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Sources of Growth Key Trends in Technology Innovation Management Dec 13, 2018
Michael Weiss
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Innovation challenges
Source: ISPIM Connect Ottawa 2019
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Challenge: Scaling startups
Globalize
Interact
Legitimize
Scale
Secure
Sell
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Grow early, rapidly and securely
Globalize
Startups that globalize can better adapt to change, are worth more, and grow revenue and jobs faster
They do so by operating across countries, leveraging partner networks, and creating glocal offers
Interact
Startups grow faster if they form relationships
They should use new and existing networks to locate and interact with potential customers, partners, & suppliers
Legitimize
Startups need to be believable and trustworthy in the eyes of customers, partners, suppliers and investors
They can do so through identity building (stories, analogies), association (relationships), and organization (achievement of milestones, leader profiles)
Source:
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Grow early, rapidly and securely
Scale
To scale is to build out channels, networks, and brand
Startups need to build flexible relationships with customers and investors, implement a growth path, and improve their capability to execute
Secure
Startups need to be secure, period
They must assess security risks to their venture, reduce supply chain risks, and address breaches promptly
Sell
Startups should adopt a learning mindset and lever customers as co-creators of new products
They do so by selling solutions and tailoring their offer
Source:
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Cybersecurity startups
Cybersecurity market is inherently global: therefore, cybersecurity startups must globalize to survive
What actions to globalize early have the greatest effect on the value of cybersecurity startups?
What actions to globalize are unique to cybersecurity startups (depend on a global resource: cyberspace)?
How can business development agencies improve the support they provide to cybersecurity ventures?
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What makes startups valuable?
To make a technology startup valuable to a stakeholder (customer, partner, etc.), the startup should act to:
Spread
Increase the spread between customers’ willingness to pay for its product and cost of the product
Demand
Increase the demand for its product
Complementarity
Increase the demand for the stakeholder’s products complemented by the startup’s product
Privileged information
Establish a position in inter-organizational networks that increases the volume, variety, timeliness, and accuracy of privileged information that is accessible
Judgment
Attract individuals who have the requisite experience and knowledge to create value for the startup
Source: Bailetti & Zijdemans (2014)
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How startups can globalize early
Niche market in 2+ continents
1+ global partners
Spread
Target a niche market where customers have a distinct set of cybersecurity needs
Participate in the development of global security standards
Demand
Use the web as a global sales channel to double product demand
Interact with partners with a global footprint to increase global demand for startup’s product
Comple- mentarity
Develop a product that complements products offered by incumbents
Target partners who would benefit from the complementarity of the startup’s product or service
Privileged information
Engage with members of virtual communities that attract customers and competitors
Use connections to partners
Judgment
Seek partners with global reach
Source: Bailetti & Zijdemans (2014)
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Challenge: Adopting AI and analytics
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Economics of prediction
As the cost of prediction decreases, prediction models help companies make better judgments
Open source frameworks and machine-learning-as-a- service makes prediction technology accessible
Not only is prediction cheaper, but as the quality of prediction improves, it becomes strategic
Thus, prediction will be used more and in unexpected places, enabling new business models
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Strategic uses of prediction
Template for a prediction strategy
Goal
Problem
Uncertainty
Judgment
Improving delivery times
Problem
How to improve delivery times without keeping an expensive inventory?
Uncertainty
Customer demand
Judgment
Better forecasting of local demand
Based on: Agerwal et al. (2018)
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Selecting startups at an accelerator
A prediction model that relates screening questions to startup success can help improve judgment
Initial screening
Final selection
Real
Market
Demand validation
Market demographics
Product
Concept maturity
Sales & distribution
Win
Competitive
Sustainable advantage
Team
Technology & expertise
Prior startup experience
Feedback mechanism
Worth
Growth
Growth strategy
Source: Yin & Luo (2018)
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Making better business decisions
Generating insights from product reviews
Mine business opportunities from social networks
Analyze value propositions of competitors by using text mining and topic modeling techniques
Generate qualified leads by predicting customer value
Prioritize security alerts businesses need to investigate
Predict security vulnerabilities of products
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Conclusion
In markets that are inherently global, startups must globalize early and rapidly to survive
As the cost of prediction decreases, prediction models help companies make better judgments
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References
Agrawal et al. (2018), Prediction Machines
Bailetti & Zijdemans (2014), Cybersecurity Startups: The Importance of Early and Rapid Globalization
Yin, & Luo (2018), How Do Accelerators Select Startups? Shifting Decision Criteria Across Stages, IEEE Transactions on Engineering Management
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Image credits
Unless noted, images were sourced from Wikimedia Commons and Flickr under a CC license
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