Exam L5-L7 Flashcards
Role of portfolios:
EVALUATE current innovation activities
Guide resource allocation DECISIONS
Identify areas for IMPROVEMENTS
Goal-oriented control through prediction =
Goal-oriented control through prediction
= “To the extent we can predict the future, we can control it”
Means-based control =
Means-based control
= “To the extent we can control the future, we do not need to predict it”
SCALING FOR DIGITAL VENTURES
When is there a need for scaling?
When is there a need for scaling?
- Low Margins
- Network effects
SCALING FOR DIGITAL VENTURES
To enable Scaling:
To Enable Scaling:
- Building upon digital infrastructure
- limited human involvement and material use
Versatile resources =
Versatile resource: (In contrast to RB-view)
* The more versatile the venture’s resources are …
* …the lower adjustment cost firms face, as versatile resources invite for reuse, recombination, and removal of barriers of learning
= assets that can be changed for different purposes, they increase a firm’s combinative possibilities and thus expand its productive opportunity set.
Versatility of the digital core of digital ventures
.. can be traced to two aspects of digital technology.
Two aspects of digital technology that allow for Low adjustment cost
Versatility of the digital core of digital ventures
Two aspects of digital technology that allow for Low adjustment cost
- Design Flexibility
The stored program concept: programmability offers significant design flexibility as the product can be repurposed with as little as a new set of instructions - Design Scalability:
Digital content such as data and instructions are reproducible at zero marginal cost (scope for scaling)
Digital Ventures =
Digital Ventures = enterprises with a digital artefact at the core of their market offering.
Digital core = digital artefact.
- It can be a platform, algorithms, voice recognition technology, or any other pieces of technology.
- For instance, Uber: driver-rider matching algorithm
Resource-based view:
Resource-based view: Isolate the competitive advantage of resources at the expense of flexibility required for future resources reconfiguration
The Extension Process
Based on two main entrepreneurial processes:
The Extension Process
Based on two main entrepreneurial processes:
- Productive Opportunity Creation
= the development of business opportunities in unserved market segments through entrepreneurial imagination - Opportunity Actualization
= to the realization of productive opportunities through managerial action.
Productive Opportunity Creation + Opportunity Actualization
Possible implications:
Productive Opportunity Creation + Opportunity Actualization
Possible Implications:
1. Digital ventures can create a multitude of entrepreneurial opportunity with a low adjustment cost at a short time (related to design flexibility of core).
* Digital core can develop one line of business, while developing another.
- Digital core promises to facilitate opportunity actualization, as it allows effective re-use of prior versions in the new market.
* The combination of effortless re-production and design flexibility promises quicker and speediar actualization of productive opportunities
The Process of Concepting =
Concepting = the deployment of the digital core in designing and experimenting business concepts for a new venture
Process of Porting
Porting = the specialization of a venture’s digital templates to actualize productive opportunities with minimal adjustment cost.
Process of Generalizing
Generalizing = the creation of general solutions for specific sub-problems that can be reused and adapted in the development of derivative digital products.
Crowdsourcing for Innovation:
Problems:
Crowdsourcing for Innovation:
Problems:
1. Too many ‘good’ ideas?
* Attention is limited. Organizations can only pay attention to a subset of suggestions
* Organizations with inadequate techniques for handling suggestions may: Miss out on key ideas
- NOT paying attention to more distant (further) solutions
- Ideas may not fit organizational goal
When are crowds collectively smart?
When are crowds collectively smart?
When 3 criteria are met:
1) diversity of opinion,
2) independence
3) decentralization
User’s’ Motivation to Innovate
- Often solving their own problems
- Strong intrinsic motivation
- Sensitive to ‘sense of community’
KEY ELEMENTS OF COMMUNITY DESIGN
- Shared interest:
Resource commons or common goals. - Collaborative values:
Willingness to share knowledge, contribute to the success of fellow community members, and seek fairness in community contributions and the distribution of rewards - Community-oriented leadership:
A focus on facilitating community growth and sustainability, member collaboration, and promotion of collaborative values and practices - Expandable commons:
Knowledge and other resource pools that all members can contribute to and draw from - Protocols and infrastructure that support member collaboration:
Systems, processes, and norms that support both direct and pooled collaborative relationships among members
Crowdsourcing for Innovation
What manufacturers can do:
What manufacturers can do:
* Produce user-developed innovations for general sale
* Offer user innovation kits/ product design tools / platforms
* Sell complementary products or services
Why difficult to protect Intellectual Property for crowdsourcing?
- Patenting typically not applicable
- Copyright also problematic
o Who has contributed what?
o Even if that is clear, how to enforce? - Often spanning geographical and jurisdictional boundaries
Law based Intellectual Property =
punishment= civil law penalty
- Patents = no one else may use invention without license of owner)
- Copyright = applies to writing and images, e.g., proprietary software vs. copyleft software that aims to preserve the openness of the software
- Right to protect trade secrets (e.g. employees legally bound by contract not to reveal firm’s trade secrets)
Norm-based Intellectual Property =
Norm-based Intellectual Property = operate entirely on basis of implicit social norms that are held in common by community members - e.g. protection of recipe
* Punishment: loss of status, shaming, denial of community benefits
Communities are useful when:
Innovation problem involved cumulative knowledge, continuously building on past advances.
Closed Innovation
Characteristics:
The smart people in the field work for us
To profit from R&D we must discover it, develop it, and ship it ourselves
If we discover it ourselves, we will get it to the market first
the company that gets an innovation to the market first will win
If we create the most and the best ideas in the industry we will win
We should control our IP, so that our competitors don’t profit from our ideas
