TECHnalysis Research Blog

March 8, 2016
Bringing Makers to Business

By Bob O'Donnell

One of the biggest challenges that large companies face is innovation, or rather, the lack thereof. Falling into habits built up through years or even decades of a similar mindset can lead organizations to a state where it’s very difficult for them to think outside the box. Even prosperous businesses with well-received products sometimes discover that the culture which led to their success ends up holding them back when the world outside moves more quickly than they realize.

Such is the state of many of today’s biggest and most well-known technology and consumer electronics-focused companies. Many of them have already reached or are now reaching a point in their company’s evolutionary cycle when a crisis of innovation is at hand. Sure, they may have a range of popular products now, but compared to the market redefining developments that younger, nimbler organizations are unveiling, some of these existing company’s offerings are starting to look a bit stale.

Part of the problem has to do with the manner in which organizations go about doing research for new products. Most well-established businesses have similarly well-established procedures for developing and bringing new products to market. While those may have worked to this point—and may continue to work for certain types of products or services—today’s consumers and business customers are becoming accustomed to rapid innovations in product capabilities, designs, and even business models.

The challenge is that those types of innovations are exceedingly difficult to create with traditional product research and product development procedures. They simply aren’t fast enough or flexible enough to meet these new requirements.

Luckily, technology companies have great examples they can learn from at the complete opposite end of the organizational maturity cycle—the Maker Movement and/or crowdfunding sites, such as Indiegogo. Makers are typically individuals or very small groups who come up with creative ideas and pursue those projects with the sole purpose of creating something interesting and cool. While many of the end results are for personal use, Makers who want to extend their efforts typically turn to a crowdfunding site to see if they can turn their pet projects into real products.

Crowdfunding sites provide a solid real-world viability test for a Maker’s product (or even just their idea—not all crowdfunding sites require a real working example before a project begins) by allowing people to vote with their dollars. This direct feedback serves as an excellent means to determine the opportunity—or lack thereof—for a given product.

Larger tech companies can and should be using this exact same mechanism to experiment with new ideas for tech products of their own. Of course, that’s not always as easy as it sounds. Many large tech companies don’t necessarily want to be associated with more experimental ideas. Plus, even if they do, not all of them have the ability to do small-scale manufacturing—ironically, sometimes it can be more challenging to produce a smaller number of products than it is to do large-scale mass manufacturing. The process often requires a different skill set, a different supply chain, and different manufacturing partners.

Finally, and most importantly, most larger organizations simply don’t have the mindset or the will to try out this very different way of thinking. While some companies, such as AT&T, have set up innovation labs of various types, those still work within the context of a more formal structure. Plus, they require a larger, upfront investment to get them started and don’t necessarily generate any real-world feedback. Some crowdfunding efforts, on the other hand, take only thought and time, and provide true end-user response and interest.

A few efforts have already been made in extending crowdfunding to the enterprise. At this year’s CES, for example, Indiegogo announced a suite of services to encourage businesses to try projects of their own. In addition, both Sony and GE have each had a number of successful efforts with crowdfunding and are planning many more. Sony’s initial efforts, which all fall under the rubric of First Flight—including their ePaper-based FES smartwatch—were limited to Japan only, but the company will likely expand its efforts to other regions as well.

For their part, GE (under the rubric of FirstBuild) has done several successful campaigns, including their OpalNugget Ice Maker, and they just announced a new contest to help with the industrial design for a new Cold Brew Coffeemaker.

What’s amazing to realize is that together, these two companies are nearly 200 years old (almost 124 for GE and 70 for Sony). Yet, despite the ingrained cultures and procedures typically associated with businesses of this size and age, they each have a new flood of innovation, thanks to these efforts, and can serve as role models for other companies.

To be sure, crowdfunding isn’t a cure-all for reigniting new ideas and products in an organization. Plus, there are certainly some limitations and challenges with existing models. Nevertheless, many tech companies would be wise to give some serious thought to the opportunities that both the Maker Movement and crowdfunding might bring to their businesses. They might just help find the spark they need to adjust to the rapidly changing world around them.

Here's a link to the original column: https://techpinions.com/bringing-makers-to-business/43988