Five Key Elements of Open Innovation

I work with five key elements in open innovation business models:

  1. critical mass
  2. congestion
  3. externalities
  4. weak ties
  5. drivers

Critical mass is a restatement that open doesn’t matter if it’s solitary.   There has to be at least another player.  Generally, a number of other players.  We find that in adoption, the logic changes.  First there are those who test new things, hold fast those that work.  Then there are those that want to know what the leaders are testing and holding.  Then there are those that want whatever is emerging as the thing to have. Finally, there are those who adopt because it is the standard, the safest, best, lowest cost, least uncertain thing that does the job.

Critical mass marks these transition points in social (and therefore economic, imaginative, er, business) reasoning.   We might say, molecules of humanity do not have the same properties as individual instances of humanity, and longer network molecules of humanity differ in non-linear ways from shorter network molecules.    Critical mass is about the changing character of social logics.  Externalities are properties of these social logics and weak ties are a special form of externality that appear to be a sweet spot for the referral of opportunity, and in particular for the kind of opportunity that one cannot imagine looking for.   Weak ties, essentially, posit that the world that is, is much, much richer than one can possibly imagine, richer than one can even *know what to look for*.  Weak tie opportunities find you.   They are not a result of your priorities, your plans, your diligence, your efficiencies.  Nope.

IP is one of a number of ways of gating among these elements.  Think of it as a kind of “social diode” on analogy with “circuit logic”.   Given that IP is instantly a source of congestion, the first order of business is to find drivers that create interest that gets past this congestion and deploy IP so that the congestion doesn’t arise before critical mass.   Then it is a matter of balancing and routing critical mass and congestion to keep centered on value points, which may arise directly (sales of product) and may arise as externalities (enabling other transactions, such as support or related product), and finding opportunity (weak tie referrals).

Drivers are the most interesting of all.  The thing is, without voltage in a circuit all the logic one has doesn’t do much!  Drivers matter.  In this, it doesn’t appear that profits and power are the only ones out there, don’t make very good mission statements, and certainly aren’t the things that drive early uptake.  Not even utility.  There are other things at work, that both short- and long-network molecules of humanity respond to.

I expect to build out on these concepts in future posts.

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