Saturday, March 2, 2013

Increasing the Pool of Innovators

In a simplistic sense, innovation requires inventors (i.e., creative idea generators) and entrepreneurs (i.e., enterprising individuals who can convert inventions into viable businesses). I believe that many people have abilities to contribute to the innovation process. But the current socio-economic and legal environment discourages many people from participating in the innovation process.

Let us consider an example. A group of two students has come up with an out-of-the-box idea for a new product that may provide solution for a pressing need in assisted living communities. They explore the possibility of getting a patent on their product. But they do not have money to pay for the patent. They start talking to angel investors to seek funding to further develop their idea. But raising funds without intellectual property protection seems a challenging task. Both students have received good job offers and getting pressure from their families to get on with their lives. So they decide to put their entrepreneurship effort on hold. Unfortunately, life comes in the way and they never get around to launching a product based on their idea. These two individuals do well for themselves in their respective jobs. But a very good idea is simply wasted! Their idea in the right hands could have created a new company and many jobs. It would have improved lives of numerous people living in assisted living facilities.

Patents were very useful in accelerating the pace of technology development in the last century. They enabled creative people to share their inventions with everyone in the world without compromising their ability to make money from their ideas. Unfortunately, patents do not appear to be the right tool for increasing the pool of inventors in the current time. Acquiring a patent is simply too expensive and time consuming for people without deep pockets. Even when a patent is secured, it is often not possible to successfully market it and turn it into profits. So we need to find an alternative way to protect financial interests of inventors to motivate them to share their ideas.

The advent of Internet is presenting new ways for people to raise funds for executing their ideas. For example, Kickstarter enables people to raise money to realize their ideas. However, many people who have great ideas simply do not have either the interest or the time to actually execute their ideas. So they are unlikely to take the Kickstarter route.

I believe that many people are capable of coming up with creative ideas. But very few people have the time, resources, perseverance, and drive to translate their ideas into innovations. So the pool of innovators is limited. Some people argue that only creative people willing to work hard and take risk should be in the innovation business. Under this model, many good ideas are wasted and ultimately society is unable to reap benefits from them. So I strongly disagree with this model! We really need to expand the pool of inventors and opportunities for entrepreneurs. Expanding the pool of inventors will require us to figure out a way to get all the creative individuals in the world to share their ideas and get rewarded for doing so.

The advent of Wikipedia has truly revolutionized the way human knowledge is being collected and distributed through a highly democratic participatory process involving a large number of people from all walks of life. There are many services such as IndustryPigeon, NineSigma, and LinkedIn that do match making between engineering service providers and service consumers. Increasingly, it appears that web portals and social media might hold a key to bring new inventors to the table.

In my opinion, bringing new inventors to the innovation table would require decoupling earning a reward for a useful idea from the need to successfully execute it. A possible way to accomplish this would be to launch NewIdeas web portal that will enable people to post new ideas in the form of Open Rights Patents and be rewarded for sharing their ideas. Visitors to the web portal would be able to rate these ideas. The advent of social media has enabled everyone to express their opinions about virtually everything. So I am sure that people will be happy to check out new ground breaking ideas and figure out a way to identify the best ones.

The proposed model is different from web portals where site owners or editors post their favorite ideas. The proposed model will work if innovators themselves posted their ideas in sufficient details. The web portal will need to have infrastructure to scale up to millions of ideas and queries. So we will need Wikipedia type infrastructure and visibility.

Posting ideas on a web portal without any legal protection will certainly present risks. What if someone takes an idea posted on the website and patents it. I expect that if NewIdeas web portal gains popularity, then ideas posted on this web portal will start being viewed as the prior art and hence not patentable. Hence, the risk to the person sharing the idea will be eliminated.

An entrepreneur interested in commercializing an Open Rights Patent won’t have to pay the inventor or NewIdeas web portal any money. So how would inventors make money? The web portal will run advertisements to generate revenues. This web portal should attract a large number of visitors who will be interested in various aspects of new technologies. So the web portal should be able to run targeted high value advertisements. There are several Internet-based magazines that earn significant amount of revenue by using an advertisement-based model. The web portal can also raise funds from donors and private foundations.

Ultimately, money may not be an important factor in motivating people to share their ideas. “Likes” and “Views” are emerging as currencies of the social media. So perhaps, societal recognition itself might be an incentive for people to share their ideas. For example, people contribute articles to scholarly journals to get recognition. Clearly publishing a well “liked” and “viewed” idea would be a good addition to an individual’s resume.

A portion of the advertisement revenues should be reserved for offering a number of awards for best ideas. The judging can incorporate a combination of public and expert opinion just like the popular TV contests. This model will enable entrepreneurs to acquire new inventions without any financial commitment to inventors. This will significantly expand the available pool of ideas that can be commercialized and lower the barrier of entry for new entrepreneurs.

Often an idea requires several iterations to make it really work. In the current patent system, taking someone else’s patent and improving it is not financially attractive. It leads to derivative patents. To commercialize a derivative patent, the inventor needs to pay royalty to the owner of original patent and it often requires difficult and lengthy negotiations. The Open Rights Patents will encourage people to refine other people’s ideas. Doing so will increase the odds of winning financial awards for all parties that contribute to the original idea and help in refining it.

An idea based an Open Rights Patent will be available to everyone and offer no IP protection. Would entrepreneurs invest in an idea if they do not have IP protection? Ultimately how much money can be made from an idea depends on how well it is executed in the market. So clearly people who can execute an idea well would definitely be interested in commercializing it. Moreover, an entrepreneur can always secure a traditional patent to protect their way of implementing the idea.

Is this model viable? Who would contribute initial ideas to build the momentum for NewIdeas web portal? The US alone has hundreds of engineering schools and thousands of engineering programs. Students from these programs do thousands of capstone design projects every year - all aimed to create new or improved products. But most of these projects don’t see the light of the day. There are also thousands of high school students who come up with creative science fair projects every year. I am sure that these students can be easily convinced to share their ideas in exchange for a chance to win serious money. So building momentum for New Ideas web portal does not appear to be an insurmountable challenge.

In summary, an advertisement based model to compensate inventors will fundamentally change existing entrepreneurship and innovation models and enable everyone in the world to invent and contribute to world-changing innovations. I am convinced that TV and Radio would still be in the dark ages had it not been for the advertisement based model to pay for the programming. I hope that Google, Facebook, Amazon, LinkedIn, or Bing folks are reading this blog and willing to run with the idea described in it.


  1. I really like the central idea in this blog -- decoupling innovation from entrepreneurship. I noticed myself that people who are highly technical and have great engineering or technical ideas are not necessarily very good business men. At the same time, good business men are usually not very technical. Steve Jobs is a case in point. Based on my own observations, it does not appear that he was ever a very technical guy. But he had a great business mind and he partnered with a man who was technical -- Steve Wozniak.

  2. Wonderful idea. One related thought is that the NewIdeas portal can reward the interesting ideas with participation in the business plan competitions hosted by all the top schools. These competitions facilitate networking with VCs, IP lawyers, and angel investors, and also involve coaching imparted by successful young entrepreneurs.

  3. Nice article. Particularly striking is the security-mechanism of the "NewIdeas" web portal that automatically evolves over time!

  4. This, to me, is a particularly interesting arena. The IP discussion is set in the 'commercial entrepreneurial' space. My personal 'inventing' experience has been within 'government space' where there is in fact decoupling of innovation and invention from entrepreneurial practices. What I found was that there are individuals that like to invent (and record their inventions formally), but that organizations that are not entrepreneurial, do not make effective use of inventions. So the whole notion of 'open invention' deserves more discussion, but also a more realistic perspective of overall 'ecology' of invention.

    Most often people think of a 'romantic' picture of a young, 'sole inventor' as not being tied to a large organizational framework that has claim to the items invented or innovated. The full discussion needs to explore various models of and relationships of the different aspects of the 'invention/innovation' ecology.

    More to come. This is a great topic!