In a highly competitive market, and one where market dynamics are changing faster than ever,
innovation is the key to long-term sustainability and success. History has proven that
companies that have a culture that encourages innovation stand a far better chance at
sustaining their leadership position or emerging as market leaders.
Harvey Firestone, an American businessman, and the founder of the Firestone Tire and Rubber
Company once said, “Capital isn’t so important in business. Experience isn’t so important. You
can get both these things. What is important is ideas. If you have ideas, you have the main asset
you need, and there isn’t any limit to what you can do with your business and your life.”
Businesses recognize that. Most progressive businesses have put in place people, processes,
resources, and investments and encourage a culture that fosters innovation.
Considering the fact that companies need to innovate faster than ever before, many companies
now are also looking for absorbing innovation that is independently created outside their
company. Smart companies recognize that they cannot hire all the smart people, and that
smart and relevant innovation is also happening outside of their organization. Their efforts are
therefore directed not just in innovating within the organization, but on engaging with
innovations from outside as well.
By ‘outsourcing’ innovation, many leading companies have managed to minimize innovation
costs and associated risks by as much as 60% to 90% while simultaneously reducing cycle times.
In addition, they leverage tens to hundreds of times by internally investing the resultant
savings. By engaging with innovators outside the organization, larger companies are able to
look at a significantly larger pool of concepts and products, and thus are able to significantly
reduce the cost of deploying innovative solutions and products for their businesses.
To enjoy the benefits of outsourcing innovation, the executives and the front-line should be on
the lookout for the latest and most innovative technologies emerging across the globe and then
figure out which ones they can leverage to derive the maximum synergy.
What is important is that you catch innovative companies’ young, i.e., when they are still in the
startup or early-growth stage. Identifying and engaging with companies at an early stage has
significant benefits for a large company, not just in monetary benefits, but also in being able to
guide the product / concept design to best suit their own use case.
Larger companies who may not have the ability and bandwidth to scout for innovation
independently can easily collaborate or partner with enablers in the entrepreneurial eco-
system like accelerators, incubators, early-stage funds, and also the emerging online platforms
that showcase startups and early-stage companies. Domain specific ‘hackathons’, mentoring
clinics, and boot camps are some other ways in which larger companies can connect with
Once the organization has identified which of these innovations fits into their scheme of things,
there are 3 options before them:
a) Acquire the company – in some situations for competitive reasons and to get a longer
lead-time compared to competition it might make sense to acquire the company.
b) Use the product – – sometimes it is worthwhile to simply use the product as an add-on
or bolt on to the existing eco-system to provide a unique offering or enrichment to the
c) Partner with the company – This option involves jointly developing the product or
innovation further, keeping in mind your specific requirement. This way, the innovation
can be customized to suit your needs.
These are interesting times, particularly for software products. The pace and quality of
innovation in India has gone up significantly. At iSPIRT, we have seen the quality of
entrepreneurial talent, ideas and products, improve rapidly. We have quite a few global
standard companies as witnessed by the global scale acquisitions, and the pace at which newer
ideas are being introduced is very encouraging. It is also encouraging to note that a number of
larger companies have already connected with us to get an early glimpse into innovations. The
InTech50 event is a great initiative to showcase innovation to CIOs, product leaders and VC’s
that provide the platform for the innovators to springboard.