Market Research Tip of the Month
John G. Rau
Question for you. How do you measure invention success? Obvious indicators are that people are buying your product and as the inventor you are now making lots of money from your invention, you are able to retire as a wealthy person, travel the world, pay off your house and student loans, etc. But, in reality, other than generating revenue, there are more subtle ways to perhaps measure success in the context of what you have to do to make your invention successful. Here are some examples:
When one attempts to measure invention success, a key factor or invention attribute that one needs to consider is the extent of innovation as an invention will not generally be successful without innovation. Tom Grady, business consultant and regular contributor to PBS MediaShift Idea Lab and the Huffington Post, in his 2012 blog entitled “The Difference Between Invention and Innovation” offers the following definitions. “Invention” can be defined as the creation of a product or introduction of a process for the first time. On the other hand, he says that “innovation” occurs if someone improves on or makes a significant contribution to an existing product, process or service. He points out the following illustrative example to show how the concepts are linked. He says consider the microprocessor. Someone invented the microprocessor, but, by itself, the microprocessor was nothing more than another piece on the circuit board. It’s what was done with that piece—the hundreds of thousands of products, processes and services that evolved from the invention of the microprocessor—that required innovation!
Joshua Schuler, former executive director of the Lemelson-MIT Program, was quoted several years ago as having said that “Invention, at its core, is a technology-based product addressing a problem. Innovation is building the systems and scale to commercialize an invention. If you have an invention that isn’t scalable, it sits on the shelf. But there are no innovations without an underlying invention!” The two need to be linked for success!
In his July/August 2011 blog (see https://iveybusinessjournal.com), Roger More, now retired Professor of Marketing at the Richard Ivey School of Business in Canada, discussed the management realities of innovation and made the following observations about building innovation into an invented product:
He goes on to say in his blog that:
Roger More also offers an interesting perspective as to the best metric to use for assessing invention success. He states in his blog that “the only thing that matters is whether an innovation creates wealth and the only metric for determining that wealth is net cash flow. If an innovation is pumping real positive net cash flow over time, all of the other assorted financial metrics will be just fine! If it is losing cash flow, then the other metrics don’t matter”. Perhaps Tony Soprano of the Soprano TV Series recognized this as the right metric when he was quoted as having said “The idea is to get more cash out than we put in”.
Generating positive revenue is a key indicator of success, but, on the other hand, it can be expected that in order for an invention to be successful, it must have innovation embedded in its development and its target customers need to recognize this. Without some form of innovation, an invention is unlikely to be very successful.