Saturday, April 27, 2013

A few thoughts on business model development and the path of the innovator

I've been focused for a lot of my career on the question of how to get science and engineering innovation out of the lab and into the commercial sphere where these innovations can begin to make a difference in people's lives. The greatest advances in research on green chemistry or health information technology, to use two disparate examples, won't have the benefit to people that its inventors envision unless there can be market validation and the resulting innovations can be shepherded, through some form of startup, into the hands of people. What these innovations need is some way of validating and their value to the world (market and customer validation) and a model through which that value can be translated into the world (a business model).

One of the recent and widely talked about business model tools, to help entrepreneurs test their business models--their mechanisms for producing value in the world--has been the business model canvas. A number of approaches have become popular for testing this business model in practice, broadly grouped under the the "lean startup" movement.

But if an innovation is coming from a broad research base, what is often missed is the necessary pre-work, the translation process between a broad base of research and the innovations that can result and become applications applied to particular markets.This stage is where I've been focused recently, and learning a lot through a collaboration with Dr. Judy Giordan at ecosVC. Our team has been honing our approach at the Center for Sustainable Materials Chemistry, primarily based in Oregon. But it's an approach that Judy has developed over a long career leading R&D for major companies. It's the role of a corporate CTO, translating between research and the market. I'm looking forward to reporting more as this work progresses.

The above graphic articulates what we call the Research to Innovation to Venture process. You can learn more about it at ecosVC. What I want to point out is that this innovation process is in parallel with the process that the innovator goes through. We often assume that entrepreneurship is binary. That you either are or you aren't. But in fact, people need to come to terms with their path, with their engagement with the process of innovation, and that coming to terms occurs in stages. And further, one needs to define one's role as well. Entrepreneurship is really a sport for teams, not solo practitioners. There are many roles that a scientist, an engineer (or really anyone) can take in advancing research through the innovation process and getting its value out there in the world, many ways of participating in the production of accomplishments. I'll report more specifics on our approach to this in the months ahead.

Monday, April 15, 2013

Who am I to correct Paul Krugman? But bitcoins ...

Who am I to correct Paul Krugman? But his piece on bitcoins is is a bit sloppy, it seems to me.

On the one hand he uses the Facebook twins to say that "bitbugs" believe in bitcoins because they're divorced from any social compact. This is just their silly talk and doesn't mean anything necessarily about bitcoins. Then he says that bitcoins are only valuable BECAUSE they are part of social compact, i.e. that people believe that they can be exchanged for goods. But he suggests this isn't sufficient, and that's what's good about "real" currencies, that they are backed by more than this--gold, which can be used for other things, or the backing of a government. THEN he says that of course gold and silver coins in years past were really just a representation of people's beliefs that they could be exchanged for real goods. If so, why aren't bitcoins just the equivalent and therefore at least as good as past methods of representing trading value?

I'm distinctly neither a bitbug nor a goldbug. I believe that currencies are fundamentally a social compact, and this notion that we can somehow make them neutral or mathematical is just silly. But, I also believe that bitcoins represent a fascinating experiment in crowdsourcing that social compact, rather than making such a social company overly-reliant upon a government or Federal Reserve which is in fact only made up of the assessments and actions of a highly select number of people.

Rebuttal to Krugman from Bitcoin Magazine: LINK.