In the first part of this Problem/Solution article-series, we shed some light on today’s innovation landscape, and, using the ping-pong analogy, we’ve started to outline the flaws of the system as it is now.
In this second part of the series, we will break down the Innovation chain and take a closer look at the main elements involved in it.
4. Alternative Finance, blind trust, and the financial monolith.
In fact, other than previous moments in time, today’s easier access to information and data, combined with a worldwide, instant communication between people in different sides of the globe, has the potential to unlock new, interesting ways for individuals to create, contribute, and collaborate in generating innovation. Obviously, and that’s the very reason why we are writing about it, this potential hasn’t been unlocked yet, but let’s see how the “innovation game” has been played in our times, and what we have been doing right or wrong during the process.
First of all, coming back to the triangle of innovation — (1.) product, (2.) funds, (3.) team — is fair to notice how in the last decades we have seen a continuous attempt to lower the barriers in entering the market of innovation, disregarding the industry, again, anything spanning from high-tech to entertainment. This has been done consistently, especially regarding point (2.) — raising funds for an idea/project — in fields such as Alternative Finance, a niche of Fintech, and one of the fastest growing markets in the world.
Examples of such attempts are reward-based and equity-sharing Crowdfunding and p2p lending in traditional industries, and ICOs, STOs and other variations in crypto / p2p-based financial markets. In these cases, the inventor(s)/creator(s) of the idea propose(s) it publicly in order to raise interest and crowd-raise funds from a global audience. Now, being an alternative way to fund an idea/project, these practices have structural, in-built flaws. Namely, they are:
a. being public, the idea/project may easily be taken off their showcase in a platform and developed elsewhere by someone else with more funds/resources.
b. hand-in-hand with the growth in visibility of the bigger players in the field (Kickstarter, Indiegogo, … on Crowdfunding side, and loosely Ethereum, Wings, … on ICO side) the competition within these platforms kept growing as well, generating not only scams and malpractices, but also starting to require an initial budget — higher and higher with time — for building a prototype, plus a solid team to back the idea in order to move forward with the crowdfunding side of the process.
This way, despite they somehow shook the monolithic, traditional approach to innovation, alternative financing practices started to require the other two sides of the triangle — product+team — in order to get (part) of the third, the funds. Moreover, they are by default non-secure for users, creators, and contributors, as these three categories have no safe, trustless way to transact directly the one with the other or being rewarded for implementing someone else’s project.
The problem in this, once again, is that the process is in itself (a.) fully centralized and fully dependant on the platform and a “blind trust” in a third-party, and (b.) being a micro-service, rather than an overall infrastructure, it gives little to no incentives to the different users to collaborate and build something better as a whole, rather than focusing on a short-sighted individual benefit.
5. Gig Economy, downward auctions, and incentives.
As for the other angles, (1) building a product and/or (3) setting up a team, there is no lack of examples to bootstrap the process as well. Let’s start by approaching these two sides of the triangle at once, referring to practices which come directly from the Gig Economy — an umbrella term which defines task/gig-based contribution in a project/product/service, in which freelancers and/or outsourced team support independent innovators or core teams in achieving their goals.
Now, again, despite these services offer visibility and access to financial benefits for freelancers, and affordable human resources for developing/implementing a product, they:
a. do not give enough incentives to contributors for them to be responsible for their own contributions, as they work on commission for a temporary employer. This makes them external, cheap workforce, without an actual weight within the projects in which they are involved.
b. despite freelancers/contributors are able sometimes, in certain platforms, to negotiate their price, this price is not an actual benchmark determined by the community or the impact or the contribution itself, but just an agreement apriori, requiring trust from both sides.
Again, we can see how these solutions do not provide real access to innovation to their participants, which are rather used as cheap workforce, without an actual weight in the project in which they are involved. Moreover, their incentives (read, financial benefits) are not determined by the market itself, the community and/or an actual exchange of value — but in most cases their rewards are based on a sort of downward auction, where the lowest bidder “wins the gig” favoring affordability over quality, ignoring the impact this has on the product itself, and on the contributors/economical ecosystem involved.
That said, instead of trying to fix the problem compartment by compartment, cubicle by cubicle — a-Qube uses Project Management frameworks and tries to create an open-ecosystem for distributed innovation, lowering the entry-barriers for independent players, and enhancing a process through which business-focused ideas can easily be implemented into valuable digital assets.
In one sentence, again, the value is built along the process, in a cooperative way, rather than bouncing the innovation ball back and forth in a ping-pong kind of match.
In the next and final part of this series, not only we will introduce a new, juicy analogy to the innovation play, but we will also focus on market validation, which we consider the main criterion in supporting ideas to get back their role as the structural pattern of innovation!