The growing business handbook : inspiration and advice ... - Sparkler

68 Ideas and innovation
4. Proposition sourcing (involving entrepreneurs)
Every year, thousands of entrepreneurs spot a gap in the market and develop new
business propositions. But while the digital age, the Internet, social networking and
so forth have arguably made reaching the customer easier and more cost-efficient,
business start-up costs are now at a minimum of £5,000 for an individual operating
on cheapest options and £40,000 to £100,000+ for start-ups seeking to launch a
professional brand. Costs include website creation and, for online transactions, a
bank account, a payment system, telephone lines, brand and supporting infrastructure,
while some require a terrestrial retail space as well.
Those who lack the financial resources, creativity or know-how to bring their
propositions to market unaided are reliant upon partnering with other businesses, so
need to be assured of confidentiality when seeking to negotiate deals at
pre-commercialization stage. However, although open innovation is a good way to
harness the knowledge, know-how, skills and ideas of large numbers of people, if
ideas are considered to be free to be commercialized by those with the wealth and
resources to grab them themselves, what motivation exists for entrepreneurs to
participate?
A proper IP right with a regulated rewards mechanism needs to be in place if open
innovation is to attract entrepreneurs in this situation.
5. Concept sourcing (involving professional
originators)
Professional marketplace, user-centered, creatively articulated concepts to proof-ofconcept
stage
Here we arrive at arguably the most mutually rewarding of open innovation
partnerships – but also the most contentious on the IP front.
When professional originators (who predominantly work in the creative industries)
are commissioned by brand owners on a fees-for-services basis, they are paid for their
knowledge, know-how and skill in creatively executing a brief. In this model, brand
owners generally own or buy-out any IP arising. In open innovation calls, however,
or where professional originators generate their own concepts without a formal brief,
brand owners do not pay fees. Instead the originators seek to trade fully articulated
propositions based on their customer- and sector-led knowledge and know-how with
brand owners on a shared risk-and-reward basis.
In order for originators to communicate the value of such propositions, it is often
necessary to also communicate a good deal of the knowledge supporting them. And
quite often the propositions are not subject to patents, but might instead be proposed
brand extensions, a new business model, the evolution of an existing product or
service, or a new product, packaging or service proposition.
The problem confronting professional originators in these situations is that their
knowledge-based propositions are often treated in the same way as ill-defined earlystage
ideas proposed by those without the know-how, creativity or resources to take