Bringing innovation to market is hard but the processes that are used to achieve it are fairly well known.
Various rounds of funding are so common they have their own sectors of the finance industry – angel investments and venture capital for instance, or well-established names such as series A, B and C funding rounds, among others.
There are many people in Australia who are familiar with the process and even more in the United States and Europe.
Early investors recognise the risks and expect such high returns that two or three successes out of 10 will still make the pain of the seven or eight failures worthwhile.
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Any changes to the process that improve the success rate of the companies involved will dramatically improve returns and increase the amount of money available to invest in startup companies.
One area in which the process has changed little over the years is the random nature of the way in which entrepreneurs have had ideas.
Additionally, the process has relied on entrepreneurs having or finding ideas and entrepreneurs have become the focal point of the “system”.
An entrepreneur might begin a new tech company or a manufacturing company that becomes incredibly valuable, employs hundreds of people and produce significant profits.
On the other hand, they may end up running an innovative café or bar that employs far fewer people and makes much less profit.
Both are worthy pursuits and neither situation is “more worthy” than the other, but one scenario has a far wider effect on the country and the economy.
It stands to reason that we should be attempting to get entrepreneurs running companies that will have a big impact on the economy rather than just any company.
It’s time to change the way we do things.
The best way to do that is to change our focus from the entrepreneur to the innovation.
At the heart of any disruptive company is the innovation – the idea or technology that changes everything.
They’re brought to market by dedicated individuals and teams and by focusing on the innovation first, and then finding the team, we can take some of the randomness out of the process and improve the success rate of the commercialisation of innovation.
Our universities, research institutions and even our back sheds are full of great ideas, many with the potential to change the way we understand and do things.
It’s time we started getting them out of the labs and into the markets.
The link between business and academia in Australia is poor. So poor in fact that it is a critical weakness of the Australian economy.
They don’t really talk to each other and when they do, it can often be like they are talking a different language.
Business people are often so busy running their companies that they don’t have much time to spend talking to researchers and finding out what they have found and how it might lead to new products.
Researchers and academics on the other hand are often absorbed in their research and in fact are doing exactly what they want to be doing. They are often product focussed rather than focused on building a business.
A South Australian accelerator, Innovyz, has begun to make this transition to finding the innovation first, then connecting them with a great team.
They travel Australia, going to unis and labs, talking to academics and researchers, all the time seeking the best innovations and ideas in a given area.
Once they have found the best ideas, they put them through their nine month program where a company is formed, and they start to assemble a team to fill capability gaps.
They connect the team with mentors and help them think through their strategy. Innovyz helps the team understand their market, to write an information memorandum and help them to find investment.
This is not to say that entrepreneurs are not critical to the process – of course they are, but there’s not much point having a great entrepreneur with a dud innovation. Really good and useful ideas, almost by definition, solve a problem for society and facilitate the next steps.
Additionally, once we know that the idea is at the heart of innovation, it becomes easier to find great innovations because we can start to hunt them in an orderly and strategic manner.
No system is perfect and although the innovation system is well known and has provided tremendous benefits to our society and economy, things can always be improved.
Our innovation system is in need of innovation and a change of focus from the entrepreneur to the idea is precisely the innovation we need.