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Innovate the Future
This page intentionally left blank
Innovate the Future
A Radical New Approach
to IT Innovation

David Croslin

Upper Saddle River, NJ • Boston • Indianapolis • San Francisco

New York • Toronto • Montreal • London • Munich • Paris • Madrid
Capetown • Sydney • Tokyo • Singapore • Mexico City
Many of the designations used by manufacturers and sellers to distin- Associate Publisher
guish their products are claimed as trademarks. Where those designations Greg Wiegand
appear in this book, and the publisher was aware of a trademark claim, the Sr. Acquisitions
designations have been printed with initial capital letters or in all capitals.
Editor
The author and publisher have taken care in the preparation of this book, Katherine Bull
but make no expressed or implied warranty of any kind and assume no Development Editor
responsibility for errors or omissions. No liability is assumed for inciden- Julie Bess
tal or consequential damages in connection with or arising out of the use
of the information or programs contained herein. Managing Editor
John Fuller
The publisher offers excellent discounts on this book when ordered in
quantity for bulk purchases or special sales, which may include electronic Project Editor
versions and/or custom covers and content particular to your business, Anna Popick
training goals, marketing focus, and branding interests. For more infor- Copy Editor
mation, please contact: Kim Wimpsett
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Compositor
Visit us on the Web: informit.com/ph
Rob Mauhar
Library of Congress Cataloging-in-Publication Data
Croslin, David.
Innovate the future : a radical new approach to IT innovation /
David Croslin.
p. cm.
Includes index.
ISBN 978-0-13-705515-9 (pbk. : alk. paper)
1. Technological innovations. 2. Information technology—
Management. I. Title.
T173.8.C765 2010
658'.05—dc22
2010007206
Copyright © 2010 Pearson Education, Inc.
All rights reserved. Printed in the United States of America. This publi-
cation is protected by copyright, and permission must be obtained from
the publisher prior to any prohibited reproduction, storage in a retrieval
system, or transmission in any form or by any means, electronic,
mechanical, photocopying, recording, or likewise. For information
regarding permissions, write to:
Pearson Education, Inc.
Rights and Contracts Department
501 Boylston Street, Suite 900
Boston, MA 02116
Fax: (617) 671-3447
ISBN-13: 978-0-13-705515-9
ISBN-10: 0-13-705515-3
Text printed in the United States on recycled paper at Courier in
Stoughton, Massachusetts.
First printing, April 2010
 This book is dedicated to the people who have made me
stronger by supporting me when I was weak. It’s dedicated to
my loved and loving wife, Suzanne, and my amazing children—
Jessica, Bonnie, Kaitlyn, Kristina, Olivia, Jolie, Parker, and
Hunter—for the sacrifices you have made during the writing of
this book. It’s dedicated to my best friends and mentors for
cheering me on when I was right but more so for guiding me
when I was wrong. And it’s dedicated to Bob Laird, whose
friendship, mentorship, and guidance made this book possible.
This page intentionally left blank
Contents

Acknowledgments xv
About the Author xvii

Part I Understanding Innovation 1

Chapter 1 Inventions and Innovations 3

Inventions and Innovations 4
Inventions and Randomness 7
Types of Inventions 10
Business versus Technical Invention 11
Internal and External Inventions 14
Disruptive Innovation 16
Incremental Innovation 20
Destructive Invention 22
Good Enough Innovation 23
Targeted Invention and Innovation 25

Chapter 2 Transformative Value 27

Perceived Value 28
Impact of Consumption Priorities 31
Business and Personal Lifestyles 33
Time, Money, and Simplification 36
Transformative Value 37
Trigger Points 39
Early Adopters 40

vii
viii Contents

Chapter 3 The Innovation Life Cycle 43

Innovation Types 44
The Innovation Life Cycle 44
Stage 1: Initial Invention 46
Stage 2: Disruptive Innovation 49
Stage 3: Incremental Invention 51
Stage 4: Positive Incremental Innovation 51
Stage 5: Repetitive Incremental Innovation 53
Stage 6: Negative Incremental Invention 55
Stage 7: Repetitive Negative Incremental Invention 57
Stage 8: Destructive Invention 59
The Innovation Life Cycle Inflection Points 59
Innovation Inflection Point A 61
Innovation Inflection Point B 62
Innovation Inflection Point C 64
The Optimal Innovation Life Cycle 65

Part II Business and Technical Life Cycles 67

Chapter 4 Business Life Cycles 69

Business Life Cycles 69
Product Life Cycle 71
Stage 1: Dominant Product 71
Stage 2: Feature Set Expansion 72
Stage 3: Feature Overkill 75
Stage 4: Commoditized Product 77
The Product Life Cycle Inflection Points 78
The Product Life Cycle and the Innovation Life Cycle 79
Market Life Cycle 80
Introducing the Market Life Cycle Inflection Points 80
Market Life Cycle Metrics 81
Stage 1: Market Creation 83
Stage 2: Market Battles 84
Stage 3: Market Truce 86
Stage 4: Market Stagnation 87
The Market Life Cycle and the Innovation Life Cycle 88
Company Life Cycle 89
Company Pressures 90
Stage 1: Initial Flexibility 92
Stage 2: Pressures 95
Stage 3: Frozen Flexibility 96
 CONTENTS ix

The Company Life Cycle and the Innovation Life Cycle 97

All Four Business Life Cycles 98

Chapter 5 Innovation Life Cycle Stagnation 101

Innovation Life Cycle Pressures 101
Appearance of Randomness 102
Overlapping Viewpoints 105
Product Commoditization 106
Product Delivery Chain 108
Transformative Value Chain 110
The Executive View: Innovation Is Very Risky 114
Management Team Challenges with Incremental
Innovation 116
Competitor's Advantages Within the Innovation
Life Cycle 118
Chapter 6 Innovation Life Cycle Disruption 121
Thinking Outside the Box 121
Building the Box 123
Assumptions Everywhere 125
Intellectual Property 129
Product Delivery Chain Stakeholders 131

Chapter 7 The Innovation Checklist 133

Overview of the Innovation Checklist 133
Isolate the Drivers of the Consumer’s Transformative
Value 134
Fully Understand Your Product Delivery Chain 136
Align the Different Viewpoints Within Your Company 137
Isolate Pain Points in the Product Delivery Chain 137
Reenergize the Transformative Value Chain 138
Define a “Good Enough” Product 139
Seize Control of Push-Me/Pull-You 140
Kill Assumptions 141
Recognize Your Innovation Life Cycle Stagnation 142
Figuratively Commoditize Your Product 143
Isolate Intellectual Property 144
Map Intellectual Property to New Markets 144
Create Disruptive Innovations 145
Fund Disruptive Innovation 146
x Contents

Part III Targeted Innovation 149

Chapter 8 How to Innovate from Scratch 151
Innovation Is Not Invention 151
Cool Is Not Enough 152
Isolating a Market for an Invention 153
Isolating a Consumer Need 155
Isolate the Drivers of the Consumer’s Transformative
Value 158
Define a “Good Enough” Product 159
Seize Control of Push-Me/Pull-You 160

Chapter 9 IT Solution Innovation 161

Centralized and Decentralized IT 161
Isolate the Drivers of the Consumer’s Transformative
Value 163
Fully Understand Your Product Delivery Chain 164
Align the Different Viewpoints Within Your Company 165
Isolate Pain Points in the Product Delivery Chain 166
Reenergize the Transformative Value Chain 166
Define a “Good Enough” Product 167
Seize Control of Push-Me/Pull-You 169
Kill Assumptions 169
Recognize Your Innovation Life Cycle Stagnation 170
Figuratively Commoditize Your Product 171
Isolate Intellectual Property 171
Chapter 10 Innovate to Dominate 173
Markets and Commoditization 173
Leaping from One Market to Another 175
Sometimes Leading Makes You the First to Fail 176
Isolate the Drivers of the Consumer’s Transformative
Value 177
Fully Understand Your Product Delivery Chain 178
Align the Different Viewpoints Within Your Company 179
Isolate Pain Points in the Product Delivery Chain 179
Reenergize the Transformative Value Chain 180
Define a “Good Enough” Product 180
Seize Control of Push-Me/Pull-You 182
Kill Assumptions 182
Recognize Your Innovation Life Cycle Stagnation 183
Figuratively Commoditize Your Product 184
 CONTENTS xi

Isolate Intellectual Property 184

Map Intellectual Property to New Markets 185
Create Disruptive Innovations 185

Chapter 11 Innovate to Conquer 187

Business Life Cycles Revisited 187
Isolate the Drivers of the Consumer’s Transformative
Value 188
Fully Understand Your Competitor’s Product Delivery
Chain 190
Align the Different Viewpoints Within Companies 191
Isolate Pain Points in Your Competitor’s Product
Delivery Chain 192
Reenergize the Transformative Value Chain 193
Define a “Good Enough” Product 194
Seize Control of Push-Me/Pull-You 194
Kill Assumptions 196
Recognize Innovation Life Cycle Stagnation 197
Figuratively Commoditize Products 197
Isolate Intellectual Property 198
Map Intellectual Property to New Markets 198
Create Disruptive Innovations 199
Chapter 12 Innovate to Disrupt 201
Market Reverse Engineering 201
Isolate the Drivers of the Consumer’s Transformative
Value 202
Define a “Good Enough” Product 204
Fully Understand the Product Delivery Chains 205
Isolate Pain Points in the Product Delivery Chain 206
Seize Control of Push-Me/Pull-You 206
Recognize Their Innovation Life Cycle Stagnation 207
Isolate Intellectual Property 208
Map Intellectual Property to New Markets 209
Create Disruptive Innovations 209
Chapter 13 Organizational Structure: Products to Solutions 211
Products versus Solutions 211
Stages of Organizational Change 213
Product Company 214
Rebranding 215
Executive Mandate 216
xii Contents

Overlay Organization 218

Solution Group 219
Solution Company 221

Part IV Innovation Deployment 223

Chapter 14 Valuing Innovations 225
Inventions versus Innovation 225
Valuing Inventions 226
Patents 227
Trade Secrets 229
First to Market 231
Relationships and Partners 233
Endurance 234
Valuing Innovations 235
Multiple Markets 236
Chapter 15 Bringing Innovations to Market 239
Fifteen Seconds to Success 239
Time to Think Like a Banker? 241
Presentation of Valuation 243
One-Pager 244
Meeting with Investors 246
Stealth Disruption 247

Part V Seeing It Work 249

Chapter 16 Innovation Use Cases 251

Use Cases, Not Case Studies 251
Use Case 1: Identifying Your Customer 252
Pharmaceutical Industry Products 252
Expensive Drugs with Complex Delivery Systems 252
Simplifying the Product Delivery Chain 254
Maximizing Transformative Value Throughout
the Transformative Value Chain 254
Benefits to Z-Drugs 256
Use Case 1 Innovation Take-Aways 257
Use Case 2: Targeting Transformative Value 257
What Is LiveComplete? 257
Targeting Consumers 258
Maximizing Lifestyle Impact 260
 CONTENTS xiii

Maximize Transformative Value 261

Use Case 2 Innovation Take-Aways 262
Use Case 3: Limitations on Transformative Value 262
Product Innovation 263
Convenience Drives Brand Loyalty 265
Use Case 3 Innovation Take-Aways 266
Use Case 4: Maximizing Lifestyle Integration 266
Technology for the Smart Mall 267
Transformative Value Chain 269
Benefits to the Manufacturers 270
Benefits to the Store 270
Benefits to the Mall 271
Benefits to the Consumer 272
Use Case 4 Innovation Take-Aways 273

Index 275
This page intentionally left blank
Acknowledgments

I would like to thank Bob Laird, my brilliant best friend, for all of his support
while I was writing this book. Bob planted the seed for Innovate the Future
and kicked me hard enough to make me write it. Writing a book, I have now
discovered, can be an agonizing experience filled with countless hours of
exploration, frustration, and self-doubt. Bob was my constant guide, never
accepting less from me than he knew I was capable of. The “shine” this book
may deliver is due mostly to Bob’s support.
I would also like to thank my mentors who listened to me drone on and
on about different topics, issues, and challenges from the book and yet kept
coming back for more. Writing a book, almost as much as borrowing money,
can truly test the bonds of friendship. Thank you to Craig Young, the best
project manager on the planet, who taught me to find the value in small
details. Thanks to Allen Proithis, the best business development executive and
networker anywhere, who taught me to attack in a million different directions
at once and showed me the true value of networking. Thanks to Larry
Commerford, one of the most brilliant technology people I have ever met,
who shook his head at me a thousand times and taught me how broadly ideas
can penetrate if you open your eyes and mind.
Many thanks go to Katherine Bull, my acquisitions editor at Pearson
Education, who patiently guided me through the writing, delivery, and pro-
duction of this book. Thanks go as well to the many editors and the produc-
tion and marketing teams.
Thanks to the stalwart reviewers who added their two cents, and often a
great deal more, of advice throughout the book: Brad Barbera, Roy Bynum,
Bob Laird, Benjamin Solomon, and Jim Woods.

xv
xvi ACKNOWLEDGMENTS

Finally, thanks to my ever-growing, global network of friends and associ-

ates who discussed a thousand different topics related to invention and inno-
vation with me. It never ceases to amaze me how many wonderful and
imaginative people there are in this amazing world of ours.
About the Author

David Croslin is the president of Innovate the Future, a consultancy special-

izing in customer, product, and market innovation. Previously, David was the
chief technologist at Hewlett-Packard in the $12 billion Communications,
Media, and Entertainment division, and prior to that he was the chief prod-
uct architect at Verizon Business and MCI. He has twenty-five granted patents
and is a frequent speaker at global conferences including CTIA, TMForum,
Billing and OSS World, and Mobile World Congress. He is a frequent advisor
to technology firms, venture capital firms, and fund managers, and he works
with numerous start-ups as a C-level executive and board member. David
runs the LinkedIn group “Innovate the Future” with more than two-thousand
distinguished innovators in seventy countries.

xvii
This page intentionally left blank
 PART I
Understanding Innovation
This page intentionally left blank
1
Inventions and Innovations

ave you ever wondered why the company you are working for now or

H worked at in the past was willing to put money into research and
development for one product while denying funding for another? Or
have you wondered why some additional product features for an existing
product were funded while another set was not? Did you think all of those
decisions made sense or were arbitrary and capricious?
How many times have you had a great idea that you didn’t follow up on,
only to find a year later that a complete stranger not only had the same idea
but turned it into an actual invention with a patent and a market? Did you
kick yourself because that person has fame and fortune and you don’t?
Not many of us have the genius of Thomas Edison, yet as Edison said,
“Genius is 1% inspiration and 99% perspiration.” Why is it that some ideas
just stay ideas, other ideas become interesting inventions, while yet other
ideas not only become inventions but are considered so innovative that they
change how people lead their lives? Edison had the ideas and the work ethic
to try to repeatedly fail. In spite of those failures, he ended up with 1,093
patents and created the lightbulb and electricity, the phonograph, and film
projectors and motion pictures.
So, what’s the difference between an idea, an invention, and an innova-
tion? Is the process truly random and subject to finding an Edison, or is there
a process to help the transition along? What are the different types of inven-
tions from the point of view of business versus technical and internal versus
external? What are the different types of innovation, and how should we
think about and consider them?
It’s important as a foundation for understanding the rest of the book that we
understand these questions and start to garner some idea about the difference
between ideas, different types of inventions, and different types of innovations.
3
4 CHAPTER 1 INVENTIONS AND INNOVATIONS

Inventions and Innovations

Two of the most important and distinctive utilizations of the words invention
and innovation demonstrate how far apart people’s perceptions can be. The
following are two utilizations, critical to defining the extreme ends of the
invention/innovation process:

• Patents are granted for inventions, not innovations.

• Customers buy innovative products, not inventive products.

It is important that the business processes used to identify and deploy

innovations take into account that there is a tremendous difference between
coming up with an idea, turning the idea into an invention, and finally evolv-
ing the invention into an innovation. Figure 1.1 shows these three ever-
higher, more difficult to achieve planes of idea, invention, and innovation. It
is critical to understand the transformative impact and value of the idea and
the invention on a consumer’s lifestyle.
An invention is something that is created from an idea. For example, an
invention could be a new manufacturing method, a new product feature, or
a new internal business process. It is important to realize that the mere defi-
nition of an invention does not make it intrinsically valuable. It often has a
potential value and is therefore categorized as intellectual property. But, until
it is deployed in some way, it should not be considered an innovation.

Transformative Innovation
Value

Invention

Idea

FIGURE 1.1 The three planes of idea, invention, and innovation

 INVENTIONS AND INNOVATIONS 5

Once an invention is implemented, packaged, marketed, and deployed, it

still may not be an innovation. At this point, it is only a new product,
method, or feature. If the product is poorly marketed or poorly accepted, then
the invention may not have the potential to become a true innovation. Or, the
limitation may be in the packaging, marketing, or price, and the invention
still retains innovation potential.
Only after a deployed invention has been used and accepted by the con-
sumer and has been deemed by the consumer to add some form of real, positive,
and transformative value will the consumer perceive the original invention as
an “innovative” product. It is at this point when the consumer perceives some
degree of transformative value that the original invention and the deployed
product that utilizes the invention both become branded as an innovation
and the common blending of the words invention and innovation occurs.
As illustrated in Figure 1.2, many terms apply throughout an invention-
to-innovation process. Inventions start out as discoveries that create a new
technology, define a new approach, and fulfill a perceived need. If a discov-
ery is then deemed to have possible value, the discoverers will utilize the
invention by creating a product or a process resulting in intellectual property,
patents, and assets.
Once an invention has been “fleshed out” into a utilizable product, it can
then be marketed. It is through the marketing process that the original dis-
covery is introduced to the consumer. How the consumer perceives and uti-
lizes the product and then how the consumer subsequently values the
deployed product determines whether the product is merely competitive with

Approach Nice to
Vision Product Have Lifestyle
Impact
Transformative Value

Accepted Needed
Idea Process
Need

Patent Existing New Market

Concept Market
Asset “Sticky”
Utilized
Method
Intellectual
Property Timesaving
Technology Easier

Discovery Utilization Incremental Disruptive

Invention Innovation

FIGURE 1.2 Inventions versus innovations

6 CHAPTER 1 INVENTIONS AND INNOVATIONS

existing products or is innovative to some degree. This could be summarized

as a product’s transformative value or transformative impact. In other words,
how much does the new product transform a consumer’s life or business?
New products that deliver no real transformative value are merely compet-
itive and in a consumer’s eyes have delivered no new properties that the con-
sumer would perceive as innovative. The introduction of a flashy new cell
phone model but with no new features should be considered as merely com-
petitive in nature. Such innovations deliver only incremental value to an
already existing market.
The introduction of a new product that creates a new market, that is
described as “needed,” and that has a real, identifiable transformative impact
on consumer and business lifestyles would be described as a disruptive inno-
vation. The introduction of the Apple iPhone and the RIM BlackBerry created
the smartphone market. Although primarily still cell phones in nature, smart-
phones had features that created a lifestyle and timesaving impact that is
transformative.
We will discuss how to force inventions to become innovations in later
chapters.

BOB SHOULD CONSIDER1

• Have we identified what our customers would consider innovative?
• How do we define the transformative value of our products?
• Do we have the inventions needed for new innovations?
• Are we pursuing competitive, incremental, or disruptive innovations?

1. Throughout the book, we will use a “Bob Should Consider” section to specify the questions
that a fictitious innovation expert named Bob would be asking as he ponders the aspects of
innovation that we have just discussed in the book. These questions are meant both to
summarize the main points of the prior discussion and to provide an initial set of specific
discussion points that you and your colleagues should consider for the innovation opportu-
nity at hand.
 INVENTIONS AND RANDOMNESS 7

Inventions and Randomness

Many companies encourage their employees to be inventive and provide sug-
gestions, no matter how big or small. They say things like “We need every
employee to be inventive. No idea is a bad idea. All ideas will be considered
for our new products.” Although we are not saying this is a bad idea, such
ideas will tend to be incremental and not transformative. Employees are
expected to do more with less these days, and few have the time to think
about anything outside their bailiwick. Simply, it’s not how a transformative
innovation process will typically take place.
If I were to blindfold you and ask you to find the single blue marble in a
bucket of 100 red marbles, your chances for success would be very limited,
especially if every time you pulled out the incorrect marble you had to return
it to the bucket. The invention and innovation processes currently utilized by
many companies do not vary a great deal from this seemingly endless and
fruitless process. Ideas are proposed, quickly reviewed, and then either dis-
carded or scheduled for further evaluation.
I describe this current invention and innovation process as being “random”
in nature. The typical innovation process has quite an element of pure chance
involved. The processes that companies implement, often based on input from
innovation consultants, are designed to maximize the potential for finding
viable inventions in spite of the underlying randomness of the process.
Generally, the current invention and innovation processes, such as they
are, attempt to reduce the impacts of this randomness by proposing that com-
panies follow three primary innovation rules, as listed here and depicted in
Figure 1.3. These innovation rules are not significantly different from many
approaches of increasing your chances of winning the lottery:

• Increase the number of inventors: This is done by “empowering” all

the employees, creating innovation teams, and so on. Increasing the
number of inventors, just like buying more lottery tickets, increases
the probability that you might hit a winner.
• Increase the odds of recognizing a potentially viable invention: This
is done by changing the way managers work with their teams, creat-
ing innovation review councils, and so on. When managers are taught
how to calculate the odds of winning a particular lottery game, then
they can maximize potential wins by ensuring employees play in the
right games.
8 CHAPTER 1 INVENTIONS AND INNOVATIONS

Vision

Approach
Idea
Need
Technology

Method Concept

Randomness

Increase
Empowered Number of
Employees Inventors

Increase
Management
Chances of
Techniques
Recognizing

Increase
Executive
Risk
Decision
Taking
Making

Invention
FIGURE 1.3 Inventions and randomness

• Increase the number of attempts the company tries to deploy new

inventions: This involves greater risk and requires changing the
decision-making and investing process of the executive team.
Essentially, the thought here is that the more times a company plays
in the innovation lottery, the more likely it is to win.

Google is almost universally regarded as a highly innovative company.

Google follows the common innovation rules:

• Google allows its employees to spend 20% of their work week inno-
vating relative to any topic they want.
• Google has monthly innovation review meetings and open-door poli-
cies to allow employees free access to management.
 INVENTIONS AND RANDOMNESS 9

• Google executives are willing to deploy virtually any reasonable

invention on a beta prototype basis and allow the employees to main-
tain it during their 20% innovation time.

Google’s goals for implementing these internal innovation policies are

twofold:

• Find ways to generate additional revenues from search advertising.

• Find new products, markets, and revenue streams that are not depen-
dent on advertising.

Google has succeeded tremendously at the first goal of increasing ways to

deliver ads and increasing search advertising revenues. The introduction of
astounding new innovations such as Google Earth has succeeded in chang-
ing the very name Google from a noun into a verb, as in “to Google.” Google
has succeeded tremendously at deploying incremental innovations that max-
imize the benefit of its original disruptive innovation. We will discuss later in
this chapter the concepts of incremental and disruptive innovation.
With regard to the second goal of becoming less dependent on a single
revenue stream, Google has been much less successful. In Google’s latest
annual report, the company states, “Advertising revenues made up 99% of our
revenues in 2006 and 2007 and 97% of our revenues in 2008. We derive most
of our additional revenues from offering internet ad serving and management
services to advertisers and ad agencies, the license of our web search tech-
nology and the license of our search solutions to enterprises.”2
As we shall see later, the perceived randomness of the current invention
process, and similarly the randomness of the innovation process, can be elim-
inated by following a targeted invention and innovation process.

BOB SHOULD CONSIDER

• Do our invention and innovation processes have an underlying founda-
tion of randomness?
• If we are trying to be transformative, when we select ideas for generat-
ing new products, are we considering the transformative impact on our
customers of those products?
• How much are our invention and innovation processes costing us
because of the underlying randomness?

2. Google, Inc. Annual report, form 10-K. Filing date 2/13/2009, p. 38.
10 CHAPTER 1 INVENTIONS AND INNOVATIONS

Types of Inventions
Not all inventions are created equally. They are particularly different in how
those inventions can be evolved into marketable products. Having an under-
standing how companies create inventions, how those inventions should be
properly treated as intellectual property, and how that intellectual property
can be used to create new product innovations is critical. Inventions can be
divided into three major categories, as depicted in Figure 1.4. These categories
are defined as follows:

• Foundational invention: Foundational inventions create a basis for

application. They are very much a new form of a “raw material.”
Examples could be the invention of nylon or the transistor. Although
the invention is valuable by itself, the true transformative value lies in
the applications of the foundational invention to create inventions in
the other two categories of invention: functional and product.
• Functional invention: Functional inventions are generally an applica-
tion of a foundational invention. Functional inventions can become a
product innovation directly as in the case of Velcro (which makes use
of nylon) or an integrated circuit (which makes use of transistors). The
functional invention can also be used as a component of the third
invention category: product invention.
• Product invention: Product inventions are the integration of one or
more foundational, functional, and/or product inventions. For

Nylon Rope
Velcro Children’s Shoe
Hook and Loop
Fastener Fastener
Touchscreen
Nintendo DS
Touch Panel
Multitouch ATM
Screen

Software Accelerometer iPhone

Integrated Cell Phone

Circuits

Foundational Functional Product

FIGURE 1.4 Types of inventions

 BUSINESS VERSUS TECHNICAL INVENTION 11

instance, the use of Velcro on children’s shoes or in other situations

where knots might come undone is an example of a product invention
that utilizes a functional invention (Velcro) that is based on a founda-
tional invention (nylon).

Each of these types of inventions, once developed into a product, mar-

keted, and accepted can become an innovation. Parents love Velcro shoe ties
for their kids, but they rarely think, “Wow, nylon is so cool and innovative.”
Depending on the type of business lifestyle (job) or personal lifestyle a
consumer has and how specific invention types apply to those lifestyles, each
of these three types of invention (foundational, functional, or product) can be
viewed as equally innovative. The key for all of them, however, is still the
degree of transformative impact and value.

BOB SHOULD CONSIDER

• What kind of inventions do we own?
• Are our inventions foundational, functional, or products?
• What kind of inventions do we want to create?
• What kinds of inventions are needed for us to create new, innovative
products?

Business versus Technical Invention

Inventions are not limited to physical creations as the previous discussion
might imply. Business inventions often take the form of a logical business
process. These logical business processes can then be manifested physically
by implementation within software packages or computer hardware or even
can be mechanized through the use of physical implementations such as robots
on an assembly line. When considering invention and innovation processes
as well as determining the transformative value or impact of an invention, it
is important to understand why particular inventions have the transformative
impact that they do and what the underlying concepts of the invention are.
With this in mind, inventions can also be classified by the types of creations
they are based on:
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