The document discusses innovation, open innovation, and crowdfunding. It defines innovation as the successful application of new ideas in practice. Open innovation is a paradigm that assumes firms can use both internal and external ideas and paths to market. Crowdfunding involves appealing to large numbers of people for small donations or investments to fund new projects or businesses, and comes in the forms of donations, lending, and equity investment. Common mistakes in crowdfunding include asking for too much or too little money and creating a promotional video that is too long or unclear on benefits.
The document discusses innovation, open innovation, and crowdfunding. It defines innovation as the successful application of new ideas in practice. Open innovation is a paradigm that assumes firms can use both internal and external ideas and paths to market. Crowdfunding involves appealing to large numbers of people for small donations or investments to fund new projects or businesses, and comes in the forms of donations, lending, and equity investment. Common mistakes in crowdfunding include asking for too much or too little money and creating a promotional video that is too long or unclear on benefits.
The document discusses innovation, open innovation, and crowdfunding. It defines innovation as the successful application of new ideas in practice. Open innovation is a paradigm that assumes firms can use both internal and external ideas and paths to market. Crowdfunding involves appealing to large numbers of people for small donations or investments to fund new projects or businesses, and comes in the forms of donations, lending, and equity investment. Common mistakes in crowdfunding include asking for too much or too little money and creating a promotional video that is too long or unclear on benefits.
The document discusses innovation, open innovation, and crowdfunding. It defines innovation as the successful application of new ideas in practice. Open innovation is a paradigm that assumes firms can use both internal and external ideas and paths to market. Crowdfunding involves appealing to large numbers of people for small donations or investments to fund new projects or businesses, and comes in the forms of donations, lending, and equity investment. Common mistakes in crowdfunding include asking for too much or too little money and creating a promotional video that is too long or unclear on benefits.
Idea Diffusion of Innovations Developed by Everett Rogers
Diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system.
2 3 4 5 RANKING MUNDIAL DE USURIOS DE INTERNET 1 6 Knowledge Person becomes aware of an innovation and has some idea of how it functions Persuasion Person forms a favorable or unfavorable attitude toward the innovation Decision Person engages in activities that lead to a choice to adopt or reject the innovation Implementation Person puts an innovation into use Confirmation Person evaluates the results of an innovation- decision already made Adoption of Innovation Step Process Adoption of Innovation over time Adoption of Innovation over time Adoption of Innovation over time 2 3 4 5 RANKING MUNDIAL DE USURIOS DE INTERNET 1 6 Relative advantage Compatibility Complexity of transition Possibility of testing Visibility of benefits Adoption probability grows if innovation has clear advantages for product, service or current behavior The more innovation is consistent with pre-existing higher the adoption probability Complex changes involved in innovation, reduce adoption likelihood A chance to try an innovation before making a final decision increase adoption likelihood The more obvious innovation benefits the greater adoption likelihood 5 Critical Factors Influencing Innovation Diffusion Innovation Following Joseph Schumpeters 1934 book The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle innovation is distinguished from invention by the fact that innovation is usually applied successfully in practice. Innovation - Diffusion When innovation occurs, innovations may be spread from the innovator to other individuals and groups. This process has been proposed that the life cycle of innovations can be described using the 's-curve' or diffusion curve. The s-curve maps growth of revenue or productivity against time. Innovation - Diffusion In the early stage of a particular innovation, growth is relatively slow as the new product establishes itself. At some point customers begin to demand and the product growth increases more rapidly. New incremental innovations or changes to the product allow growth to continue. Towards the end of its life cycle growth slows and may even begin to decline. In the later stages, no amount of new investment in that product will yield a normal rate of return. Innovation - Diffusion The s-curve derives from an assumption that new products are likely to have "product Life". i.e. a start-up phase, a rapid increase in revenue and eventual decline. But in fact the great majority of innovations never get off the bottom of the curve, and never produce normal returns. Innovation - Diffusion Innovative companies will typically be working on new innovations that will eventually replace older ones. Successive s-curves will come along to replace older ones and continue to drive growth upwards. In the figure above the first curve shows a current technology. The second shows an emerging technology that current yields lower growth but will eventually overtake current technology and lead to even greater levels of growth. The length of life will depend on many factors. Open Innovation Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology. The boundaries between a firm and its environment have become more permeable; innovations can easily transfer inward and outward. Open Innovation The central idea behind open innovation is that in a world of widely distributed knowledge, companies cannot afford to rely entirely on their own research, but should instead buy or license processes or inventions (e.g. patents) from other companies. In addition, internal inventions not being used in a firm's business should be taken outside the company (e.g., through licensing, joint ventures, spin-offs) Open Innovation Idea Generation Selection Execution Commercialization Open Innovation Idea Generation Selection Execution Commercialization Open Innovation Idea Generation Selection Execution Commercialization Open Innovation Idea Generation Selection Execution Commercialization Develop New ideas Open Innovation Idea Generation Selection Execution Commercialization Ideas and innovations from inside the organisation patents and innovations from outside the organisation Develop New ideas Open Innovation Idea Generation Selection Execution Commercialization Ideas and innovations from inside the organisation patents and innovations from outside the organisation Develop New ideas Open Innovation Idea Generation Selection Execution Commercialization Ideas and innovations from inside the organisation patents and innovations from outside the organisation Select Successful Ideas Develop New ideas Open Innovation Idea Generation Selection Execution Commercialization Ideas and innovations from inside the organisation patents and innovations from outside the organisation Select Successful Ideas Develop New ideas T e c h n o l o g y
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Open Innovation Idea Generation Selection Execution Commercialization Ideas and innovations from inside the organisation patents and innovations from outside the organisation Select Successful Ideas Develop New ideas T e c h n o l o g y
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Open Innovation Idea Generation Selection Execution Commercialization Ideas and innovations from inside the organisation patents and innovations from outside the organisation Select Successful Ideas Prototypes and Production Develop New ideas T e c h n o l o g y
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Open Innovation Idea Generation Selection Execution Commercialization Ideas and innovations from inside the organisation patents and innovations from outside the organisation Select Successful Ideas Prototypes and Production I P
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Open Innovation Idea Generation Selection Execution Commercialization Ideas and innovations from inside the organisation patents and innovations from outside the organisation Select Successful Ideas Prototypes and Production I P
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Open Innovation Idea Generation Selection Execution Commercialization Ideas and innovations from inside the organisation patents and innovations from outside the organisation Select Successful Ideas Prototypes and Production I P
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Open Innovation Idea Generation Selection Execution Commercialization Ideas and innovations from inside the organisation patents and innovations from outside the organisation Select Successful Ideas Prototypes and Production I P
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Crowdfunding The Status Quo Venture capital difficult to find for smaller requirements Debt finance hard to come by Business angels limited investments Typically a syndicate each investing 10k - 100k What if there was a way to have say 5000 angels each investing 10? What if anyone could become a business angel? Crowdfunding is an approach to raising the capital required for a new project or enterprise by appealing to large numbers of people for small donations
Crowdfunding Three Types of Crowdfunding 1. Donations, Philanthropy and Sponsorship where there is no expected financial return Kickstarter, IndieGoGo, RocketHub, Faithfunder, CharitySub, ChipIn, Catchafire 2. Lending/Borrowing KIVA, RateSetter, Funding Circle 3. Investment in exchange for equity, profit or revenue sharing Profounder, AppBackr, PeerBackers, Quirky, GrowVC
Fast Growing Retail Business Funding Circle is a UK clearinghouse for semi- anonymous lenders and borrowers (bank) Primarily for expanding existing small businesses Variable loan rates/term Average return 8.3% Funding Circle does the credit check, rates risk Lender amounts small $40 million in transactions to date
Common Crowdfunding Mistakes 1. Asking for Too Much or Too Little 2. A Bad Promo Video: too long, not clear on the benefits, no humour, no excitement 3. No Clear Itemized Budget 4. Poor or Overpriced Perks 5. Failing to Promote Your Project to Your Social Media Network 6. Failing to Inspire - No Good Story or Hook 7. Giving Up Too Early