Lean & Innovation NOT mutually exclusive?

Here is an interesting adjunct to my last post in the form of a comment from Gergana Hadjova addressed to the original IPKat post (reproduced in full here but fully attributed, so hopefully the lawyers who run and contribute to the excellent IPKat blog will forgive me):

“I recently came across an interesting article discussing two major points of interest to me: “Lean Start-ups and IP”. In his blogpost Neil Wilkof poses the question whether lean start-ups mean less IP. After reading the post, I realized that with IP Neil means patents as the IP which protects innovation. So the question could be rephrased as: do lean start-ups mean less innovation?. An intriguing question, isn’t it?

After presenting the basic notion of the lean start-up, pioneered by Eric Ries, Neil introduces some points of criticism towards lean start-ups — for example that “the lean approach has a very low ceiling for innovative potential” and that “it can bias you towards the incremental rather than the transformational.” Neil concludes: 

“The suggestion that start-up activity should be aspiring to a form of assembly line for knowledge workers, engaged in constant empirical iterations in the search of “the product”, would seem to narrow the scope for the kinds of creations and inventions that are the staple of IP rights. Incrementalism has its place, but it should also have its limits, lest it have a pernicious dampening effect on the ability of knowledge workers to continue to create and invent”. 

I enjoyed reading the post and can only recommend it. Nevertheless, I do not really agree with the narrow view on lean start-ups presented in it.

Call me biased, with my excitement with the lean start-up movement, but I think that lean start-ups can be engines for innovation. After all, the most disruptive products are those where the need for them was unknown. This is actually the aim of lean start-ups: to find the product customers really need while engaging the customer at the early stage of product development. Lean start-ups validate their ideas by interviewing customers, gathering and analyzing data and always questioning their assumptions. 

Isn’t this a method similar to the scientific one? Of course, sometimes the end product of a lean start-up is just a small improvement in an existing product or just a small useful product. This is not surprising since lean start-ups are characterized by not requiring and disposing of large amounts of outside funding. It is clear that lean start-ups are not feasible in the Biotech or Pharmacy industries, where extensive and expensive R&D are essential. 

However, small improvements can also be innovative. Innovation is finding a better way of doing something (Wong, S.K.S. (2013), “Environmental Requirements, Knowledge Sharing and Green Innovation: Empirical Evidence from the Electronics Industry” in China, Business Strategy and the Environment, Vol. 22, No. 5, pp. 321–338). It is also the application of better solutions that meet new requirements, in-articulated needs, or existing market needs (Maranville, S (1992), “Entrepreneurship in the Business Curriculum”, Journal of Education for Business, Vol. 68 No. 1, pp.27-31). And this is exactly what lean start-ups do. Even if their end product could not reach the high threshold of patentable subject matter, it still can constitute an innovation. And don’t forget that an IP right for incremental innovations also exists. It is called the utility model.”

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