Building An Idea Assembly Line

When we look at the history of technology successes, we are reminded time and time again they come from incubator areas.  Not from the artificial technology incubators that VCs might set up to house new start up companies, but from regions which are good at incubating companies.

What these regions have are some combination of:

Universities

Big Technology Companies

Research Labs

Now – the advantage of having these sorts of institutions are they put lots of bright people together, playing with technology.  And specifically, the people they put together playing, don’t have to be entrepreneurs – they are getting paid some sort of wage (good or bad) to come up with new things.

The typical VC approach is to wait until there are companies formed by the few of these people brave enough to sacrifice their working wage and go it alone.  The hope is that the best ideas have risen to the top, and have been picked up by people capable of running companies.

But, if you talk to a VC, a common issue which causes them not to back a start up, is the poor quality of the team, not the quality of the idea.  And many many companies wind up pivoting to follow a different idea from the reason they got together.  You need a combination of good ideas and good people throughout the start up’s life.  You need the idea generators to stay in the company.  And you need a strong business team to take on the best ideas.

I wonder if the solution is to come up with an artificial equivalent of the research lab in order to breed ideas, and form teams.  I call this the Idea Factory.

Imagine an office (perhaps a big, brightly coloured open plan office – or perhaps something different) where some number of bright people are employed.  Their job is to have ideas, to prototype them, and to demonstrate them to one another. They also spend some time on building reusable frameworks to make prototyping new ideas easier and easier.

The time spent on prototyping ideas should be short (perhaps measured in days), and we should be quick to drop ideas.  People should feel free to provide support to each other, in taking the ideas they like and adding to them, or improving on them.  Forking ideas, and using their own skills, or even just making suggestions for other people to fork.

Over time, teams would grow, and some ideas would rise above others.  These ideas can then be shown to the world.  At conferences.  In papers. On YouTube. Or by going live on the web.  The question becomes ‘what is the minimum needed to get this idea out there?”

And this is where the VCs come in.  VCs already know people who are good at forming businesses, people who know what to do next.  They can take a team with a good idea and match them up with the business skills they need to move one step on.

Now – the important point here is that, all the time people are working in the idea factory, they are being paid.  You want people in the factory with a range of experiences – from fresh hungry graduates, through to the world weary sorts who have seen everything and know how things really work.  So there are going to be a range of salaries. Perhaps, because the work environment is unusual, you might be able to get away with offering a lower salary then the market would usually require. The question of salaries is where the VCs take a risk – how much time and money will these people need per idea?  By the time the idea is being fitted out into a standalone start up, the risk should be much reduced, and the VCs should be happy about getting a higher rate of return.  [Also, one presumes that an idea factory would be a good source of patents, if one of the members were to be a patant lawyer]

Idea Factories might be the way to inspire entrepreneurial growth in towns currently lacking it, or for a small group of VCs to monopolise start ups (and get a better share of the equity then they might otherwise manage)

But wait – Idea Factories might not just be good for VCs.  Consider your big company – not quite a company the size of Google, but the sort of tech company which regularly takes over large convention centres to support their customer base.  These companies often need new ideas.  They could set up internal idea factories along the same lines, getting people to play with the sort of technologies they are interested in.  It would lower the risk of disruption, and – even if all the ideas came to nought – give them a way of showing they support innovation.

This is an idea which I think – based on rough estimates -  has legs and is worthy of further investigation.  Please contact me if you think you might want to play a part in bringing an Idea Factory to life – either as a venture investor, or within your company, because I would very much like to help.

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