We live in a time of incredible technological change. It is characterized by significant dislocations of people, political infrastructures, capital formation, and material resources. It is fueled by significant investments in innovation and entrepreneurship at levels of public and private funding. The dimensions are global and empowered by enabling forces such as the Internet, Facebook, Twitter, Google, and a seemingly endless list of social media-based design and communication tools. They use a new vocabulary that enables rapid and international levels of collaboration. The implications of all this are just becoming understood.

The stage is set for this book’s premise in the first chapter. It starts with a suspicion that we look to innovation and entrepreneurship as directions to confront declining manufacturing bases, shortages of raw materials, environmental concerns, and a significantly changing global mix of wealth distribution. The attention to innovation has produced many new ideas and visions for directions ahead. The attention and the methods for converting those ideas to commercial reality have lagged behind.

This book argues that commercializing technology can be accomplished more efficiently and with greater probability of success than it has been done before. Enabling tools and information are more prevalent than ever. Methods that worked in the past to bring technology to market in various forms no longer work as well as they once did. Even still, we persist in employing them.

What works better now, for example, is to seek ideas for commercialization from multiple sources. Then, to consider the alternatives for creating commercial pathways to get products and services to the market based on unifying goals and visions. To accomplish this we need to look at the overall process of moving ideas to market reality.

First, how did we get to this point? It can be argued that things evolved as they did based on a somewhat stable model of economic order. Industrial strength was centered in the United States and Europe. Material resources were consumed by these nations from what seemed a limitless supply. Much of the new wealth created was built on the backs of impoverished nations like China, India, and South Africa. Although the riches of this approach were unevenly distributed, the model seemed to work. Today, forces like unemployment, poverty, large gaps in wealth, insufficient healthcare delivery and education, and diminishing resources like energy (and its impact on the environment) also share the stage of world economic concerns.

We simply have to do better! Uneven distribution leads to an unequal capacity to change. Investments in education, Internet-based communications, and formal research and development are so disparate that they make it difficult to create new solutions.

Books, articles, professors, and pundits worldwide expound constantly on the need to promote innovation and entrepreneurship. These, we are told, will help sort out a new world order and provide more wealth and opportunity for all. Perhaps, but in my view, the current level of innovative ideas coupled with less disruptive entrepreneurial initiatives may not be sufficient to provide a better economy for all. Incremental gains fall short when we need more dramatic returns on innovation. Educators, business leaders, and innovative change agents must focus on improving the probability of success of their projects so that usable ideas come to the marketplace.

The attention to innovation has brought with it a flood of well-intentioned resources into focus. It has also brought with it a commoditization of our attention. An example is a project I worked on while serving as a consultant to the Technology Transfer Office of Children’s Hospital in Boston (CHB). It was observed that bringing ideas to the pediatric market would be enhanced by a collaboration among six leading pediatric hospitals in the country. We coined a name for this project and called it the Institute for Pediatric Innovation (IPI). To ensure that we weren’t infringing on someone else’s trademark, we asked our attorney if we could use that name. She researched the name and said it was okay, but she also reported that there were 96 organizations in the greater Boston area alone that used the term “innovation” in their titles—wow!

We have more innovative ideas every day but, paradoxically, fewer life-changing breakthroughs. We are hamstrung by business models that reflect a prior age and rely on quarterly performance rather than metrics of innovation and change. An example might be in the automotive industry where yearly model changes are characterized by changes in color, name, and incremental feature modification. Disruptive changes do not appear to be part of the model.

Many innovators believe the best way (and maybe the only way) to commercialize an innovation is to start a new company. As this book will show, there are multiple pathways to bring ideas to market. Paying attention to how ideas reach commercial reality, the focus of this book, can change the game for innovators, entrepreneurs, and customers. You will learn more ways to bring products and services to market, helping speed the process of innovation and providing the potential for the dramatic breakthroughs we need to keep technology and society both progressing. Best of all, you’ll learn new models that promise improved probabilities of bringing your ideas to the market successfully.

Waypoints in Innovative Commercialization

As with all complex stories, the history of technology commercialization is not smooth and continuous. Innovative ideas have been with us since the beginning of time. Cavemen struck flint stones against rock to create fire in their caves. The fire was used for warmth and for cooking food. If fire were the only outcome, the story would have been lost in the noise of history. That there was not a complementary sustainable value proposition in food and shelter, the importance of flint and rocks would have been trivial.

In this story, certain historical “waypoints” are worth noting.

They will help us look at several models of innovation to see if there are “lessons learned” that will help us develop models for going forward. A starting point is the work of W. Edwards Deming, who has a method for improving the quality of our manufactured products that seems both innovative and disruptive. His work was generally rebuffed in America but later embraced by Japan.

W. Edwards Deming and Innovative Change

Let’s start with W. Edwards Deming. Born in 1900, he was trained as a statistician. He practiced in both government and industry. His mantra was the application of a rules-based statistical approach to quality. While working with the Ford Motor Company in Dearborn, Michigan in the 1980s, he observed that Ford product components that were built in Japan performed better than those built in America. They also had fewer customer complaints.

While advising management at the Nashua Corporation’s disk drive manufacturing plant in Nashua, New Hampshire, he learned that even hard-to-measure aspects like “soft” (hard to quantify) defects in memory disk production could be remedied through statistical quality control techniques.

Deming had additional successes on U.S. soil. But as powerful as his insights were, American Industry did not embrace his methods. Japan did! He applied his work to basic Japanese industries, such as the automotive and heavy machine tool segments. The “waypoint” in this story is stark: Deming’s success abroad highlighted the apparent loss of focus by America’s industrial giants, resulting in its loss of markets, manufacturing capacity, and innovation.

The United States had the largest capacity in the world to manufacture automobiles. Toyota was an unheard of brand forty years ago. It was perceived to produce inferior products. By embracing the innovative changes championed by Deming, Toyota became the world leader of quality-based cars and achieved dramatic market share penetration in a few years.

With increased quality in Japanese products came customer acceptance, and soon Japan became the hallmark of high-quality hard goods such as automobiles, appliances, and machine tools. Today, many Japanese manufacturing plants extol the Deming philosophy and tout statistical control charts, herringbone (supply chain quality maps), and direct shop-floor control over processes in their passion for quality. America and Europe are now catching up, but they have a way to go.

Toyota emerged as a leader in this race and eventually produced the Lexus automobile which, for the last seven years, has achieved number one status in the J.D. Power customer satisfaction rankings. During this period, Mercedes, which had been in the top position historically, slipped to number seven. American-built vehicles shifted to the middle positions. Is this as simple as Deming’s influence? Probably not, but his influence and his compelling energy to create quality is seen as the enabling power to erode what seemed an unstoppable technological and industrial dominance by America and Europe. This discussion extends beyond automobiles to hard industrial goods to televisions (GE and RCA were replaced by Sony, Sharp, Hitachi, Toshiba, Mitsubishi, Panasonic, and Samsung). The formerly entrenched industry leaders have disappeared entirely from the horizon.

Why look back to the 1900s and the Deming era? It is simple. Doing so provides an extraordinary lesson about the importance of not only embracing innovative change, but also the value of bringing the benefits of those changes and the resultant benefits to their customers. A recurring theme is that innovation is not only a creative aspect of creative skills and change, but it also brings value perceived by customers that can be converted to financial profits and market share metrics.

Walmart Expands While Manufacturing Nothing: A New Innovation Model Emerges

So far it would seem as if the journey were characterized by technological or industrial innovative strengths alone. Hardly, as the next “waypoint” shows. Sam Walton started Walmart in 1962. Its corporate headquarters are located in Bentonville, Arkansas. Walton worked in the retail business (JC Penney) and was determined to provide the consumer with a better deal. His was a crusade to change the retail shopping model. Clayton Christensen at the Harvard Business School would have coined this a disruptive change, yet, the gains were all in the supply chain and going to market customer issues. Central to his model was the creation of “super stores” that would allow large movement of goods globally and thus give the company better purchasing power. Not only was the idea innovative, but Walton brought the model to commercial realization at a level that became a new standard of retail efficiency. Innovative change is not constrained to those driven by technology. Walton clearly shows it can happen in commercial “go to market” and with novel distribution models.

This approach has not been without controversy. Communities resisted the creation of “big box” stores because of the perception that higher wage local jobs were undermined by the lower wages that a Walmart offered. They also raised concern that local businesses located near Walmart stores would go out of business. But the company prevailed and continues to flourish.

Today Walmart has operating revenues of $470 billion and a net income of $17 billion. It employs 2.2 million people. Embedded in the Walmart model is the innovative use of Radio Identification Tags (RFID), which allow it to “track” customer sales at the moment of the transaction. If a consumer purchases an item off a shelf in New Haven, Connecticut, the computerized system notifies a manufacturing plant in Xianju, China of the sale. Multiple sales signal an increase in demand and the plant increases output. Note China’s role in this. In addition to being an example of disruptive change, Walton reflects the accelerating loss of America’s manufacturing dominance and spotlights our need for additional models of commercialization to compete.

Why focus on Walton in a text on technology commercialization? Walton was an icon of innovation. In many ways he personified the soul of what we hope to accomplish in our innovative endeavor. Bentonville is hardly Silicon Valley or Route 128. Walton drove his ideas to commercial reality. Far from a perfect model, Walmart did alter the landscape of how we do retail business.

Thomas L. Friedman, renowned author and writer for The New York Times focuses on Walmart in his award-winning book, The World Is Flat. He observes that Walmart doesn’t make anything. It simply distributes and sells products made from all over the world and offers them at low prices. However, the lower wages in China became a significant lure for Walmart to sustain its economic model. In 2007 Annual Report, the World Trade Organization (WTO) reported that Walmart imported $27 billion dollars of goods from China and was responsible for 11% of the United States-China trade deficit. More important, it was responsible for the loss of 200,000 American jobs during this period.

Lexus vs. Ford

Certainly, there are multiple examples of the impact of innovation to measurable commercialization. An interesting one again occurs in the automotive industry, and it reveals another important aspect of economic dislocation. I use this example in my classes in Technology Commercialization at Worcester Polytechnic Institute (WPI). It immediately engenders a discussion on the economics of innovative commercialization.

Let’s look at a mundane example: it is the assembly of the exterior door handles in the high-end Lexus Model 460 and the Ford Explorer. The former sells for over $80,000 and the latter for $25,000. The exterior door handles in both models are secured by two screws. According to the Bureaus of Labor Statistics 2012 labor compensation report, the labor rate for hourly workers in the Lexus Company’s modern Tahra Plant in Aichi, Japan, is approximately $18 per hour. At Ford, the worker in its mature Chicago, Illinois, facility receives a “loaded” $75 dollars per hour (hourly wage plus benefits). What is so fascinating about this is that the Lexus products have clearly distanced themselves from Ford and other manufacturers in terms of perceived quality. The difference is partly explained by the impact of accumulated union negotiations and workplace regulatory considerations contrasted to a lean manufacturing environment. The real impact on the new global competition is significant. We must find a better way. The wage differential in various global sites may completely dominate the discussion of how ideas come to market.

This litany of “waypoints” suggests that the journey to the new global competition is a continual one comprised of multiple and incremental steps and changes. It is certainly not as simple as one day realizing that the players have all shifted on the international stage. It is a gradual and continuous process.

Enter Innovation

Focusing on the automotive industry for a moment allows us to observe one more important element in the journey from ideas to commercial reality. It is the role of innovation. America has the largest capacity to manufacture automobiles in the world. Yet, the innovative Prius hybrid-powered automobile was developed and manufactured in Japan by Toyota. America simply didn’t “get it.” The Prius is possibly the first significant innovative change in the automotive industry since the Otto cycle engine was shown to be an adequate source of propulsion. The early engines were introduced in the late 1800s. Fuel consumption was not even considered a design criteria. In the 2000s this changed dramatically. The Middle East exerted its ability to regulate oil production and flow to the consumer. That, naturally, boosted the price per gallon/liter considerably. As these economic tides shifted and the consumer’s attention to fuel efficiency (and the environment) occurred, Toyota launched the Prius. It features a gas/electric propulsion system that allows the driving load to be shared by two different technology systems—the internal combustion engine and the electric motors. Forty miles per gallon became the norm. Today there are over one million Prius vehicles on the roads in America. Europe pursued a different path toward efficiency with diesel engines, but these are not as novel and innovative as the Prius. Innovation, in this case, was aptly rewarded with a new and robust market share.

Where was Detroit in all of this? It seems they were bound to the status quo. Perusing the annual reports of the “Big Three” manufacturers in the early 1960s reveals modest R&D expenditures (as a percentage of sales) amounting to 2–3%. By contrast, Silicon Valley enterprises are in the 9–11% range.

If innovation can be simply characterized by change of technology, design, speed, cost, and social impact, perhaps the greatest evidence can be seen in the applications of computer technologies. The list of examples is nearly endless, but are best seen in several broad categories.

The first is in the somewhat invisible use of computers in what is referred to as “embedded” applications. This includes the automobile. The average number of processors in a modern vehicle equals about 17. Processors are used to control engine performance, environmental concerns, radios, lights, and even seat locations. Other hidden (embedded) applications include appliances, thermostats, medical devices, cameras, musical instruments, and many others. In most cases, the performance of the application improves and costs are reduced—wow. In addition, these changes happen so quickly that they outstrip the normal product lifecycles of the technology.

A second category of change engineered in computer applications is through use of computation in the hardware and software that extends the use of the devices. Included are speech recognition, graphics- and sound-based applications (music), and games. Of course, the use of computers in information technology and data processing is enormous and expanding. Within the space of computer science, there has emerged a discipline called data mining. It is derived from the analytics of large data business tools of the 1960s, such as the use of Bayesian thermos and regression analytics. As the amount of data we create and use increases, better techniques and computer-based tools that have increased computational capacity have emerged. Data mining allows the data to be analyzed to find patterns and applications.

An extension of this category is in hardware applications like robotics, automation, and rapid prototyping. Each of these requires significant computational capacity that is faster, more technically competent, and driven by lower cost. Venture-backed commercialization projects were based toward computers and their enabling technologies. Investments were in semiconductors, disk drives, displays, and minicomputer (that is, Digital Equipment Corporation—DEC) manufacturers. Today there has been a significant change to software and applications firms.

The last—and somewhat overwhelming—use of computers is social media. Facebook, Google, Twitter, and the use of MP3s (for music) are some examples. Simultaneously, the emergence of the Cloud as a real-time storage and program source is accelerating. Pundits of the industries they serve agree that all these examples of innovation represent just the beginning of the new wave of applications and aren’t the long-term game changers. New social, political, and legal applications are reported each day. Apps are bountiful and seem to overwhelm the existing capacity to fund and staff the rate at which their organizational models appear. It’s truly the Wild West of technology applications. The ease of entry for these new applications is both good news and not so good news. On the plus side, almost every conceivable application can find market segments to serve. On the other side, the ability to create sustainable value propositions seems elusive. Traditional barriers to entry are nonexistent. Either the secure intellectual property assignments or the long-term sustainable value advantages seem elusive and thus distant to the traditional technology-based investments.

Innovation Practitioners

Although we may revel in the accomplishments of the individuals who successfully brought new ideas to commercial reality, it is also important to realize the role of the infrastructure and institutional models that support the process of commercialization.

As innovative solutions emerge as a national and priority, there are many examples of how the U.S. government is supporting change. One example is the Small Business Innovation Research (SBIR) program. Its goals are:

• To spur technological innovation in the small business sector
• To meet the research and development needs of the federal government
• To commercialize federally funded investments

Roland Tibbetts, the program founder, was quoted in an appeal to Congress for continuance of the SBIR (May 28, 2008) as saying that “ideas, however promising, are still too high risk for private investors, including venture capitalists.” A hallmark of the program is that it disburses increasing amounts of money to promising projects in three phases. Funds increase as the idea progresses from idea to commercialization in measured phases. Annual disbursements exceed $100 million and are distributed through 11 federal agencies. Impressive technology-based companies, like Qualcomm, da Vinci Surgical Robots, and iRobot (Roomba robotic vacuum cleaners) were started with this source of funding.

One ponders the role of government in this process. Traditional risk models guiding venture and angel investors seem unable to reach into the early-stage potential. Although there are multiple successful examples, is it the role of public funding to assume that risk? The dimensions of current funding are enormous. For example, in addition to the SBIR funding models, there are also other, similar programs in the United States. such as the Small Business Technology Transfer (STTR) program. That program also disburses $100 million in funding for specific technology-based projects.

The corporate world has its share of contributors to innovation research. Certain companies have invoked a culture that allows them to sustain the model of innovation. 3M Corporation in St. Paul, Minnesota is an example. For more than 100 years, it has continually introduced new and disruptive products and services to the market. Wet and Dry sandpaper, Scotch Tape, and Post-it Notes are just three examples. They were not perfect in how they came into fruition. Post-its, for example, came from a manufacturing defect of a batch of substandard adhesive that was about to be discarded. It didn’t seem to stick very well. The product was almost stopped internally until an administrative assistant used it for her own short-term note applications that utilized the short adhesive properties and validated the product’s to management. Today, it is a standalone industry. At least one element of the commercial cycle allows for intuitive and opportunistic events. It is not in contradiction to more disciplined approaches, just an allowance for it on an array of potential project offerings.

Apple’s Innovative Culture

Although 3M examples have been a consistent benchmark in the story of innovation, today there is a data point that overshadows most others. In a world that is characterized by accelerating and rapid change and innovation, the personal computer and complementary electronics continue to lead. Within that group, Apple stands out. Started by Steve Wozniak and Steve Jobs, its original vision was to deploy innovative, user-friendly computers to the average user. The two constantly challenged themselves and others to be innovative in their design and anticipate customer demand. The goal was to offer solutions that exceeded consumer expectations.

The Apple II was an instant hit. While its popularity could have been limited to educators and hobbyists, it benefited from the unrelated development of VisiCalc, a precursor to Microsoft Excel. Dan Bricklin, the inventor of the software, observed a professor at the Harvard Business School struggling with rows and columns of information in accounting problems and developed the VisiCalc spreadsheet software for the Apple II. It enabled the machine to have a useful purpose in accounting and numerical analysis.

Wozniak had designed the computer to use a mouse and revolving text line that could wrap around the edge of the screen. It was originally developed by SRI. It even had two floppy disks on board for program and data access. Great attention was paid to the outside design to allow the user to feel the natural aspect of the man-machine interface. By modern standards, it was a primitive machine—but that may be one of the fundamental characteristics of innovation. It is that the effort to bring an idea to the marketplace of the users is the heart of the innovative process. Once an idea sees the light of day, incremental and disruptive changes enhance the idea and allow it to find greater utility. Maybe the analogy of the oyster that constantly polishes a grain of sand to produce a perfectly round pearl serves an illustrative purpose here.

Walter Isaacson, in his 2013 biography of Steve Jobs (same title), points out that the next steps for Apple and Jobs were not as smooth as a good story would predict. Jobs has a fallout with the co-inventor, Steve Wozniak. The follow-on model of the Apple II, named Lisa, didn’t achieve market acceptance and the company faced bankruptcy. Three outside CEOs were brought in and soon dismissed. Finally, Jobs himself was fired. He went on to co-found a Silicon Valley animation company called Pixar and began work creating computer-based technology for the movie industry.

In a somewhat abrupt reversal, Jobs returned to Apple and implemented a series of dramatic and disruptive changes. Isaacson goes into great detail about the effect of Jobs’s reentry into the company. From demanding attention to product detail to abusive interactions with employees and investors, Jobs emerges as a hero for introducing multiple major innovations. The company name changed from Apple Computer to Apple. Products included the iPod, iTunes, iPhone, and the iPad—each of which was to transform the industry segment to which they were committed. The iPod transformed the way we buy and listen to music, and the iPhone set the pace for handheld communication devices and the creation of apps. The iPad pioneered a new class of laptop computing. The results were significant. Apple enjoyed the largest market capitalization of any U.S. company and largest corporate cash reserve in history. Tragically, Jobs died of cancer in 2011 and a professional team now tries to continue his legacy.

Historians and academics will judge whether this company will continue to sustain its value after Jobs’s untimely death. Early and current decline in the stock price may be a continuing trend. Competitors like Samsung have been able to dilute Apple’s market share by penetrating both the iPad and iPhone segments. Whether it sustains these gains or not, it’s quite clear that Apple set a new standard for corporate innovation.

The Bose Corporation

Amar Bose offers yet one more perspective. It lies in the ability of a closely held (private) company to invest beyond the competitive standards of its peer companies. Trained as an MIT Physics professor, Bose started his company, called the Bose Corporation, with $10,000 borrowed from his thesis adviser. His goal was to create high-performance products like superior acoustic speakers, noise-canceling headphones, and more. His company was private and substantially owned by him. This allowed him to pursue certain directions in product development that he didn’t have to get approved by shareholders and undergo the scrutiny of other investors.

Bose passed away in July of 2013. The Boston Globe obituary indicated that he had invested over $100 million in a new acoustic automotive suspension system. Even though the Bose Corporation has reported sales in the multi-billion-dollar range, it is hard to conceive that much money could be applied to a “pet” project. The story reveals how a closely held company can reach to areas of research resource allocation not available to public institutions, which operate in the sphere of regulatory and shareholder oversight.

Curt Carlson: The SRI Approach

There are many other practitioners who personify the innovation process uniquely. Curt Carlson is an example. Curt pioneered the application of HDTV and other optical image quality innovations. As head of the SRI International think tank, he led an organizational model of innovation. In his book Innovation, he delineates a process called NABC to help individuals coordinate and maintain discipline in the innovation process. NABC stands for:

• N—Needs (as defined by the customer)
• A—Approach (to market)
• B—Benefits (per cost)
• C—Competition

At Worcester Polytechnic Institution (WPI) in Worcester, Massachusetts, where Carlson is a trustee, he helped introduce the NABC process as part of the commercial justification of the student-based research projects they have to complete as part of their undergraduate curriculum.

Innovative Thinking: Clayton Christensen

Clayton Christensen, a Harvard Business School professor and author of many books on the nature of disruptive innovation, also observed that disruptive change happens at a certain rate. In his earlier work, he focused on the disk drive industry, where a rapid change of technology had a major impact on the 35 or so manufacturing companies in the business of creating product. The changes dealt primarily with the size and recording capacity of the disks used in the industry.

Early in the game, IBM pioneered a computer memory platter that was 14 inches in diameter but had capacity for only a mere 5 megabytes of memory. Later drives went from 14 inches to 8 to 5.25 and finally to 3.5 inches diameter in a space of a few years. Each generation increased the capacity of the disks by algorithmic amounts. Today, at 1.6 inches in diameter, the capacity is over 1 terabyte of information. Drives are so small that they now fit into cell phones. Just as important, the product development cycle shrunk from 2.6 years to less than 6 months.

That rate of change had enormous impact on both the producers and users of the drives. They simply couldn’t transition from one product range to the next fast enough. Of the original 35 companies, there are now only four. Today, companies are judged not only by their financial metrics, but also by softer ones like how well they can adapt to shorter lifecycles and market changes.

IDEO: Innovation in Design and Consulting

The roster of astute innovation practitioners reaches beyond icons like Carlson and Christensen. Organizations of consultants such as IDEO serve as an example. IDEO was formed by David Kelly and others out of Stanford University in 1978. One aspect of its mission is to “help organizations build the capabilities required to sustain innovation.” Embedded in their methodology is a process called “design thinking” in which problems are envisioned as overlapping spaces identified as inspiration, ideation, and implementation. This unique Venn diagram approach stands in contrast to a serial, inline, and step-by-step approach utilized by many problem solvers. IDEO also uses models called “road maps” to demonstrate the future implications of decisions and concepts being considered by their clients.

Innovation at Foundations

Organizational models also reach into the world of foundations. Classic among those is the Kauffman Foundation located in Kansas City, Missouri. It was created by Ewing Marion Kauffman in the mid-1960s. Mr. Kauffman was the founder of a world-class organization called Marion Labs. The foundation has assets valued at over $2 billion and is one of the largest private foundations in the world. The focus of its work is in entrepreneurship and underserved populations such as women and minorities. They also promote innovation. Their goal is to foster a “society of economically independent individuals who are engaged citizens that contribute to the improvement of their communities.” Included are programs for innovators in science and technology.

Certainly, the path to foundation involvement in commercialization doesn’t stop at large, private organizations. An example is the Kern Family Foundation of Waukesha, Wisconsin. Robert Kern, the founder of the foundation along with his wife Patricia, started a company called Generac Power Systems in 1959. The company designs and manufactures backup power supplies, primarily engine-powered generators fueled by natural gas. In 1998, Mr. Kern sold a division of the company and created the charitable foundation with the proceeds. The mission of the foundation was to instill the “entrepreneurial (innovative) mindset” in young engineers. Embedded in this work is an innovation program entitled the Kern Entrepreneurship Education Network (KEEN). It is comprised of over 20 universities and is characterized by multiple seminars and workshops in the area of hands-on innovation. At WPI, for example, I created a very successful course entitled “Innovation and Entrepreneurship for Engineers” with such funding. It is presented in multiple offerings per year. Each is oversubscribed to the level that students are routinely turned away from registering for the course.

The Pattern Emerges

A pattern emerges from this array of “waypoints” to innovation. It is that there are many paths and they lead to multiple sources of inspiration. Without a focus or a defined goal, the design and development efforts, as creative as they might be, fall short of presenting new opportunities. This was summed up by Buzz Aldrin, the Apollo 11 crew member who walked on the moon, in a cover article of MIT Technology Review. He lamented, “You promised me Mars colonies. Instead, I got Facebook.”

In the same article, Max Levchin, a co-founder of PayPal (the Internet-based credit card payment company) observes that “I feel we should be aiming higher. There is an awful lot of effort being expended that is just never going to result in meaningful disruptive technologies.”

Some point to the venture investment community as the basis for the shift from bold innovative projects to incremental ones. According to Bruce Gibney, partner in a Silicon Valley venture firm called Founders Fund in an AOL TechCrunch interview with Alexia Tsotsis (December 2012), “In the late 1990s, venture portfolios shifted away from funding transformational companies to companies that solve incremental or even fake problems. Venture capitalists have shifted from funders of the future to become funders of features, widgets, and irrelevances.” Twitter gives 500 people jobs for the next decade, but what value does it create for the entire economy?

Entrepreneurs like Bill Gates, Microsoft’s founder, were determined to “put a computer on every desk and in every home.” Steve Jobs of Apple wanted to make the “best computer in the world.” Whether there is a shift in investment strategies, or entrepreneurs choose incremental problems, there is agreement that we no longer tackle challenges of the magnitude and impact of the Moon or Mars projects.

It is not for a lack of agreed-upon issues that we seem to have lost sight of meaningful projects. In the National Academy of Engineering’s (NAE) 2012 Annual Report, seven “Great Problems” were identified. A billion people still want and need electricity, millions are without clean water, the climate is changing, manufacturing is insufficient to create enough meaningful jobs, population growth outstrips our ability to deliver food and nutrition, education is becoming a luxury, and diseases like cancer or dementia will strike almost all of us.

These problem are as interesting and challenging as the Mars mission, but somehow we no longer find focus in their solutions. Whether our lack of progress is the result of investment strategies, political actions, lack of entrepreneurship, or educational problems, the situation is ripe for change.

In the rest of this book, I will outline the steps that can be used to regain our footing and solve the big problems through the process of commercialization and how it can adapt to the needs of a new world of global competition, changing (and declining) resources, and dramatically changing technology.

I believe a pattern has emerged that suggests there are sufficient innovative ideas and solutions, but they lack the directions and process models to enable them to help the world. This further suggests that process innovation may carry as much weight as the actual solutions themselves. When there was a seemingly endless supply of resources and capital, the attention to process may have been secondary; now it may be the central path for moving forward.

Beyond process lies the challenge of what I call the areas of “Big I” and “Little I.” Big I encompasses a range of innovations that are bold, disruptive, and change the course of the world in which we live. Putting a man on the moon was certainly one of them. 200,000 apps used by Apple aficionados might be at the other end of the innovation spectrum.

Little I is all about incremental changes, improvements, and applications that have a marginal effect on our lives. Although they serve as product and market extenders, they consume significant human capital and financial resources to accomplish. Clearly a better use of our resources is toward substantive projects. Defining a strong and enabling value proposition helps focus on the best allocation of resources for these tasks.

Summary

The context in which all of this transpires is set against a backdrop of change that is so rapid it can’t be ignored. Increased population, diminishing resources, and breathtaking connectivity driven by computers and social media argue that we must find a better way. And we must do it all better. The model described in the following chapters offers a path to bringing practical solutions to commercial reality faster and better and with a higher probability of success. As you’ll see, it brings the reader back to some basic business fundamentals in its implementation.