photo credit to flickr user Anton Steiner under this creative commons license.

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Licensing an Invention: Lessons from Nikola Tesla

TeslaNikola Tesla was reduced to taking work as a day laborer digging ditches after previously working as an engineer with the Edison Company and then being forced out of a company he started with two other investors. He was down on his luck, unable to find work as an inventor or engineer.  He was broke and despondent describing this time as “a year of terrible heartaches and bitter tears.” He lamented that all of his high education in science and mechanics was “a mockery.”

But in the midst of this hardship he did not give up on inventing. He continued his work and filed a patent on a hydromagnetic motor. Opportunity would come through an unexpected place–through a network connection prompted by the mere discussion of his hydromagnetic motor invention on the ditch digging job. This story shows the need for carrying on in the face of adversity.

Nikola Tesla is an inventor best known for his contribution to the design of alternating current (AC). His work on the AC motor and AC power allowed for transmission of power for longer distances. His AC systems provide a foundation for the AC power systems used today. His work on AC electricity brought him recognition and wealth in his 30’s, but in his forties his stature fell somewhat by his actions and efforts related to the wireless transmission of power. Bernard Carlson’s biography,  Tesla: Inventor of the Electrical Age, provides a detailed look at Tesla’s life and work.

The success in licensing rights in Tesla’s AC motor and AC power system patents to the Westinghouse Electric Company provides potential lessons for licensing an invention and taking it to market.

 1. Use your Network to Find A Partner

While Tesla was working day labor digging ditches, as explained above, Tesla told the foreman about his invention efforts on the hydromagnetic motor. The foreman then introduced Tesla to Alfred Brown, who was the senior Western Union Manager. Brown knew he needed the business help of Charles Peck, who he knew previously. Brown was technically oriented and Charles Peck was business savvy.

Peck and Brown agreed to cover Tesla’s development and patenting costs. They also provided him with a salary of $250 per month. The three agreed to split the profits in thirds with a third to Peck and Brown, a third to Tesla, and a third reinvested in future developments. Before focusing on AC motors, Peck and Brown first encouraged Tesla to work on a pryomagnetic generator.

Not every inventor needs a financial/business partner but sometimes its helpful. You never know who in your extended network can help. Its not clear that Tesla was asking for help from the foreman. It appears that he was merely talking about his invention. Tesla was able to talk freely about his thermomagnetic motor invention because he had already filed a patent application on it. Sometimes you might want to keep your invention confidential even after filing a patent application for business or competitive reasons (not patent reasons). But in other cases, talking about the invention after filing a patent application in conversations with others can produce unexpected positive connections and results.

2. Know When To Pivot

Tesla’s efforts at making a pyromagnetic generator ran into problems. As Carlson recounts, Tesla was “[d]istressed that he was an able to perfect this invention, [and] Tesla feared that Peck and Brown might abandon him….” But they did not. Peck had confidence in Tesla. Peck encouraged Tesla to focus his work on an electric motor.

Peck likely encourage Tesla to work on electric motors, because he was aware of the market at the time. Carlson writes, “Peck and Brown were probably comfortable with Tesla investigating motors because of the growing discussion in electrical circles about using motors in central stations.” It can be difficult to know where to pivot to. But it is important to be aware of the market developments, which can indicate where to turn next.

3. Have Something to Show

Tesla had to convince Peck and Brown that he should work on AC motors rather than DC motors. Nearly all of the central stations in the U.S. in the mid-1880’s were running DC not AC. The DC generators and the copper distribution network required Edison to sell DC systems in densely populated areas. Westinghouse therefore saw an opportunity to design AC systems that could serve dispersed populations profitably.

In order to convince Peck and Brown that AC was the way to go, Tesla devised a demonstration. The demonstration had a similar purpose as Christopher Columbus’s alleged demonstration to Queen Isabella where Columbus allegedly stood an egg on its end in order to convince the Queen to finance Columbus’ ships.

To demonstrate the power of AC rotating magnetic current, Tesla attached a four-coil magnet to the underside of a table. He placed a copper plated egg and several balls on top of the table. Tesla applied two out-of-phase currents to the magnet, which caused the egg to stand on end and caused the egg and the balls to rotate on the table top. Tesla explained that the spinning was caused by the rotating magnetic current. Peck and Brown were then impressed and supported Tesla’s work on AC motors.

Tesla learned from this that to sell others on his invention he had to provide a demonstration or a show. I think this is likely true for many inventions. It harder to sell an invention without a prototype or a demonstration that allows others to see how it will work. Oral and written descriptions often do not have the persuasive power of a prototype or demonstration that others can see and touch. In Tesla’s case the demonstration was not even a motor. Instead the rotating egg showed the power of AC. Since a motor’s function is to rotate an output shaft the rotation of a metal egg was a sufficient proxy to achieve the desired interest from Brown and Peck.

4. Have a Story to Tell

Every successful inventor must tell a story that sells the invention to financial backers, other companies, decision makers, and/or the ultimate consumer. As Carlson stated, “no idea, no invention goes anywhere unless one is willing to tell a story about it, a story that another person finds interesting and persuasive.”

Not only did Tesla have something to show, he had a story that accompanied the demonstration. His story tied his invention to a famous figure, Columbus, who achieved what others thought was not possible–sailing west without falling off the flat earth–and in doing so, made a remarkable discovery, America. The implicit link that Tesla made was that if Peck and Brown got on board with AC, they would be associated with an endeavor that would change the world.

5. File Patent Application(s)

After Tesla developed a prototype model polyphase AC motor in his lab, he proceeded to file a patent application. And instead of filing multiple applications on individual motor designs, he and his patent attorney Parker Page filed one comprehensive patent application that included not only a new AC motor, but also a new system of electrical power transmission. According to Carlson, this was a bold and unusual move at the time. However, now it is quite common to file a patent application covering an overall system.

As Tesla did, the safest position is to file a patent application before going public with the invention. In the U.S. (but not most foreign countries) there is a one year grace period, but its best not to rely on it if you don’t need to.

6. Build Your Reputation, Obtain Social Proof

Brown and Peck decided on a strategy of patent-promote-license regarding Tesla’s inventions. They decided that in order to successfully promote Tesla’s inventions, Tesla needed to gain recognition in the field. Tesla had not previously joined any trade organizations or been involved in the electrical engineering community. First, they obtained the endorsement of a known exper in the field, Professor William Anthony. Tesla demonstrated his AC motor to Anthony and Anthony was impressed. Anthony then spread the news about Tesla’s motors to his fellow engineers and discussed the motors in a lecture he gave at MIT.  Therefore, the endorsement of Anthony provided the initial social proof within the relevant community. Then, Peak and Brown contacted the technical press and Tesla’s inventions received favorable coverage there. Then Tesla was invited to give a lecture on his motor and system of electrical power transmission at a meeting of the American Institute Electrical Engineers. This set the stage for the licensing of the patents to Westinghouse.

Not every invention requires a strong technical reputation in order to gain recognition with the intended audience. However, you need to have an understanding of what your audience expects in order to gain their attention and have them take you seriously. Tesla gained the social proof within the required group in order for his invention to be taken seriously. You need to figure out what social proof and reputation is necessary or helpful in promoting your invention. And as Telsa’s experience shows, you don’t have to have a preexisting strong reputation, you can build one when you need it.

7. Make the Sale

Ultimately Peck worked out a license of the patents to the Westinghouse Company for what amounted to $200,000 over ten years. More work had to be done in the development of Tesla’s AC power systems at Westinghouse, but licensing was a step along the path that ultimately put Telsa’s power systems in commercial use.

Peck died later and Tesla was unable to find someone like Peck who could guide his inventive efforts and help sell his later inventions. Therefore, Tesla is often known for his later inability to successfully commercialize his inventions after the AC motor/power invention. Yet, as shown above, Tesla benefited from the partnership with Peck and Brown. They were able to successfully guide the licensing of this inventions related to AC power. Of course, not all inventors require a business partner. But inventors and entrepreneurs sometimes forge relationships that foster a balance between creativity/imagination and business.

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Two Ideas for Economic Development: Lifestyle and Exits

Almost every locale is interested in economic development. Intellectual property often results from economic development through new new inventions and creative works. Below are two ideas for economic development from venture capitalists.

Fed Wilson recently explained what the civil leaders looking to revitalize and attract new business need to do. Instead of focusing on tax incentives, connecting with local research universities, and providing startup capital, Fred says you need to first build a community that people, especially young people, want to live in:

I’ve been asked by civic leaders from places like Newark, Cleveland, Buffalo, and a number of other upstate NY cities that have suffered a similar fate how they can do the same thing. They all talk about tax incentives, connecting with local research universities, and providing startup capital. And I tell them that they are focusing on the wrong thing.

You have to lead with lifestyle. If you can’t make your city a place where the young mobile talent leaving college or grad school wants to go to start their career, meet someone, and build a life, all that other stuff doesn’t matter.

Read the rest of Fred’s post here.

Mark Cuban says that there’s “plenty of sources of capital everywhere.” But what Silicon Valley does best is create company exits:

Silicon Valley as a source of capital is no better or worse than any other big city. There are plenty of sources of capital everywhere. Yes, they may be better at writing 40mm dollar checks to startups (Color anyone ? ). But start up capital is not their secret sauce.

What Silicon Valley does better than anyone is create exits. They know how to get people who they have made money for to turn over a lot of that money to buy the companies they have invested in. They know how to put on a show to get a company to an IPO. They know how to go out and get hundreds of millions of dollars to bridge companies with 10s of millions in revenues to their IPO and more importantly to make sure the IPO happens.

So if you want your new tech corridor to play in the big leagues with Silicon Valley and its VCs , don’t stress about capital for entrepreneurs to create companies. Stress about capital that will buy provide exits for companies or that can get them to a liquidity creating IPO.

Read the rest of Mark’s post here.

Not everyone thinks exiting is a good thing, but knowing the option exists creates an incentive in the locale.

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Eric Waltmire Presenting on IP for Dupage’s REV3 Innovation Center

Rev3On March 11, 2014 at 6:30pm, REV3 Innovation Center of Dupage is hosting me for a presentation on Strategies for Protecting Intellectual Property: Innovation and Branding. Intellectual property plays a role in adding value to most businesses, whether through invention, branding, or the use of other creative works.

My presentation will help business owners, entrepreneurs, and inventors understand how patents and trademarks can be used to protect innovation and business branding. It will provide strategies for protecting intellectual property rights under various scenarios and funding circumstances. Sign up here to attend.

Particularly the presentation will cover the following.

Patents and Invention Protection:

  • What is patentable
  • Patent Searching
  • The U.S. Patent Application Process
  • When to maintain secrecy and when to publicize
  • Seeking Foreign Patent Protection
  • When not to seek a patent
  • When and how to rely on trade secret protection

Trademarks and Brand Protection:

  • Value of trademarks
  • Types of marks
  • Strategies for choosing legally strong marks
  • Proper trademark use
  • Strategies for relying on branding in the absence of patent protection

In addition, the presentation will discuss steps that are needed to obtain and maintain ownership over the intellectual property created by your company, its employees, and its contractors.

REV 3 Innovation Center
REV3 Innovation Center is an incubator and future co-working space in DuPage County. REV3 is focused on helping people and companies manufacture products, software, and technology to drive the third industrial revolution. One aim of REV3 is to provide facilities to allow companies to prototype, build, and assemble small and moderate scale product volumes.

If you are interested in getting involved with REV3, please contact me.

Location
The presentation will be held at the Illinois Institute of Technology (IIT) – Rice Campus at 201 E. Loop Rd., Wheaton, IL 60189.

Please sign up to attend here: http://rev3dupage.com/events/?ee=12.

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Invention Evaluation Factor: Dancing on the Edge of Failure

SONY DSCHow do you know whether your project / invention is worth continuing to pursue or whether to start in the first place? There are many factors that you might consider when determining whether to pursue a project / invention. One question you might want to include in the mix is whether your invention / project makes or has ever made you feel like you are dancing on the edge of failure.

I consume a lot of content on the topic of innovation and entrepreneurship. Recently I was listening to a podcast series called Seth Godin’s Startup School. There Seth provided that great characterization “dancing on the edge of failure,” which is applicable to the important engaging work carried on by innovators.

Dancing on The Edge of Failure. In episode 10 of the podcast, titled Tactics, Seth talks about finding one’s purpose. Seth asserts that you really feel alive and engaged–not because you were born to do a certain thing or endeavour, such as playing the guitar, paving the street, or running a kids shelter–but because you are dancing on the edge of failure in a particular endeavor.

I think “dancing on the edge of failure” is a great descriptor for challenging and engaging pursuits of life. The image created by the phrase “dancing on the edge of failure” is a mix of excitement combined by the seriousness and focus it takes to be on an edge, especially an of edge of failure. You might succeed or you might not, but the opportunity for success is energizing and focusing at the edge. Endeavouring on a project that is not safe and known brings a level of excitement and interest. Dancing on the edge of failure is not meant to imply recklessness or a lack of planning and due diligence, but rather effort on a challenging endeavour that is not a sure bet.

I see the effects of dancing on the edge of failure in my innovator and entrepreneurial clients. The mix of energy, excitement, and hard work brings an invention from conception to market. Clearly, new inventions generally have a higher risk of failure than the tried and true.

Innovation at the Edge. Innovation often occurs at the edge. This is because if you’re too far outside of the box, the components necessary for your innovation to be adopted might not be available or your innovation might not be accepted by your customer base because its too far out there. On the other hand, if your innovation is in the box, it may not be sufficiently new to generate interest or success. Therefore success is often found at the edge.

I transcribed the following excerpt of the podcast where Seth talks about dancing on the edge of failure:

[14:14] I think there’s a reason its hard to scale. ….  [14:40]  I don’t think there are many answers here, I think largely there’s one. And this is what the Icarus Deception is about. I think that the purpose for just about everybody, when they feel like they have achieved their purpose, has nothing to do with to play the guitar, to pave the street, to run a kids shelter. I mean none of that is in our DNA, right? I think it is to dance on the edge of failure. I think that when people are dancing on the edge of failure and their growing and there is a void over there but they keep moving forward—that’s when we feel alive as people. There’s a few people that don’t have that. Its been boiled out of them or raised out of them or whatever. But generally it’s that getting close to the precipice that I think is ingrained in who we are as people.

…

So when you talk in the persuasive way you have, lots of people sign up for the Linkedin group. But then, they are safe to quit. It is easier to quit than it is to stare down the abyss. Its easier to quit then to do that dance. . . . . That in fact our purpose is in finding the thing that we did that we didn’t think would work an hour ago and now its working well enough to wonder what the next thing is and keep that cycle going. And the magical ironic punchline is the internet is making that easier than ever for 1.5 billion people. The explosion we are about to see, I think, is not the explosion of industrial job creation it’s the explosion of people who figure out, whether there is money involved or not money involved, how to do that scary thing, whatever that scary thing is.

[Seth Godin’s Startup School, Episode 10, Tactics (emphasis added)]

Innovation often happens through those who are willing to dance on the edge of failure. What projects allow you to dance on the edge of failure?

Photo by flickr user thebarrowboy licensed under this creative commons license.