Evaluation of Concept Theory
A report on One Hundred Flowers’ participation in the Creative Informatics, Entrepreneur in Residence Programme within the University of Edinburgh.
Concept Theory is a strategic model for inventing and innovating, as well as a measurement criteria for judging the value of ideas.
Using tools and techniques from the business schools of Harvard, Stanford and NYU, and influenced by some of the world’s leading innovators and disruptors, the model adds and finds value before, during or after any concept development phase.
In 2019 One Hundred Flowers was accepted into the Entrepreneur in Residence programme through the Creative Informatics arm of the University of Edinburgh.
During the project, we sought to validate the potential of Concept Theory to improve the commercial value of early-stage entrepreneurial ventures, specifically in the field of data-driven digital technology, but also including analogue products and services whose models are built on data-driven insights.
The ambitious outcome of the project was to deliver, over a twelve-month period, data proving that the application of this model can increase the success rate of entrepreneurial ventures. Critically, increasing the potential for value returns for founders and inventors/innovators who individually and personally suffer the greatest loss exposure when a venture fails.
It is important to caveat that Concept theory is a theoretical approach to value creation and identification. It is not algorithmic, neither does it have predictable outcomes. The application is one of cognitive effort and attention, and collaboration between individuals is key to successful results.
The primary evaluation model within Concept Theory (also known as the MEME model – Model Evaluate Mitigate Execute) has been developed as a very simple, canvas model, which participants can utilise and apply in isolation, or in collaboration with One Hundred Flowers. The four sections of the canvas model can be viewed below.
Canvas 1: Model – Insight, Foresight, Hindsight, Oversight
Understanding the origins of the concept and exploring hidden opportunities and pitfalls.
Canvas 2: Evaluate – Needed, Workable, Usable, Deliverable
Interrogating the market viability of a product or service.
Canvas 3: Mitigate – Ensure Victory, Avoid Catastrophe
Removing the risk of failure and improving the chances of success.
Canvas 4: Execute – Behaviour, Motivation, Ability, Trigger
Identifying the optimum plan of execution and market adoption.
Over the course of the project, we applied our model by evaluating a cohort of potential or existing start-up or spin-out data-driven ventures, concepts or businesses. Each venture would follow a systematic approach including direct workshops with founders.
Having spent the last quarter of 2019 planning out the project, defining the participant criteria and exploring the landscape for suitable participants, a global pandemic came along and attempted to spoil our plan. But disruption is inevitable, and in the Concept Theory model, it is both an opportunity and a desired outcome.
Lockdown, uncertainty, the economic downturn and government restrictions meant all businesses, but especially early-stage ventures, turned their focus to survival in 2020. And the opportunity to participate in a programme of analysis and development seemed to many struggling ventures, less than critical.
Although there had been introductions to a number of possible candidate ventures, there were two categories that became untenable very quickly. Ventures that were in an embryonic stage, and ventures that required immediate funding to continue development.
The former paused activities as founders focused on making a living and surviving. The latter went into stasis or simply folded as a result of funding being unavailable.
However, as the search for participants broadened, unexpected opportunities opened up, and as the year transpired, despite extending the timeframe of the project a few times, over thirty applications of the model were achieved.
However, it must be said that the structured process originally defined at the beginning of the project was rarely stuck too, due to the difficulties of proximity, time, availability and other lockdown and pandemic driven disruptions.
Nonetheless, collaborations happened, where and when they could, and with varying degrees of depth, the model was applied.
Don Smith Presenting Concept Theory to a cohort of ventures through the HIE/AAB Impact 30 program.
The full report for each participant venture was written up and submitted within the final documentation to the University, and we cannot share details of participants as many of the engagements related to development of proprietary intellectual property. However, the nature of some of the ventures evaluated can be seen below:
A data-driven AI technology within mobile networks.
An advanced robotic drone technology venture.
A sensor-based technology for application in space exploration.
An innovative consumer Fin-tech application.
A pandemic driven sanitation venture.
A sensor driven health-tech invention.
A transport-based service design venture.
A travel & tourism marketing platform.
A sustainable aquaculture business.
A marine engineering service proposition business.
Despite the need for discretion, the model was used to evaluate two of the internal inventions within the One Hundred Flowers pipeline, and a short description of the concepts and the outcomes of the model can be read below:
Xhaler
About: The Xhaler is a concept that was developed within One Hundred Flowers as an extension to our existing spin-out business, 1nhaler Ltd. We realised at the outset of the pandemic that our proprietary inhaler design could be remodelled to be used as a breath biomarker test for covid 19. Using the product to capture exhaled breath particles for analysis as opposed to use as an inhaler for delivery of dry powder drugs. With limited knowledge of breath biomarker testing technology, we researched the concept and applied the findings within the canvas model to evaluate taking the concept further.
Outcome: Although there were a number of strong reasons to pursue the concept, we identified a number of barriers to entry through the hindsight and oversight aspects of the canvas model. For instance, a single device was unable to capture the volume of particulate material required for analysis, and the number of devices required to gather enough would have made combining material for testing untenable. We also discovered that use of the product in this context could infringe a number of existing patents. And to get beyond that itself, we would need to develop a connected set of partners, all of which would need to perform a part of the process. Meaning by the time we had a viable supply chain, the cost would be too high and the value during the pandemic would be over.
To this end, we chose not to pursue the venture at the current time.
KELP
About: KELP is an acronym for Kinetic Energy Leveraged Power. Which in itself is a name we coined for a concept within the One Hundred Flowers invention stable, a radical tidal energy turbine based on biomimicry of ocean macroalgae. KELP is still in the development and IP protection stage, so a full description cannot be shared at this time. However, the basic concept was run through the canvas model to identify barriers to development but also opportunities for efficiency in business development.
Outcome: The model worked very well to identify the pitfalls associated with previous ventures in the ocean energy and renewables sector. Pitfalls such as material cost of equipment, high expense of testing and prototyping, regulatory and legislation barriers to market entry, among many others. However, what became evident was that the product’s simplicity meant the energy expense to energy creation ratio would likely be much higher than most existing technologies. And the design of the system was so unique that it should be easy to protect the intellectual property.
Further use of the model, the foresight segment, showed that there was potential to recycle and reuse some of the redundant oil and gas marine engineering technology in existence. Creating further efficiencies in developing a sustainable business. Armed with the insights from the model, and valuable industry research, we will be developing the product as a spin out venture later in 2021.
Each engagement described above, along with all of the participating ventures that cannot be named in this article, had their own very unique needs and outcomes. However, during the project, it became clear that many of the ventures, and indeed the founders, experienced similar threads of behaviour, biases, oversights and skills shortages. Those threads that were most obvious are listed below.
Focus on the market leaders as a competitors, rather than potential partners or customers.
Poor competitive landscape studies, patent searches & industry/market evaluation.
Confirmation bias inhibits adaptation. Denial/dismissal of barriers.
Secondary IP opportunities, including brand/trademark protection. Marketing naivety.
Articulating the value proposition – Why it is valuable Vs what it does. (Academic ventures are particularly guilty of this)
Identifying commercial value of unproven technologies. Investor readiness.
People and partner overload too early. Diminished founder control.
The ego trap. Focusing time on external influences. Events, networks, incubators, awards, etc.
Industry-centric thinking. No ensemble probability. Little risk mitigation.
The value in identifying these common issues is that they serve an important role at the beginning of each engagement. Highlighting these common issues will help to rapidly assess whether the engagement can be expedited, by simple course correction, or extended to surface more unique oversights specific to the venture. This has become a strong evaluation tool to define the man hours required and therefore the cost analysis of an engagement.
Although the Concept Theory model will improve a concept, it will not turn a concept that is neither inventive nor innovative into something that is. It may help to identify a market need through analysis of a flawed concept, but it will not create value where there is none.
These learnings have helped to evolve the ideal criteria for assessing ventures that will gain the most value from the application of the Concept Theory model, they are as follows:
Product or service focused (rather than intermediate or retail business)
Novel technology (protectable IP)
Invention or innovation Vs ‘Me too’ model (no copycat businesses!)
Unmet market need (ability to deliver protected first-mover advantage)
Pre-seed preference (allows greater flexibility for course correction)
Founders only stage (‘too many cooks’ principal)