Evaluation of Concept Theory
A report on One Hundred Flowers’ participation in the Creative Informatics, Entrepreneur in Residence Programme within the University of Edinburgh.
The Concept Theory, MEME Evaluation model
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 Resident Entrepreneur 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)
Taking the model forward, there will be a venture evaluation stage using these criteria prior to engagement. However, the model will remain open source as a canvas to any venture that chooses to use it. The reason for that is, it takes an innovative or inventive mind to apply the model well. Meaning that it will provide value for those who it is intended for, the adventurous venturers themselves!
In summary, the project is viewed as a great success, specifically around the application of the model to add value to early-stage ventures and start-ups. When fully engaged, ventures found great value, particularly in the ability of the model to identify unseen opportunities as well as potential points of disruption.
The main blockers to successful application of the model were the biases (specifically, confirmation bias) of the founders, inventors and entrepreneurs. Early enthusiasm quickly turned to reluctance at the first sign of critical appraisal. An important lesson in any future engagement process for Concept Theory.
Whilst many of the ventures engaged with the model did find ways to improve their concept and identify new pathways towards value, most were actually more enthused by having identified blind spots in their approach and barriers or hurdles that had not been anticipated.
The testimonials below recognise this added value.
“Don’s Concept Theory approach to developing a business proposition, identifying risks, and planning ahead to avoid failure is one of a kind. We’ve met multiple times to discuss the unique features and benefits of the technology my team is developing, and on each occasion time seemed to evaporate. We went through an iterative process to be able to reshape Net AI’s offering, so as to make it more accessible to potential customers and discover new markets that would have been otherwise overlooked. Don is a great listener, he would challenge the entrepreneur on the spot when certain aspects are presented in a convoluted way, he takes time to digest offline the face-to-face discussions, and he will come back with great analogies that help in better articulating the problem tackled and the uniqueness of the solution developed. Always equipped with his own experience as a successful entrepreneur and having mentored others, Don guided me on everything from sharpening the virtual business card to branding and establishing an online presence.”
Paul Patras, Founder, Net Ai
“The Concept Theory model was widely praised by the Impact 30 cohort ventures. The model helped to uncover new approaches, opportunities and value in unique ways for participants. It also helped to highlight the unseen pitfalls and hurdles that could upset or disrupt businesses. Don’s approach to innovation was thought provoking and challenging, and at times, difficult questions were asked, and individuals were uncomfortable, but always with the goal of increasing success and adding value. We look forward to applying the model again with the next Cohort in 2021.”
Mark Bell, Co-Founder and Partner for Consulting, Anderson Anderson & Brown Consulting Limited
"The best part of working with Don was the simplicity of the engagement and his broad scope of mind: he reached out with true passion for what we are working on and he was able almost entirely on his own to figure out our value proposition and the broader potential of our technology. All it took from our end was a couple of informal chats with Don and in turn we learned about novel business concepts and how to potentially apply them to our venture, proving that the Concept Theory canvases can be of use at any business stage."
Dr Lorenzo Conti, Founder & Managing Director, Crover Ltd
For further information about Concept Theory or One Hundred Flowers, please contact don@b100m.com or visit www.inventdisrupt.com
An invitation to spend the day with me
Brief encounters can be exciting, discreet and very valuable
Everyone has less time and less money to spend on outsourcing. Yet everyone wants more success and more value in return.
So, I’ve created five low-cost, high-value, half-day workshops that I believe will add real value, and competitive edge to any venture.
1. NEW BUSINESS & PITCH WINNING:
As you know, its critical to be one step ahead of your competitors. I have a history of helping both agencies, consulting firms, corporates and start-ups win new business by adopting innovative, strategic models that add a competitive advantage. I also train creative people as well as senior managers in my EVAC pitching and presenting strategy. And it is so simple, it can be done in a morning, an afternoon or an evening session.
(Three hours of my time recently helped a client win a seven figure contract.)
2. BRAND CREATION & REINVENTION STRATEGY:
I have been responsible for successful branding and marketing strategies and core communication propositions for global brands from almost every sector. In only a few hours, using behavioural psychology and design philosophy alongside the latest models and toolkits from leading thinkers in the field, I’ll show you how to MVP a new brand or reinvent an existing one to appeal to digital consumers with constantly evolving values and behaviours.
3. INNOVATION & DISRUPTION TRAINING:
Before the lunch bell rings, I can open the minds of your brightest and best people to the latest thinking around innovation and disruption. I’ll share innovative new strategic models (Harvard, Stanford, NYU, Princeton, Wharton UoP, LSE and many others) and a whole new toolkit to ensure victory and avoid catastrophe for you and your customers. I’ll show you how to be the disruptor rather than the disrupted.
4. DE-RISKING NEW VENTURES:
You may be embracing agile working, and using sprints to stay in, and ahead, of the game. But that model is already over thirty years old! There are newer, better models to innovate, and to design and evaluate new products and propositions. These models are quicker, cheaper and more successful in finding value than the ones your competitors are using. Faster than a scrum master at a kanban board, I’ll show you how to find more, measurable value in your product development.
5. START UP BUSINESS MODELLING:
Whether you’re an entrepreneur, a university spin-out or a business with a new venture, I can increase your chances of success. Using concept theory, my model for developing, evaluating and executing a valuable idea, I can strengthen or course correct your business model towards maximum value. If you can find a few hours, I can deliver proven success strategies from leading authorities such as Harvard’s Clay Christensen and John Kotter.
Choose one. Choose all five if you like! I guarantee you’ll find huge value in each session.
And if you need to know more about my experience and qualification, you can find out more here.
It will be an affair to remember!
A beautiful, evolutionary transformation
From something rather cumbersome
To something elegant and attractive
Why the website has been redesigned
When I built the first One Hundred Flowers website two years ago I was in a very different place.
I’d left full time employment to follow my own path. It was all about me, me, me.
The site was radical, rebellious, introspective and hard to navigate.
A good reflection of who I was! (I’m still a bit like that.)
But running my own business, two of them now, has matured me.
And the focus of everything now is on the work!
This new site is designed to explain exactly what I do, how I do it and who I do it for.
I’d love to hear what you think, so feel free to drop me a line.
Hymnsheet, spreadsheet harmony
Ever been to church?
I used to go (forcibly) to Sunday School as a kid.
I had very little commercial nous back then, but I did notice something about the system.
We got our spiritual guidance for an hour, and then the collection plate came around.
I remember thinking it seemed a bit grubby to take money from us kids in a church.
But actually, it’s pretty much the best business model ever (the catholic church is wealthier than the five biggest corporations in the US put together).
The existential base is ethical, and the functional mechanics are financial.
And they proudly display the former, whilst discreetly hiding the latter.
The hymnsheet precedes the spreadsheet.
Now how does that model compare with modern business models?
Well it’s inverse isn’t it?
The spreadsheet precedes the hymnsheet.
In fact in so many cases the spreadsheet eclipses the hymnsheet.
Many businesses seem to discreetly hide any values and beliefs they have with the sense of mild embarrassment with which the church keeps its finances out of sight of its customers.
Well, in an economy that glorifies and rewards the financial success of a company, CEO’s and CFO’s are naturally going to balance things that way.
But the economy is changing. More and more, consumers are scrutinizing your ‘why’ rather than your ‘how much’ when defining the value of their interaction with you.
So I’m advocating getting the balance right.
Balance, not imbalance.
Because having an impressive ‘why’ (mission, vision, values, purpose, beliefs, principles, or however you want to define it) to communicate, is as important to your customers, and your people, as having an impressive financial model.
As I’ve said before, the economy is changing.
Go back to your hymnsheet, dust it off, and start singing from it again.
It makes much more beautiful music than your spreadsheet.
Get in touch if you’d like help making all things bright and beautiful.
From the archives: Inventions and reinventions
I’ve produced hundreds of solutions for clients over the years. To begin with, in the realm of advertising and marketing, and latterly in the worlds of digital design and technology. I dug out a few of the highlights of my career as a Creative Director:
2016 EXPEDIA HTA FACIAL RECOGNITION
Working with the Hawaiian Tourism Authority, through the Expedia Creative Partnerships Team, we designed an interactive, facial recognition campaign to deliver personalised travel itineraries to prospective visitors.
Connecting embryonic web technologies with innovative film making, we were able to watch viewers as they watched our films, allowing us to use sentiment analysis to deliver their perfect Hawaiian vacation.
You can have a go yourself here discoveryouraloha.expedia.com
2015 BBC UNEARTHED PROTOTYPE
As television evolves, broadcasters like the BBC invite their partners to be inventive with new technologies to deliver deeper experiences for viewers.
In this instance we delivered an experiment that connected 360 degree film footage with innovative interaction techniques and binaural sound to place the viewer in the heart of the rainforest. A fully sensory immersion into the heart of the jungle.
The technology is now being adopted across broadcast and will be a key part of future virtual reality programming.
You can see and hear how it feels here.
2013 CBS INVERSE AUGMENTED REALITY
Invention happens when you connect the previously unconnected.
In 2013, whilst playing with augmented reality technology, our CBS client asked us if we had any ideas to promote their broadcast of historical Star Trek episodes at an upcoming convention.
So we inverted the technology and rather than overlaying content in AR, we found a way to remove it. And in doing so created a matter transportation experience for thousands of Trekkies which was seen around the world.
Watch the video case study here.
2012 SPURS MATCHCENTRE
The goal in redesigning and building the new Spurs site was to get fans to visit on match day, rather than going to the large news publishing sites.
We designed and built an innovative matchday hub that collated a multitude of data feeds into an exciting second-screen experience. Delivering over six thousand concurrent users at any given moment on any given match day.
Which equates to a lot of new revenue.
2006 INCREASING ORGAN DONATION
Historically, campaigning to recruit organ donors relied heavily on positive affirmation of the altruistic act of carrying a card. Challenging that convention, we used the principals` of behavioural psychology to deliver a new approach to recruitment.
Knowing that fear of failure is a stronger motivation than potential success, we showed that inaction made those not on the register complicit in preventable deaths.
A disruptive approach that saw a 300% increase in donor registrations.
1998 REPOSITIONING THE AA
The AA was a breakdown service.
People had little faith in their mechanics and no interest in their imperialistic history.
So we repositioned it as 'The fourth emergency service'.
Beyond marketing, the entire organisation had to change to live up to that new status.
Operationally and commercially it became one of the success stories of the decade.
Winning effectiveness and creative awards alike.
1995 IRN BRU REINVENTION
You have to deconstruct to reconstruct.
So we killed 'Made in Scotland from Girders' and ushered in a new era of high volume, low-budget, guerrilla marketing campaigns for the brand.
Based on one sentence pitched to a very conservative client. We said, 'Disposable culture requires disposable advertising'.
Sensing a new digital zeitgeist, we reinvented not only the brand, but the way youth-culture brands were marketed.
I have to say, I’m a bit embarrassed about the content, and having marketed soft drinks, but hey, I was young!
There's a legendary story behind the pitch, email me if you want to know it!
EVAC (Ensure Victory Avoid Catastrophe)
EVAC is just one of the strategies in my consulting toolkit.
It originated from a lecture I attended by Rory Sutherland in which he explained that our fear of failure is a stronger motivator than our desire for success. A risk aversion bias.
As someone who has spent a career selling ideas, I realised that the pitch I was making was always biased towards the promise of success rather than avoidance of failure.
When I began employing this strategy in presentations, I saw an uplift in pitch wins (especially in a digital marketing technology agency).
Because when you consider the mindset of someone looking to make an investment, in any area, their primary motivation is to not lose money. Their secondary motivation is to make more money.
So when presenting, the first thing to do is to explain why you won’t fail.
Because almost everyone you are pitching against will start by promising to succeed. And probably not even bother to mention failure. Which will result in failure for them.
You’ve already won the pitch by promising to avoiding catastrophe. So when you then promise to ensure victory on top of that, the investor or client associates you with a double positive, and your competitor with a single negative.
EVAC strategy doesn’t just mean you win, it means the competition lose.
Email me if you’d like to know more. And there is a lot more!
The model for next generation creative team building
Ideas people aren’t on drugs, they are drugs.
I’ve seen the whole agency world transform in the last decade.
We’re moving into a new model of structuring teams in agencies to produce work for our clients.
Pure play ‘creativity’ as we knew it is a thing of the past.
There’s a quote I love which goes ‘We used to make people want things, now we make things people want’.
That notion of taking creativity away from communications/marketing/brand, and pushing it into product/service/user centred design, is what will define the future of agency-based professional services.
We used to split the world in two.
The people who wrote a brief, and the people who responded to it.
The boundaries have blurred completely.
Clients are looking to do continuous improvement of their systems.
That means looking holistically at your customer-centric business strategy.
So the brief becomes about what you make, rather than how you sell it.
And technology means we can develop products and services, and take them to market, with the same ease that we used to create marketing campaigns.
So why make an advert when you can make a better product for less?
(This is summarised beautifully in Clay Christensen’s new book.)
To this end, we see the advanced digital agencies finding problems and creating solutions in collaboration with internal teams in a client business.
The agency drops a team into their client’s business and together they work in an agile process to define the customer need, the product or service that provides for that need, the design and build of that product, and the take-to-market strategy for the solution.
It’s a process that uses sprints to keep up momentum, and all parties are critical to validating the outcomes of the sprints.
So your CX and UX teams are leading at the definition stage, your design and strategy teams are leading at the conceptual stage, and your build and implementation teams are leading at the production stage. But all are involved from the outset so that the output takes form holistically, and all parties are validating at every sprint stage.
So if you’re building the ultimate ‘creative team’ of the future, it actually involves way more skills than we traditionally consider to be ‘creative’.
For my own ‘creative’ team at Realise I have a cross section of the skills I feel we need to provide a complete design and communications solution for our clients.
That includes digital design and art direction, copywriting and content strategy as well as motion graphics. My creative team is also integrated closely into our UX and CX team, our creative technology team and our strategy team.
In fact the boundaries are so blurred now that looking at the form of any team that works for a client is like looking at the molecules in chemical compounds.
Each has its own unique combination of elements, connected together in a bespoke structure.
And like a chemical compound, or drug, each variation is designed to manage and relieve a very specific problem.
I guess you could say that looking at the modern incarnation of a ‘creative team’, you’re more likely to think they are a drug, rather than being on one.
(With apologies to Chemists.)
The many mothers of invention
Ideas can come from anywhere
Necessity has no matriarchal monopoly on invention.
In fact almost any situation or sentiment can seed, gestate and give birth to bouncing baby ideas.
Here are some of my favourite conceptual child bearers.
Hypothesis is the mother of invention.
‘What if…?’ The question mark itself provides answers. And Hypothesis, as Socrates hypothesised, leads us to great truth.
Curiosity is the mother of invention.
‘Why not…?’ How interesting it is to be interested and to connect your interests in new and interesting ways.
Opportunity is the mother of invention.
Find the problems, solve the problems. See the gaps, fill the gaps. They are there, they are everywhere, you’re just not looking hard enough for them.
Compassion is the mother of invention.
‘What should we do? What could we do?’ Looking outward at the world of others can inspire us to look inward for ways to improve lives. Invention can save the world. In fact it’s the only way to save it.
Survival is the mother of invention.
Ask any Taoist and they’ll tell you that change is the only constant. When you know that, you can be always ready to evolve and adapt.
Prevention is the mother of invention.
Beat someone to it. First mover advantage means someone else can take second mover advantage. So be like S Club 7 and don’t stop movin’.
Catastrophe is the mother of invention.
We’ve all experienced it. The fly in the ointment. The spanner in the works. The monkey in the wrench. When change hits, it hits fast, and you have to respond fast. Quick thinking can be the best thinking.
Conversation is the mother of invention.
Whether it’s the voice in your head or the voice of another, language is like abstract, verbal mathematics. One plus one quite often makes three.
Dissatisfaction is the mother of invention.
How many times have you said “Someone should…?” Well, that someone is you. So don’t get mad, get inventing.
Boredom is the mother of invention.
Life can be repetitious. When everything feels the same, do something different. Replace the same old same old with the different new different new.
Frustration is the mother of invention.
If it doesn’t work the way you want it to work, then reinvent it. Shaw said “The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” So be an unreasonable man, or woman.
Necessity is the mother of invention.
Despite having perhaps the greatest number of offspring, she shows no signs of losing her fertility. Whether we need a job done or we need to create value for ourselves, the genesis of success begins with an idea.
Invention, like its many mothers is a great provider. And it is not without it’s own ability to reproduce…
Invention is the mother of disruption.
And as all inventors know, it’s better to be the disruptor than the disrupted.
If you have any to add, I’d love to hear them.
The biggest risk to boardrooms
Your approach to governance is holding you back
I’ve met a lot of board members over the years.
Either as execs or non-execs, there is an approach to filling these positions.
The subtext of the appointments goes something like this…
Are you consistent? Do you have long term, narrow yet deep experience in a specific area? Have you risen up through ranks in a linear fashion without any notable disruption? Are you a member of one or more ‘institutes’? Can you manage order and ensure continuity? Then please contact…
The key word in Boardland is governance. The archaic nature of the word simply means to rule or control! It’s not a very nurturing term, yet it is a specific requirement of a public company’s board in the UK Companies Act of 2006.
Governance tends to happen through the work of a board’s respective committees. Of which the usual suspects are audit, finance, risk, nomination and remuneration. Are you falling asleep yet?
The bit I actually find interesting is risk. Because a risk committee will predominantly look at risks the company faces and the avoidance of them.
For me, there needs to be a change in attitude, risk is simply opportunity by another name. Just as disruption is invention’s consequence.
I’m not advocating that a board should be more frivolous, simply that diversity on boards goes beyond gender and race, it must include a healthy balance of risk aversion and risk taking. And that can only happen when a chairman recruits a board capable of opportunism, innovation, invention and connecting information to find new value and growth.
My point, as it always is, is invention and reinvention are the primary requirements for a business to survive and thrive (not even innovation will save you if your system itself is redundant).
Invention and reinvention are the primary requirements for a business to survive and thrive.
So board recruitment strategy needs to change. Especially if you want your business to be the disruptor rather than the disrupted.
So free of charge, as a gift from me to you, I’ve written your next non-exec appointment ad for you.
Are you flexible? Do you have years of broad experience in a variety of subjects? Have you worked with diverse sets of people in erratic and unpredictable environments? Have you caused and been party to disruption? Can you handle chaos and manage change? Then please contact…
And if it helps, I know a ton of great people who fit the bill.
Value modelling in businesses that generate ideas
Information (I) leads to understanding (U) which allows for a hypothesis (H) either an invention (I) or an innovation (I) that requires validation (V) before execution (E)
Having a valuable idea (or hypothesis) is not a time-consuming activity.
Which is, arguably, why it seems hard to place a high value on ideas.
What is time consuming, is the work that happens before and after the genesis of an idea.
The diagram above shows my view of the work involved in that process.
Information (I) leads to understanding (U) which allows for a hypothesis (H) that requires validation (V) before execution (E).
This is the process surrounding all valuable ideas (and my invention practice).
And the time and effort to deliver each stage is not equal.
Quality of input determines quality of output, which I believe is a universal truth.
If you try to standardise value across these parts of the value creation process, you naturally undervalue hypothesis and overvalue information and execution.
This is why, when modelling a professional services business, you have to present a balanced remuneration model so that your client recognises where and how value is created (you also need to define ownership of IP).
In any kind of business where ideas are generated, the application of this model will assist your value proposition.
Examples of the application of the model include:
· Agency and consultancy business modelling.
· Internal R&D or innovation team modelling.
· Both running and responding to pitches and RFI/P’s.
· Vocational education and academic IP generation.
· Entrepreneurial venture modelling.
· Value identification across investment businesses.
I have also built a bespoke toolkit around these five stages of value creation (PM me if that’s of interest). The toolkit is designed to focus and shorten the process.
I wrote this because over the course of my career I’ve seen great ideas, that have been very profitable, sold based on the time it took to have the idea (or hypothesis).
Valuable ideas may appear quickly and easily, but the complete process is long and difficult. The process creates value, and as a result it has value.
I hope you found that valuable.
Confidence never trumps competence
A perspective on HBO’s ‘The Inventor: Out for Blood in Silicon Valley’
Richard Feynman said, “The first principle is that you must not fool yourself, and you are the easiest person to fool.”
Everything about the Elizabeth Holmes story is captured in that quote.
Blind faith leads down dark paths, and as you can see in her eyes towards the end of the film, she is in a dark place, with nowhere else to go.
I have two primary issues with the film, its title and its targeted protagonist.
I’ll come to the first issue, its title, at the very end of this article.
Let’s look at our protagonist.
Every good film needs a hero and a villain, and Holmes is painted as the archetypal, megalomaniac villain here.
With cutesy, blue eyed, goody-two-shoes, whistleblower, Tyler Schultz playing the underdog hero.
But here’s my perspective, he is her, and she is him.
Two ambitious young people, full of the hubris of Silicon Valley’s digital gold rush, trying to tie their egos to exponential success. The only difference being Holmes’ spirit of risk taking to ‘start something’ in contrast to Schultz’s lack of spirit and desire to be ‘part of something’.
They are born of the same culture. And in the end, both got what the internet age values the most, fame and notoriety.
True failure in that culture is to be invisible and forgotten.
For both of them, the ambition they had (bred into them I should add) led them to break Feynman’s first principle, they both fooled themselves.
Schultz came clean, not through his internal sense of moral duty, but because a journalist asked him too, and his ego liked the attention, and his envy liked the opportunity to bring down Holmes (who he clearly was jealous of, especially his grandfather’s adoration of her).
Holmes never came clean, and seemingly still hasn’t.
In the first part of the film, her university professor of pharmacology tells her that her patent won’t work, and Elizabeth ignores her.
She fooled herself and that escalated, catastrophically, over the next decade.
Silicon Valley eschews a culture of confidence over competence.
Although I do think they are both the product of a rather disingenuous culture, Shultz is ultimately forgettable, but Elizabeth is a fascinating character psychologically.
And her hero worship of Steve Jobs is partially at the core of her failure.
Steve Jobs was a rather unpleasant and dysfunctional, yet brilliant individual. Probably a narcissist, certainly an egomaniac, he ruled with an iron will and uncompromising focus. Good ingredients in the recipe for huge commercial success.
But he had two other ingredients that were missing from the Holmes recipe, a product that worked, and a genius scientist (a computer scientist in Jobs’ case, Steve Wozniak).
Holmes is alone in her journey, and looks alone throughout the film, despite the team she built around her. Too many yes-men, and not enough no-women (the gender balance of her board should not go unnoticed).
Holmes shows all the signs of narcissistic personality disorder. A sense of grandiosity and entitlement. A lack of empathy with others. The use of charm, pity and rage, in that order, to get her own way. An ability to believe her own pathological lies. No sense of personal responsibility or accountability for failure. The projection of blame towards any available target.
However, as with many narcissists, there’s an insecure, childlike innocence that sits visibly and visually on the surface. A vulnerability that is very attractive to anyone with a modicum of empathy.
Charm, grandiosity, lies she believed in, and vulnerability. It’s no wonder she got what she wanted from her board and her investors (the yes-men!)
But for the foolishness that led to failure, she is actually just like her hero.
Given that type of personality, combined with a culture that celebrated those characteristics, its not hard to see why this narrative developed the way it did.
But let’s look beyond the villain, and beyond the culture that shaped her, into the dark heart of the problem. The billion dollar ambitions of the investment community, the Silicon Valley cult of ‘unicorn entrepreneurialism’ and the ruthless motivations of VC’s.
Two years ago I attended the Summit conference in LA. An exclusive gathering of the world’s entrepreneurial ‘change-makers’, basically, a backslapping opportunity for Millennial entrepreneurs and opportunistic investors. Predominantly from Northern California and related hubs and hotspots of similar culture.
What struck me most was the very polished veneer of success cloaking all in attendance. The organisers, the speakers, the attendees, even the staff, all had an air of Elizabeth Holmes-esque confidence.
Yet as I drilled deeper and interrogated people on their businesses, their success, their ambition, I was stunned by the refusal to consider risks, threats, problems, disruptive forces, or any possibility that failure even existed. I can only describe the atmosphere as negatively tense with positive optimism.
And behind the majority of bright-young-things with Jobsian ambition, was a layer of dull-old-things with millions of dollars waiting to be turned into billions. And almost all of them reminded me of the venture capitalist interviewed in the film who first backed Holmes and Theranos, Tim Draper (the guy with the bitcoin tie!!!)
The first red flag for me, was his claim that he ‘primarily buys into people rather than ideas’!
The bright-young-things hear this, and in their own naïveté, think that confidence is what they need, not competence. The very thing that lead to Holmes’ failure.
Statements like this, and all investors say it, leads to graduates trying to emulate the characteristics of narcissism. Their ambition is to have a personality disorder!
It’s no wonder that less than one in ten of these businesses fail.
Interestingly, there’s a willingness to offer financial support towards success, but there doesn’t seem to be much emotional support upon failure.
Although it may claim to be about people, investment is mainly a numbers game. And numbers people get excited about big numbers. It just sounds more attractive to say that people and great ideas are their focus.
This is where the investment world is fooling themselves, and the entrepreneurs they invest in.
This is one film, about one person, and one company that has succumbed to this culture. Perpetuated by this investment community, very few of whom have actually had significant losses as a result. In fact, their investment strategies, which are based on logic and probability, allow for many failures so long as one success is stratospheric. The VC’s may not have the ideas, but they do have experience, and that gives them competence and confidence.
I’m sure the producers could make a hundred similar films about similar characters and similar businesses that no longer exist.
As you can probably tell, I’m painting Elizabeth Holmes as a victim here, but only partially.
She is very complicit in this failure, but to attribute it solely to her would be low resolution thinking.
I am always keen to say that I am an inventor, not an entrepreneur.
The difference, for me, is that ‘better way’ beats ‘better off’.
The Theranos affair is born of this financially warped view of what success looks like.
Kevin Starr of the Mulago Foundation has a simple but effective criteria, based on four questions, to evaluate investment viability in an invention:
1. Is it needed?
2. Does it work?
3. Will it be used?
4. Will it reach those who need it most?
Each question requires an unequivocal ‘yes’ to ensure success.
For Theranos, question two was an unequivocal ‘no’.
Noticeable by its absence is the question, ‘will it make money?’
My own development model has five, sequential steps in the invention process;
Information, understanding, hypothesis, validation, execution.
By removing validation and skipping into execution, Holmes was never going to deliver value.
And that brings me to my second issue. The name of the film.
The title ‘The Inventor’ has an offensive double meaning.
The first, that being such a thing is in itself a foolish and laughable pursuit.
And secondly, that everything about Holmes is a pretence.
Her idea is a good idea, however, no hypothesis can be validated before its inception. She couldn’t have known if it would or wouldn’t work when the idea came to her.
This is the innate risk that all ‘creative’ people take. It is stepping out of the known, into the unknown. And progress is only made when that act is undertaken. That takes bravery.
George Bernard Shaw once said “The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.”
But beyond literary quotes, this willingness to take a risk, a leap of faith, is at the foundation of human progress. It can be seen throughout history in the myths and legends of our heroes. We are wrong to see success and failure as different, they are both the product of intent.
Intent should be our measure.
And this is the question that remains unanswered about Elizabeth Holmes, what was her intent?
Was it to change the world with a disruptive invention?
Or was it to achieve success, wealth and fame, like her hero, at any cost?
The answer is not, and never is, black and white.
Personally, I think there’s a duality to all things.
There is selfishness in selflessness, and vice versa.
There is failure in success and vice versa.
There’s a good guy in every bad guy, and vice versa.
Whatever you may think of Theranos, and Elizabeth, it, and she, challenged the healthcare establishment, and presented a horizon that phlebotomy, and many other industries will inevitably steer towards.
Clay Christensen of Harvard defines the characteristics of a disruptive innovation as ‘typically cheaper, simpler, smaller, and, frequently, more convenient to use’.
The Edison certainly promised to be all of those things, it just didn’t work (I’m sure Elizabeth would add a ‘yet’ to that sentence).
Someone will realise Elizabeth’s dream in the near future. Simply because the idea now exists in the world. She put it there. That’s what inventors do.
Inventors hypothesise.
Inventors take risks.
Inventors fail.
Inventors succeed.
Inventors try.
Inventors change the world.
The world needs inventors.