The trouble with assuming “innovation” is understood

At Particles Design Lab and District 3, we are constantly having debates about the definitions and roles of design and innovation in society. These are the musings of our Design Strategist, Charlie Gedeon.

In light of this article that says something can be called an innovation only after it has proven to add value, I find myself thinking about how we use that word within the startup accelerator program at District 3 [D3].

One of our original founding documents contains the following quoted definition of innovation from Wikipedia:

Innovation can be defined simply as a “new idea, device or method”. However, innovation is often also viewed as the application of better solutions that meet new requirements, unarticulated needs, or existing market needs. This is accomplished through more-effective products, processes, services, technologies, or business models that are readily available to markets, governments and society. The term “innovation” can be defined as something original and more effective and, as a consequence, new, that “breaks into” the market or society.

This seems sufficient when thinking about innovations as things that only have market value, but then what about those trinkets and charms that hang off a phone?

They literally do nothing but add visual flair, but in markets in East Asia, they’re easily justified by market demand. In fact, whenever a new cultural meme emerges, someone is racing to release a charm that contains a plastic incarnation of that meme to dangle helplessly off someone’s phone while they forget its poor and miserable existence within moments of its purchase.

Innovation as a product of market value

You might point out that my claim about charms having no value is biased because to me they don’t, and that is absolutely true. If we follow that train of thought, then an innovation is merely something that is valuable or novel to the ones that buy it, bringing us back to the idea that the market deems what is innovative. With that line of thinking, if we come up with a process that cuts toxic waste from a factory by 70% per unit at an additional unit cost of 1¢, the company will decide not to do it because of “economics” and this massive environmental benefit is then suddenly not innovative. Coke undercutting the price of water by 10¢ in poor neighbourhoods, leading to increased sales? Now that’s beverage innovation! Who cares about the massive increase in cost to people’s health? Health isn’t a market, silly! I can’t get a car for 14,000 health.

Being part of a startup accelerator, we constantly deal with pitches for business ideas that are essentially the equivalent of a phone charm: Arguably useful, sort of nice to have. This doesn’t seem like too much of a problem until we consider that the difference is that “arguably useful, sort of nice to have” is okay when it’s 50¢ worth of plastic (environmental impact not accounted for), but often these companies are spending months of development time and emotional energy for something that will go out of fashion just as quickly as a Hello Kitty phone charm. Actually, that’s not true as Hello Kitty is more immortal than any Uber for Umbrellas startup.

Companies are spending months of development time and emotional energy for something that will go out of fashion just as quickly as a Hello Kitty phone charm.

That said, there are some important startups in recent history where things do get quite murky. Uber (not for umbrellas) is a good example, especially when it launched early on. In many places, it was combatting really archaic and corrupt taxi companies, providing incredible value to the riders, while vigorously damaging the livelihoods of many innocent and law-abiding taxi drivers. Innovation? Some say “yes”, some say “no”, some say “yes, but innovation doesn’t have to be good”.

Imagine what the original pitch of Uber must have sounded like, and how a startup accelerator might have reacted to it. It would have probably gone something along the lines of “we will make a service that helps people get from A-to-B without having to hail a cab, or dealing with cash.”

Personally, I could easily see how if Uber built a good enough MVP (to use the sexy lingo for ‘basic prototype’) and went out to see if it had market viability, the accelerator would have let them in, no questions asked. How happy would the accelerator feel now if, in light of the media flack Uber has been getting, people started asking them “why didn’t anyone make them do a social impact analysis?”

TOMS Shoes is another good example where the promise of good also came at a cost. In making a model where a shoe purchase by someone meant a shoe donation for someone else, the company unwittingly destroyed entire shoemaker economies in the countries where it made donations. Innovation? To the ones buying the shoes it made them feel good, gave them yet another vapid reason to Instagram, and net them a fairly mediocre shoe. To the ones that got free shoes? Probably! It meant they can go to school without bloody feet. To the shoe makers who were in nearly identical economic situations as those who got the donations? Not at all.

Achieving an understanding of innovation

As a society, we need to make up our minds with regards to how positive the word innovation sounds to us. Is it for breakthroughs that our society deems akin to the coming of Jesus Christ, relegated to economic juggernauts like the iPhone, the VW Beetle, Nike’s Air Jordans, etc? Or is it broad and far reaching, including commodities like a lightbulb that outputs the exact same amount of light for 5W less than its predecessor? Is it highly nuanced like Uber, and TOMS?

D3 as an organisation is only four and a half years old, but we’re already coming across these discussions at increasingly higher frequencies. Why do certain startups get accepted? Is it an investment in the team itself, their idea, or the problem they’re trying to solve?

Perhaps the ultimate question is: As an incubator and accelerator, what is our role in identifying what is “innovation” for a new startup?

We at D3 are currently betting that with the right coaching, provoking, and tools, the teams that get accepted will find the answers. Our bet is that the idea itself doesn’t matter, but focusing on good people does.

We’d love to hear your take on these questions so leave your ideas in the comments or send them to particles@d3center.ca so we can connect.

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