Fleas, elephants and innovation

Fleas, elephants and innovation

I’ve got a theory. It’s based on very little evidence. More rumour and more hearsay. Large teams can’t innovate. There, I said it. Stick a load of people together and human nature tends toward the mean, the average. It’s like the wisdom of the crowds, only more boring.

So with no numbers and a hunch, I drew a graph:

I’m not even sure what the X axis is, s’pose the Y is brilliant to boring.

One of the problems which bigger companies have when considering innovation is the simple fact that they have much more to lose. A company which has spent many years developing a particular brand may hesitate to take risk  —  with a new product or service, for example  —  which could damage that brand if it goes wrong. All innovation involves a certain degree of risk, so innovation is therefore at a premium. There’s a reason why one of the most popular business maxims of recent years has been, rather than a quote from a leading entrepreneur or successful multi-billionaire, a line from famously impenetrable playwright Samuel Becket:

‘Ever tried. Ever failed. No matter. Try Again. Fail again. Fail better.’

‘Failing better’ being a pretty good summary of the kind of risk-taking research and development which innovation requires, which bigger companies are fearful of attempting.

So innovation lies at the extremes then? So what are the solutions?

Well, one solution is to contract out innovation. A recent Accenture survey of 1,000 G20 companies found that 9% of the revenues of such companies are now generated by collaborations with smaller concerns, a figure which was expected to rise to 12% in 3 years and 20% in 5 years. Based on another statistically irrelevant survey of myself, I reckon there is something in this. I now work quite successfully with a few large corporates who earlier in my career I wouldn’t have trusted not to steal my thoughts before I’d left their marble clad offices (I recall around 10 years ago having a pal who was a senior guy in a telco sit next to me as I explained an idea on a conference call. As I spoke, he scribbled on a ‘post it’ note ‘Don’t tell them about x or y’ because, not only did he not trust his employer, he knew they ripped fleas off). But now, it’s (a little bit) different.

The other way to look at this is to take your favourite apps and root about and find out where they came from. Here’s a few I mostly knew, but a few surprised me:

British Gas’ Hive? Good on ’em. Ah, but no… Hive was actually created out of a collaboration with a tiny Cambridge-based tech startup called AlertMe, founded in 2006 by the gloriously named Pilgrim Beart, who only had 45 employees in 2010, and bought by Centrica in 2015 for £65m.

Google Maps then? Nar. One of Google’s favourite apps, core to the Google experience – if you want to go anywhere, Google Maps is one click away. The only thing is, the app was invented by four Australians and was Google’s second ever corporate purchase.

How about Waze then? This one’s a bit more well known, but who recalls that in 2006, “FreeMap Israel” was a project founded and developed by Israeli programmer Ehud Shabtai as a community project, which aimed to create a free digital database of the map of Israel in Hebrew? In 2008, Shabtai formed a company called Waze to commercialize the project. Google bought Waze for $966 million in 2013.

Android? Come on, Android was Google’s, right? Nope. Android is a mobile operating system (later) developed by Google and was founded in Palo Alto, California, not by Google. The early intentions of the company were to develop an advanced operating system for digital cameras. In July 2005, Google acquired Android Inc. for an estimated $50 million.

Even one of the best bits of the iPhone used to be made by Imagination Technology – the lovely fast GPU. Only that doesn’t count, as Imagination Tech used to be quite large… until lovely old Apple broke them.

So the flea can beat the elephant, can it? Well maybe. But here’s the thing: innovation requires singular passion, commitment and hard graft but it also needs the ‘fail faster’ mentality, and in a smaller concern, if you don’t get too emotionally attached to your next best idea… I reckon yes, smaller is better. Oh, and listen hard to your colleagues – their ideas are probably better than yours. Maybe. Sometimes. Probably. OK, yes they are. Often.

Dr Mark K. Smith

Founder & CEO