How to find a new idea and escape the industry crisis

How to find a new idea

and escape the industry crisis

New numerical approaches to Patents Mining may help identify your next disruptive idea and escape the crisis

Dear Fellow Innovator,

Few days ago one of my friends asked me a hand to find a way to “differentiate” his Company’s lines of Business, identifying a new one.

The reason was simple: the market niche the company is holding on, it’s shrinking.

In his grace and benevolence, he thought that I could help to come up with a good idea, and be of help for embracing it, via a small acquisition or the development of a new business model from scratch.

This situation is not uncommon in these days.

The innovation rate and the globalization are taking their toll from several industrial districts in Italy and abroad.

Business owners who once upon a time could say to their Sale Force: “ Customers will grab this product out of your hand! Just go and knock at the door! “, now they find themselves in Sales war rooms, with the same Salesmen and Agents pointing their finger at them ’cause the Company (you) do not want to lower price: “the only way to beat competition” and the only “magic words” that those same Clients now want to hear.

A Sale Force requiring lower prices is not the only sign of an urgent need for differentiation.

A steady rise in Unit Margin it’s also warning about a need for differentiation.

The maximization of Unit Margin is something un-avoidable by a well structured business.

We tend to sharpen our products’ performances because this is what the most demanding clients ask us. And more demanding clients means: clients more keen to reward our efforts.

Unfortunately this quest toward more performance has the bad habit to drive our Company above the safe space where the paying Customers are enough to let our operations to breath.

In other words: we tend to build products always more performing, whose performances are satisfying an always shrinking number of “crazy” clients ( those with extremely peculiar needs ) … till there are no more clients to serve at all.

Observing a product line’s Unit Margin expanding, while the clients base shrinks, is a good sign that the Company is approaching, or is already in, the “over-performance” orbit, with good chances for a sudden and catastrophic return to earth.

A further indication that the time for differentiation has come is an explosion of R&D costs and an un-justified ( in the sense of un–selling) blossom of the number of Patents.

In a desperate attempt to gain performance advantage, driven by the addictive habit of pleasing the above mentioned “crazy” customers base, the Company concentrates the resources in what has always paid before: more technology.

The result is a product / system / service platform capable of anything, but that nobody wants (at your price).

Can a Company behave differently? Escape the over-performance trap?

No, a Company can’t.

But a Business Owner can wisely divest and find a new business trajectory to exploit.

The fact that my friend came to me with the precise request of help for “differentiating”, means that as business owner, he perfectly understood the ineluctable destiny of his actual business and that a new one is the only way out.

Find a new business trajectory is not an easy task.

Most of the major league companies hire for this mega-experts, who have the drawback that generally are expert of the same industry of the company and therefore tend to offer solutions consistent with the old line of business.

Second-tier companies are more keen to rely on “brain storming” techniques, that, when are not affected by the same weakness as described above for the mega-experts, bring home results more due to a substantial help of the Lucky Star, than due to a rational process. ( Just to remember: the Lucky Star is blind…)

A good help in finding a route to differentiation comes today from new machine learning technique called “Patents Mining”.

What it is, it’s easy said: a software capable to read millions of patents and to find possible new technological trajectories where to begin a new (business) life.

Finding a new technological trajectory it’s not all, but it is a good start.

A Business Owner, compared to a startupper, has the distinctive advantage of being already in business. He/She has a well established business network, a routine - if not a methodology - in dealing with investments, and (if acting before to reach the stratosphere ) the resources to tackle new opportunities.

Why this “patents search” should bring results?

The reason about looking into billions of patents, is more qualified than the simple idea of “avoiding to reinvent the wheel”.

A Russian scientist named Altschuler, has spent a life after the idea that inventing new things is a repeatable process and that innovative solutions are found adopting the scientific results of near by industries.

He even defined a methodology to identify which science can be the next tool to de-bottleneck a problem. The methodology is called TRIZ and it’s a tool that helps a lot in giving directions to the “Patents Mining” software.

When the directions of search are set and the Patent Mining tools are in place, the amount of “Luck” needed to escape an industry crisis, shrinks dramatically.

From this point forward, setting up a new business model is the last step that is needed. Here we can use the risk taking approach of the Lean Startup methodology, and use a scientific approach to the set-up of a new Company.

In summary:

If your company:

· has a Sales Force asking to “lower Prices” as the only way to survive competition

· sees the unit margin increase while the customer base is shrinking

· is counting an formidable proliferation of new Patents, but gaining very little differentiation from competition

then the time is arrived to look for new business routes.

A safer way to find the right one, could be a combination of scientific methodologies:

· Patent Mining

· TRIZ

· Lean Startup

If you are interested in giving a try, or discuss the details, I will be happy to get your call and introduce you to my team of partners:

ERRE-QUADRO who developed the Patent Mining software tool,