Innocentive. Com Executive Summary
InnoCentive.com
Technology Strategy
InnoCentive
InnoCentive.com is a challenge driven innovation website that was founded in 2001 by Elli Lilly’s Venture unit. Its objective is to connect companies (the “Seekers”) to independent inventors, scientists or simply people that like challenges and to earn some money out of it (the “Solvers”). On the website, Seekers can post “R&D Challenges” to which Solvers submit their solutions. The Solver(s) that will be deemed by the Seeker to have posted the best solution(s) will be granted with a financial reward. In this process, the InnoCentive scientific team works hand-in-hand with the Seekers in order to make sure the problem posted by the Seeker is articulated in a way to ensure that the …show more content…
problem is fully understood by the Solvers.
IC's Innovation Model
In our point of view IC’s model is essentially based on two key concepts: Crowdsourcing and Open Innovation. Thus, its advantages and success factors are closely related to those of the above terms.
When outsourcing a task or a problem to a “crowd” outside the company, the Seeker is able to access an enormous source of talent, ideas, and to a set of different perspectives of the same situation. If we bear in mind that InnoCentive is an Internet-based company, thus having the possibility of reaching almost everyone in the world, we are able to understand the potential of it.
On the other hand, an Open Innovation perspective also underlies the InnoCentive model. The beliefs that companies do not own all the talented people and that external R&D can generate significant value, which later can be used or not by the internal R&D to create added value to the company, are noticeable in the company business model. Furthermore, Seekers when posting their problems are convinced that their firm can profit from research even if it was not originated internally, and are even willing to buy other people’s IP if it can contribute to their company’s success.
InnoCentive when acting under these principles allows Seekers to be able to capture the knowledge and the distributed innovation that lies outside their company’s boundaries (Appendix 1).
Which problems should be posted?
First, considering the specificities of the “problem-solving” approach of IC, we can safely argue that companies should submit the problems that are possible to be broken down into specific practical problems so that seekers are motivated and able to work on it. For example, asking the solvers “we need to find an alternative source of energy” is too wide a question to be relevant since it does not state such a precise problem so that the Seekers are interested or even able to solve it. For the IC process to be effective, the Seeker should clearly expose what the description and requirements of the projects is and especially what the constraints are. To that extent, Solvers should not submit the projects that are in a too early stage to be exposed clearly enough to the crowd because it may bring some inefficient answers and a waste of “posting fees”.
Secondly, companies need to make continuity vs.
disruption arbitrage to define whether or not a project should be submitted on IC. If your R&D is part of a long-term strategy plan in a field of expertise that is well known by the company, then submitting it to IC may jeopardize the long-term view of the firm. However, IC should be used in case the company seeks for a “disruptive innovation” that would enable the firm to rapidly diversify itself in a “non-obvious” way. Besides, the flexibility and velocity of the IC community could also enable the firm to outpace its competitor in the launch of innovative products. These two approaches should nonetheless not be seen as separate approaches: the R&D department of a company would benefit from these two perspectives as they can “cross fertilize” as long term R&D can benefit from the “fresh view” of the IC community as these findings can be incorporated into more long term research.
Eventually, submitting a problem on IC, at a certain extent, means telling people what kind of R&D you have already achieved, the solutions you have explored, and why or why not you will continue to investigate these areas. Hence, IC raises some confidentiality and Intellectual property issues. Even though usually industries are looking for the same enhancement of their products and solving it on IC can be cheaper and quicker for you than for your competitors, companies should not submit their pioneering ideas because of mimicking
issues.
Motivations
Seekers
Often companies face problems that they are either not able to solve by resorting exclusively to their in-house resources or, if they are able to do so, they do it in a non-optimal way. In either way, by restricting the solutions to internal sources (R&D) companies are not only missing opportunities, but also money.
In this line, by extending the pool of solvers also to those outside the firm’s boundaries, the company will benefit from a broader array of people with more diversified backgrounds. InnoCentive being a platform that connects firms to a pool of worldwide “Solvers”, it enables companies to take advantage of the so-called crowdsourcing.
As so, it means a higher probability of problem resolution, and the possibility of getting not just alternative approaches, but more creative and robust solutions – for instance by combining different solution proposals. Moreover, one can consider that when firms refer problems to InnoCentive they are also somehow transforming a fixed cost – their R&D department – into a variable one – crowdsourcing. Even if one argues that crowdsourcing does not substitute completely a firm’s R&D department, at least it makes the costs related with innovation more flexible.
Ultimately, as the posting fees and prize money are most of the time cheaper than conducting an actual R&D project, it is possible to say that posting a problem can be a way for companies to mitigate R&D risks, i.e. if resorting exclusively to their R&D department, firms would incur in expenditures, whether the result would be finding or not a solution to the problem at stake.
Solvers
It is very important to understand that there is no single standard or profile of a solver: anyone could be a solver. Solvers are representative of a wide variety of fields such as academics, consultants, students, professors, private-sector participants and retirees. Nevertheless, it is possible to assume solvers are generally well educated people since 40% of solvers held PhDs, which are eager to learn and to be challenged.
It is not a single aspect that drives the solvers, but a combination of several factors. One of the factors is the prize motivation, the possibility to, in a short-term, gain a considerably amount of money. Currently there are challenges awards which reach 1.000.000 $. Furthermore, another very important factor that is mentioned by several solvers is the achievement, the sensation they get when a challenge is solved. This accomplishment feeling is even stronger when solving the challenge contributes in some way to improve the overall society (for example a challenge for discovering an important drug which could heal thousands of people) . Additionally, solvers are in most of the cases motivated by the problem itself (if they considered it challenging and interesting enough) and by the competition factor, the possibility of wining against hundreds of solvers worldwide.
The collaboration initiative has brought other important motivations factors to the solvers. The possibility of being recognized by the Innocentive community not only arouses motivation of being part of a community or a team but also awaken motivations of higher status and ego. The profile system allows solvers to communicate to the rest of the community what projects they are engaged on and the awards they won. It is noteworthy to state these several motivation factors mentioned above would hierarchically change from solver to solver.
Collaboration
The collaboration between solvers arise potential benefits but also risks that must be take into account. In order to better understand the potential gains and drawbacks of such approach is important to focus once again on the motivations of both seekers, solvers and of IC itself. Therefore, we decided to point out the main advantages and risks in the following table to allow a better analysis of the collaboration challenge.
| Advantages | Risks | Seekers | More optimal, robust and creative ideas - as a team of solvers from different backgrounds is expected to lead to more innovative solutions (building on the idea of other concept, brainstorming and cross changing of knowledge, expertise and experiences); | Risks related with IP transfer to the Seekers;In the same challenges the prize could increase; | Solvers | The profile system arouses other motivation factors – e.g. factors related with being part of a community or a team. It could be an advantage since increase the belonging feeling of the IC community;Empowering the solvers that have been asking for this capability;Increase the learning and knowledge of solvers;The profile system might lead to ego and status motivations factors which could be good if it means that solvers would be even more enthusiastic in solving challenges; | Conflicts may arise between solvers due to idea or prize conflicts ;There might be problems in the repartition of the prize within a team, e.g. people might argue that since their contribution was higher than the other team mates, they should be awarded with a bigger part of the prize;If are created very strong teams it might discourage other teams or individual solvers to participate in challenges; | Innocentive | If collaboration actually leads to richer solutions, consequently it will lead to more Seekers (which translate in more money to IC);Contribute to better and more knowledge of SolversBring more Solvers to the community;The increase of prize will benefit IC since they have a commission on prizes. | IC may have to intervene in case of disputes;Although they already have the technology available IC has to make some changes and possible to spend some money in order to implement collaboration |
After analyzing the table we consider IC should implement collaboration. We believe the advantages are clearly stronger than the drawbacks. The possibility of creating more optimal and creative solutions is an opportunity IC, Seekers and Solvers should not ignore it. Additionally, we consider that the risks collaboration that may arise could be easily diminished by a careful and gradual implementation of collaboration.
One of the most relevant risks is the one related with IP transfer so IC should focused on the guidelines and laws necessary to implement a successful transfer independently of the situation or the team. The company should clearly define when and in what situation IC should intervene in a team conflict. Consequently, if IC concentrates in the risks above mentioned we think collaboration could be a very successful solution for all stakeholders.
Appendix
Exhibit 1 – “Crowdsourcing” as an Extention of Producer Innovation
Technology Strategy
InnoCentive
InnoCentive.com is a challenge driven innovation website that was founded in 2001 by Elli Lilly’s Venture unit. Its objective is to connect companies (the “Seekers”) to independent inventors, scientists or simply people that like challenges and to earn some money out of it (the “Solvers”). On the website, Seekers can post “R&D Challenges” to which Solvers submit their solutions. The Solver(s) that will be deemed by the Seeker to have posted the best solution(s) will be granted with a financial reward. In this process, the InnoCentive scientific team works hand-in-hand with the Seekers in order to make sure the problem posted by the Seeker is articulated in a way to ensure that the …show more content…
problem is fully understood by the Solvers.
IC's Innovation Model
In our point of view IC’s model is essentially based on two key concepts: Crowdsourcing and Open Innovation. Thus, its advantages and success factors are closely related to those of the above terms.
When outsourcing a task or a problem to a “crowd” outside the company, the Seeker is able to access an enormous source of talent, ideas, and to a set of different perspectives of the same situation. If we bear in mind that InnoCentive is an Internet-based company, thus having the possibility of reaching almost everyone in the world, we are able to understand the potential of it.
On the other hand, an Open Innovation perspective also underlies the InnoCentive model. The beliefs that companies do not own all the talented people and that external R&D can generate significant value, which later can be used or not by the internal R&D to create added value to the company, are noticeable in the company business model. Furthermore, Seekers when posting their problems are convinced that their firm can profit from research even if it was not originated internally, and are even willing to buy other people’s IP if it can contribute to their company’s success.
InnoCentive when acting under these principles allows Seekers to be able to capture the knowledge and the distributed innovation that lies outside their company’s boundaries (Appendix 1).
Which problems should be posted?
First, considering the specificities of the “problem-solving” approach of IC, we can safely argue that companies should submit the problems that are possible to be broken down into specific practical problems so that seekers are motivated and able to work on it. For example, asking the solvers “we need to find an alternative source of energy” is too wide a question to be relevant since it does not state such a precise problem so that the Seekers are interested or even able to solve it. For the IC process to be effective, the Seeker should clearly expose what the description and requirements of the projects is and especially what the constraints are. To that extent, Solvers should not submit the projects that are in a too early stage to be exposed clearly enough to the crowd because it may bring some inefficient answers and a waste of “posting fees”.
Secondly, companies need to make continuity vs.
disruption arbitrage to define whether or not a project should be submitted on IC. If your R&D is part of a long-term strategy plan in a field of expertise that is well known by the company, then submitting it to IC may jeopardize the long-term view of the firm. However, IC should be used in case the company seeks for a “disruptive innovation” that would enable the firm to rapidly diversify itself in a “non-obvious” way. Besides, the flexibility and velocity of the IC community could also enable the firm to outpace its competitor in the launch of innovative products. These two approaches should nonetheless not be seen as separate approaches: the R&D department of a company would benefit from these two perspectives as they can “cross fertilize” as long term R&D can benefit from the “fresh view” of the IC community as these findings can be incorporated into more long term research.
Eventually, submitting a problem on IC, at a certain extent, means telling people what kind of R&D you have already achieved, the solutions you have explored, and why or why not you will continue to investigate these areas. Hence, IC raises some confidentiality and Intellectual property issues. Even though usually industries are looking for the same enhancement of their products and solving it on IC can be cheaper and quicker for you than for your competitors, companies should not submit their pioneering ideas because of mimicking
issues.
Motivations
Seekers
Often companies face problems that they are either not able to solve by resorting exclusively to their in-house resources or, if they are able to do so, they do it in a non-optimal way. In either way, by restricting the solutions to internal sources (R&D) companies are not only missing opportunities, but also money.
In this line, by extending the pool of solvers also to those outside the firm’s boundaries, the company will benefit from a broader array of people with more diversified backgrounds. InnoCentive being a platform that connects firms to a pool of worldwide “Solvers”, it enables companies to take advantage of the so-called crowdsourcing.
As so, it means a higher probability of problem resolution, and the possibility of getting not just alternative approaches, but more creative and robust solutions – for instance by combining different solution proposals. Moreover, one can consider that when firms refer problems to InnoCentive they are also somehow transforming a fixed cost – their R&D department – into a variable one – crowdsourcing. Even if one argues that crowdsourcing does not substitute completely a firm’s R&D department, at least it makes the costs related with innovation more flexible.
Ultimately, as the posting fees and prize money are most of the time cheaper than conducting an actual R&D project, it is possible to say that posting a problem can be a way for companies to mitigate R&D risks, i.e. if resorting exclusively to their R&D department, firms would incur in expenditures, whether the result would be finding or not a solution to the problem at stake.
Solvers
It is very important to understand that there is no single standard or profile of a solver: anyone could be a solver. Solvers are representative of a wide variety of fields such as academics, consultants, students, professors, private-sector participants and retirees. Nevertheless, it is possible to assume solvers are generally well educated people since 40% of solvers held PhDs, which are eager to learn and to be challenged.
It is not a single aspect that drives the solvers, but a combination of several factors. One of the factors is the prize motivation, the possibility to, in a short-term, gain a considerably amount of money. Currently there are challenges awards which reach 1.000.000 $. Furthermore, another very important factor that is mentioned by several solvers is the achievement, the sensation they get when a challenge is solved. This accomplishment feeling is even stronger when solving the challenge contributes in some way to improve the overall society (for example a challenge for discovering an important drug which could heal thousands of people) . Additionally, solvers are in most of the cases motivated by the problem itself (if they considered it challenging and interesting enough) and by the competition factor, the possibility of wining against hundreds of solvers worldwide.
The collaboration initiative has brought other important motivations factors to the solvers. The possibility of being recognized by the Innocentive community not only arouses motivation of being part of a community or a team but also awaken motivations of higher status and ego. The profile system allows solvers to communicate to the rest of the community what projects they are engaged on and the awards they won. It is noteworthy to state these several motivation factors mentioned above would hierarchically change from solver to solver.
Collaboration
The collaboration between solvers arise potential benefits but also risks that must be take into account. In order to better understand the potential gains and drawbacks of such approach is important to focus once again on the motivations of both seekers, solvers and of IC itself. Therefore, we decided to point out the main advantages and risks in the following table to allow a better analysis of the collaboration challenge.
| Advantages | Risks | Seekers | More optimal, robust and creative ideas - as a team of solvers from different backgrounds is expected to lead to more innovative solutions (building on the idea of other concept, brainstorming and cross changing of knowledge, expertise and experiences); | Risks related with IP transfer to the Seekers;In the same challenges the prize could increase; | Solvers | The profile system arouses other motivation factors – e.g. factors related with being part of a community or a team. It could be an advantage since increase the belonging feeling of the IC community;Empowering the solvers that have been asking for this capability;Increase the learning and knowledge of solvers;The profile system might lead to ego and status motivations factors which could be good if it means that solvers would be even more enthusiastic in solving challenges; | Conflicts may arise between solvers due to idea or prize conflicts ;There might be problems in the repartition of the prize within a team, e.g. people might argue that since their contribution was higher than the other team mates, they should be awarded with a bigger part of the prize;If are created very strong teams it might discourage other teams or individual solvers to participate in challenges; | Innocentive | If collaboration actually leads to richer solutions, consequently it will lead to more Seekers (which translate in more money to IC);Contribute to better and more knowledge of SolversBring more Solvers to the community;The increase of prize will benefit IC since they have a commission on prizes. | IC may have to intervene in case of disputes;Although they already have the technology available IC has to make some changes and possible to spend some money in order to implement collaboration |
After analyzing the table we consider IC should implement collaboration. We believe the advantages are clearly stronger than the drawbacks. The possibility of creating more optimal and creative solutions is an opportunity IC, Seekers and Solvers should not ignore it. Additionally, we consider that the risks collaboration that may arise could be easily diminished by a careful and gradual implementation of collaboration.
One of the most relevant risks is the one related with IP transfer so IC should focused on the guidelines and laws necessary to implement a successful transfer independently of the situation or the team. The company should clearly define when and in what situation IC should intervene in a team conflict. Consequently, if IC concentrates in the risks above mentioned we think collaboration could be a very successful solution for all stakeholders.
Appendix
Exhibit 1 – “Crowdsourcing” as an Extention of Producer Innovation