From Idea to Market: Antifragile Bridge over the «Valley of Death»                                             

From Idea to Market: Antifragile Bridge over the «Valley of Death»                                             

 

 

 

 

 

 

By Nicos G. Sykas, Strategy, Communication and Innovation Consultant

A McKinsey report estimated that, from a total of 10.000 ideas, 1.000 companies were created, 100 received initial funding, 20 continued to increase their capital with their introduction to the Stock Market (IPO), and 2 became market leaders. According to Harvard Business School professor Clayton Christensen, 95% of all product innovations fail, and according to the Startup Genome report, 92% of startups fail.

The “Valley of Death” is the critical stage between proof of concept, product launch, commercialization and the success of the new product; the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers.

The Beachhead Strategy can help startups survive the “Valley of Death”. The Beachhead Strategy comes from the military strategy of winning a small border area that becomes a stronghold, and from which they advance to the rest of the territory. The small border area is referred to as a beachhead. In business, the idea is to focus your resources on a small market area (such as a product category or smaller market segment) to turn it into a stronghold before advancing to the broader market or product categories. The Beachhead Strategy allows startups to dominate the small areas from which they can enter and dominate the rest of the market.

Beachhead Market:

Your first entry into the market.

Small enough to become a significant player.

Big enough to generate some cash.

 We live in a highly nonlinear world characterized by fluidity, uncertainty, randomness, variability, complexity, volatility, interdependencies, hidden asymmetries, explosive risks, fierce competition and winner-takes-all effects. Important events are not predictable. We are not prepared for rare events that have catastrophic consequences. The static tools designed for the 20th century linear world have not succeeded in exploiting the huge opportunities of the Fourth Industrial Revolution. New innovation strategies and dynamic tools are needed that take into account randomness and nonlinearities.

The new Innovation Model I have developed can help organizations create more and better innovations: a) In all domains and at all scales and sizes – scientific research, spinoffs / startups, small and medium size businesses, large corporations, public services, economic diplomacy, nation branding, risk management and b) at all levels – local, regional, European and global. It could also be a useful tool for international organizations such as the World Bank, the International Monetary Fund, the European Investment Bank and the Organization for Economic Cooperation and Development in the design of policies and programs that aim to catalyze positive reform and sustainable growth, create new business models and facilitate technology transfer.

Among other applications, this flexible, polyparametric tool can also help: 

– Organizations leverage digital capabilities to foster real-time innovation.

– Cyprus improve efficiency, promote fast-track entrepreneurship, attract foreign direct investment and enhance its competitiveness.

– Maximize the impact of Horizon Europe Program (European Added Value).

– Europe deepen its innovation edge.

This new Innovation System uses more than 100 creative, strategic, sustainability, patentability and commercialization criteria and success factors across all key stages of the innovation cycle. This pioneering method implements new strategies and techniques that offer the following unique advantages and benefits.

  1. Combinatorial Power. This polyparametric approach combines ideas, concepts, symbols, codes, image schemas, elements, features and capabilities from the four basic types of innovation: product, process, organizational and marketing. This interactive process creates novel connections, multiple perspectives and diverse combinatorial possibilities, maximizing the probability for breakthrough innovation.
  1. Harnessing antifragility. The architectural design of a new innovation should be such that it allows it to benefit from volatility, variability, disorder, randomness, uncertainty and time by minimizing exposure and harm from negative (unfavorable) asymmetries and maximizing exposure and gain from positive (favorable) asymmetries (more upside than downside from volatility and randomness).

The first step is the detection and removal of any fragilities and the elimination of the risk of ruin. Positive Black Swans also have a necessary first step: you need to be exposed to them. The main creative mechanisms used for modifying innovation exposure are differentiated branding and convex transformation. Convexity to uncertainty: Innovations can benefit from randomness more than they can be hurt by it.  

In his book Antifragile: things that gain from disorder Nassim Nicholas Taleb –the leading global authority on Risk Management– notes that «Antifragility is beyond resilience or robustness. The resilient resists shock and stays the same; the antifragile gets better. This property is behind everything that has changed with time: evolution, culture, ideas, revolutions, political systems, technological innovation, cultural and economic success, corporate survival, the rise of cities, cultures, legal systems».

Innovation 2020–2030 requires connectivity and clusters to harness scale and specialization. New strategy tools are also needed to help organizations harness antifragility and produce a multiplicative effect on innovation impact, startup success rate and public policy outcomes. 

  1. Innovation Symmetry. Innovations should be designed for maximum performance and impact. Within the new Innovation System proposed, symmetry between the different types of innovation –product, process, organizational and communication– requires that these are equally powerful. Important elements for achieving Innovation Symmetry include:

a) Parameters / factors: Concept, context, meaning, time, space, shape, data structures, fitting of data, form, pattern, representations, regularization, perspective, dimensionality, directionality, proportionality.

b) Properties / features: Simplicity, flexibility, adaptability, functionality, complementarity, synergy, similarity, coherence, balance, harmony, elegance, quality, transferability; dynamic, multi-modal, powerful, cyclical, scalable, resilient.

c) Tools / methods: Analysis, synthesis, comparison, transformation, combination, association, co-ordination, integration, unification, connectivity, construction, optimization, economy of means, efficiency, effectiveness.

 

In summary: The new Paradigm described very briefly in this article redraws the Global Innovation Atlas by embedding three critical parameters in the innovation process: Combinatorial Power, Antifragility and Innovation Symmetry. This powerful, versatile tool is presented analytically in an Innovation Toolkit I have prepared – a blueprint for creating more resilient innovations in era of asymmetry.