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Hurdles to Innovation, Part 4

Originally published April 3, 2008

If funds for a new startup are so hard to come by (and indeed they are!), does this mean that the innovator has no chance? If the innovator insists on playing by the product development rules of yesteryear, then there is very little hope. But if the innovator is willing to adapt to the realities of today's investment environment, then there is indeed hope. And, by nature, the innovator is adaptable. 

Consider how products were once built. First, the innovator had an idea and envisioned a marketplace. Then, the innovator sketched out a product. A prototype or first draft of the product was produced. Then, the product was exposed to a few select people who made suggestions as to what needed to be done in order for the product to be “industrial strength.” Another round of development ensued, and the product was made much more complete. 

This process would continue through several rounds of development until the product started to reach true usability. Then, the product was introduced to one or two Beta site customers, and further development subsequently occurred. Finally, the product was ready for prime time. 

All of this development took a lot of time. And, who footed the bill for living and development expenses while all of this work was conducted? It is noteworthy that the described development process may take years. To refine a product from a rough idea to a usable and salable product is no small task. 

A classical solution was to do consulting as a way to pay the bills during the development process. However, if there were just a few people involved in this effort, they were going to be very busy, as consulting is its own full time job. Simultaneous consulting and developing meant that the development process would be stretched out over an even longer period of time. 

Under any scenario, trying to support a development effort with consulting is a challenging task. It requires a great amount of motivation, organization and discipline over a long period of time. The consulting/development path is painful and taxing however it is done. On this path, it takes the developer at least twice as long to develop the product, which, of course, opens the risk of someone else coming in and stealing market share. 

There is another development path that is worth mentioning. This path requires that you do the development in conjunction with another corporation; the large corporation sponsors the development work. This is a legitimate, viable path – but it is fraught with dangers. The biggest danger is in the ownership of the product once the product reaches maturity. The better and more useful the product, the less likely the innovator is to keep much, if any, ownership of the product. (Which, of course, defeats the purpose and motivations of the innovator in the first place.) If this path is taken, it is absolutely essential that the intellectual property ownership be determined in writing with legal counsel at the outset. Trying to develop the product first then figure out issues of ownership later is a prescription for disaster (and lots of lawsuits in which only the lawyers get rich). 

There are then alternative paths to the development of an innovative idea – but those paths are torturous and replete with danger.

  • Bill InmonBill Inmon

    Bill is universally recognized as the father of the data warehouse. He has more than 36 years of database technology management experience and data warehouse design expertise. He has published more than 40 books and 1,000 articles on data warehousing and data management, and his books have been translated into nine languages. He is known globally for his data warehouse development seminars and has been a keynote speaker for many major computing associations.

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