What is innovation?

Paolo Landoni
Paolo.Landoni@polito.it
https://www.linkedin.com/in/paololandoni
TWITTER: @paolo_landoni
Fate innovazione?
Avete esempi di innovazione?
E’ un buon momento storico per
fare innovazione?
Can you innovate in Italy?
 You are lucky to be in Italy!
Do the test at www.globalrichlist.com
or the test at How Rich Am I?
You are lucky to be alive today!

The world as 100 people over the last two centuries

https://ourworldindata.org/a-history-of-global-living-conditions-in-5-charts/
What is Innovation?
Case study: the Cola without sugar

Diet Rite (Royal Cola) Coca-Cola Light Diet Pepsi

An innovation is something ….

• New or significantly improved

• (Better)
• Used
 Innovation
Idea/Invention x execution/implementation

What do you need?

Creativity x Capabilities
“Mild success can be
explainable by skills and
labor. Wild success is
attributable to
variance.”
The single biggest reason why startups succeed | Bill Gross

Ted Talk: https://youtu.be/bNpx7gpSqbY

For whom?

• Users and producers (creating and capturing value)

• New to the company or New to the market

First mover advantage?

First-mover advantage?
First-mover advantage?
Coca-Cola: a successful late-mover

https://www.linkedin.com/pulse/coca-cola-so-radical-invention-paolo-landoni
Where?

Innovation typologies (OECD, 2005)

– Product
– Process
– Marketing
– Organisational
An innovation is the implementation of a new or
significantly improved product (good or service),
or process, a new marketing method, or a new
organisational method in business practices,
workplace organisation or external relations.
OECD «OSLO MANUAL» (2005)
Types of innovation

• A product innovation is the introduction of a good or service that is

new or significantly improved with respect to its characteristics or
intended uses. This includes significant improvements in technical
specifications, components and materials, incorporated software,
user friendliness or other functional characteristics.
• A process innovation is the implementation of a new or significantly
improved production or delivery method. This includes significant
changes in techniques, equipment and/or software.
• A marketing innovation is the implementation of a new marketing
method involving significant changes in product design or
packaging, product placement, product promotion or pricing.
• An organisational innovation is the implementation of a new
organisational method in the firm’s business practices, workplace
organisation or external relations.
Oslo Manual (OECD, 2005)
What about Entrepreneurship?
Are Innovation and Entrepreneurship
linked?
"The entrepreneur shifts economic
resources out of an area of lower and into
an area of higher productivity and greater
yield.“
- J. B. Say (around 1800)
 Entrepreneurship New Organizations

Entrepreneurs

Innovation
(intrapreneurship or corporate
Existing Organizations
entrepreneurship)
Intrapreneurs
Innovation is the specific tool of
entrepreneurs, the means by which
they exploit change as an opportunity
for a different business or a different
service
P. Drucker, 1985, p.18
Sheryl Sandberg Eric Schmidt
• Technological innovation?
• Design innovation?
• Cultural innovation?
• Social innovation?
• Business model innovation?
Can you innovate in nonprofit organizations?

What’s the difference between profit and

nonprofit organizations?
 Non profit

Hybrid
innovation Existing Organizations
Profit
Intrapreneurs
Public Administrations

Communities
Non profit

Entrepreneurs Hybrid
entrepreneurship New Organizations
Profit

(Public Administrations)
How much new? (newness)

• Radical VS incremental Innovation

• Disruptive VS sustaining innovation
• Architectural VS component innovation
• ….
How important are ideas?
Is Facebook based on a new idea?
Was Facebook the first Social Network?
The Social Network (2010)
 Social networking services

• [ The Globe (1994) ]

• [ Geocities (1994) ]

• SixDegrees.com (1997)

• Friendster (2002) Face book = web directory at

American University

• MySpace (2002) Kirkland House

• LinkedIn (2003)

• Facebook (2004)
Reid Hoffman Personal Investments (2002-2006)
Aug, 2006 Friendster $10M / Series C
Mar, 2006 Wikia $4M / Series A
Nov, 2005 RealTravel $1M / Seed
Oct, 2005 Digg $2.8M / Series A
Sep, 2005 if(we) $1.5M / Angel
May, 2005 Tiny Pictures undisclosed amount / Seed
Co-founded May, 2005 Facebook $12.7M / Series A
• Socialnet.com Jan, 2005 Ning by Glam Media $15M / Series A
in 1997
• LinkedIn in Sep, 2004 Facebook $500k / Angel
Dec 2002 undisclosed amount
Jun, 2004 Flickr
/ Undisclosed
(Paypal COO Jan, 2004 Socialtext $300k / Angel
2000-2002) Jan, 2004 Wikia undisclosed amount / Angel
Dec, 2003 Naseeb Networks undisclosed amount / Angel
Oct, 2003 Friendster $13M / Series B
Jan, 2003 Advent Solar undisclosed amount / Angel
Dec, 2002 Friendster $2.4M / Series A
Adapted from https://www.crunchbase.com/
Key points

• Was the idea new? Was Facebook the first Social Network?
• Did Mark copy the idea from the Winklevoss twins?
• Did Mark have
– a new concept / value proposition?
– capabilities?
– a strategy?
– financing?
– revenue streams?
– a mentor?
TIPS:

• Focalizzarsi su progetti in cui si ha un

differenziale in termini di execution!
• O dove si ha voglia di investire grandi
risorse per lungo tempo, cioè dove si ha
voglia di acquisire quel differenziale
• Serve saper rispondere in modo
convincente alla domanda: perché tu?
Is Nutella a product based on a new idea?

https://it.linkedin.com/in/paololandoni
Execution = attention to details
Google news for Tesla 6 Days Later
Details matter

"Reed College at that time offered perhaps the best

calligraphy instruction in the country," Jobs said when
he gave Stanford's 2005 graduation speech.
"Throughout the campus every poster, every label on
every drawer, was beautifully hand calligraphed…I
learned about serif and sans serif typefaces, about
varying the amount of space between different letter
combinations, about what makes great typography
great. It was beautiful, historical, artistically subtle in a
way that science can’t capture.“

Calligraphing like a monk gave Jobs an esthetic sense

most math-nerd tech giants (like Bill Gates) lack.

http://www.hollywoodreporter.com/news/steve-jobs-death-apple-calligraphy-248900
The best thing about ideas is that they are like
buses – there is always another one coming
Richard Branson
Virgin group founder
Genius is one percent inspiration, ninety-nine
percent perspiration
Thomas Edison
But ideas are important

"No matter what people tell you, words and ideas can
change the world." – Dead Poets Society (1989)
https://youtu.be/IZmCgKvTEG4 (1:09)

“There is one thing stronger than all the armies in the

world, and that is an idea whose time has come.”
– Victor Hugo

What is an idea and how to communicate it (7:56)

– Chris Anderson
Never doubt that a small group of thoughtful,
committed citizens can change the world;
indeed, it's the only thing that ever has.
- Margaret Mead