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Tag Archives: Startups

5 Tools for Startup Innovation

29 Dec

We recently wrote a short article for Inc. Magazine highlighting key tools for enabling continuous innovation in startups.

The topic is in many ways counterintuitive; many people assume that because startups are often new market entrants, innovation comes naturally. It’s “in the blood” so to speak.  The truth is that once initial products are developed, a vision is detailed, or funding is secured, much of the focus of startup leaders turns to execution…

In the post we provide a number of concrete tactics for maintaining continuous innovation- tools that we’ve used in Kaltura and have seen at work in other tech companies. We hope you enjoy.

Do Successful Startups Come in 3s (or more)?

8 Nov

When Cyota started more than12 years ago, it was developing a solution to provide online shoppers with a single use online credit card number, so that their primary card would never be revealed online.

It sounded like an extremely innovative idea at the time, particularly because e-commerce was not well developed yet, and shoppers were very concerned.

Shockingly – there were 3 different companies (1 out of Israel, 1 out of India, and 1 out of Ireland) who were developing the exact same solution at the exact same time.

Indeed it seems like good startups, like good ideas, come in threes, or even fours.

In today’s celebrity culture, where we hold up the start-up founder or patent registrant as superstar, visionary, and inventor extraordinaire, the concept might seem surprising.  But for those studying the history of innovation, simultaneous invention is now the norm.

As Stephen Johnson notes in Where Good Ideas Come From:

One of the most remarkable patterns in all of intellectual history [is] what scholars now call “the multiple:” A brilliant idea occurs to a scientist or inventor somewhere in the world, and he goes public with his remarkable finding, only to discover that three other minds had independently come up with the same idea in the past year.  Sunspots were simultaneously discovered in 1611 by four scientists living in four different countries… The law of conservation of energy was formulated separately four times in the late 1840’s. (34)

Given the Cyota experience, we looked through the history of Internet startups to see if a similar trend holds, and it indeed it seems it does.

Early Search Engines Altavista, Ask.com, Yahoo Search
Social Networking Friendster, MySpace, Facebook
Social Bookmarking Delicious, Digg, Reddit
Online Video Editing Jumpcut, EyeSpot, Cuts
Instant messaging Powwow, ICQ
Video Sharing YouTube, Metacafe, Daily Motion
Webmail Systems Hotmail, Yahoo mail, AOL mail
Video Advertising Tremor-media, AdapTV, Yume
Shopping Comparison Dealtime, My Simon, ShopSmart

Great startups, like classic inventions, represent the product of networked individuals collectively identifying real needs in the world and simultaneously deciding to address these needs.

So, startup founders and entrepreneurs, next time an investor asks you to do a market analysis, take a real look around for those competitors. If you find them, you should see it as a sign of your brilliance and a foreshadowing of good things to come.

But more importantly, the notion that startups come in 3s has profound implications for how we cultivate innovation in entrepreneurial communities and the amount of weight we put on the good idea relative to other indicators of startup success.

Is Ignorance Essential For Start-up Success?

4 Nov

Blissful Ignorance – the Start-up Paradox…

Within entrepreneurial communities, it’s often the prevailing wisdom that innovation comes from industry experts that jump outside of the mainstream, team with technologists, and return with a new company or product to disrupt their existing industry.

Is this correct?

It seems to us that when starting a new startup in a particular industry, ignorance about that industry provides an advantage and raises the likelihood of starting a successful company. Having deep knowledge and familiarity with an industry serves to de-motivate innovation.

Familiarity with an industry means that you know all path dependencies, existing technological challenges, structural constraints, competitors, and hurdles, all of which are a good reason NOT to start a new company.

Hence, knowledge, which is indeed power, might on some occasions be too much of a good thing: in a competitive and entrepreneurial environment it can act as a deterrent for innovation.

As Stephen Johnson has emphasized, a leap in the dark based on a hunch and intuition might prove a better strategy than risk aversion based on (what may seems to be) perfect knowledge.

Consider Zappos’ entry into the clothing business, IndieGoGo’s entry into online loans, Cyota’s entry into the Security and Anti-Fraud market, or even General Assembly’s entry into education. None of the founding teams of these companies came from the industries in which they currently operate. And few even launched their companies with a focus on these industries.

The impact of knowledge on deterring innovation is part of the reason why companies who are active in particular industries for a long time look outside to capture innovation.

Outside innovation can be achieved in different ways:

  1. acquisitions
  2. building a platform that supports external development of applications/ plugins  (consider the iPhone app store or Google Apps)
  3. releasing software under as an open source project to encourage external innovation (consider Google’s development of Android)

We’d be interested to get your feedback.

Who is more likely to start a successful startup?

1.       An industry veteran?

2.       Ignorant outsider?