Vital Signs: Cisco's 1100 New Business Ideas (I-Prize)

Here's another example of Open Innovation, this time courtesy of Cisco. Cisco has been running their I-Prize competition to generate the next new crop of business ideas (Q&A here):

Q: What is the Cisco I-Prize?

A: Cisco knows that the global community is an amazing resource of creativity and innovation. Therefore, Cisco is looking beyond its own resources and turning to the Human Network to identify its next major business opportunity. Before you submit your idea, consider what problems it addresses, how it's new and different, and who comprises your target market.

Cisco will select up to 100 semifinalist teams that will work with Cisco experts using state-of-the-art collaboration tools to build a business plan and presentation. Next, up to 10 finalist teams will present to a judging panel for the ultimate prize: the opportunity to start a new business unit with access to the resources that Cisco has to offer.

Raising the stakes on efforts of Dell and Starbucks I described previously, Cisco has put a value on the potential new businesses by providing a financial reward for the best business ideas:

What's At Stake

The winning team may have the opportunity to be hired by Cisco to found a new business unit and share a $250,000 signing bonus. Cisco may invest approximately $10 million over three years to staff, develop, and go to market with a new business based on your idea.

During the project, Cisco reps wrote:

Now two and a half months later we know that more than 1600 people have entered from almost 90 countries. There are many, many high-quality ideas worth considering as semifinalists. And the level of community discussion and interaction has been unbelievably high. Global collaboration is really working. Feedback from everyone has been extremely positive.

More recently, the voting process was discussed:

In I-Prize, there is a voting mechanism that lets participants raise (or lower) the overall score for an idea. This is not how we choose the best ideas. If so, why did we bother to put in the voting system? Let me explain: we have a set of internal questions that we asked for every idea: is it a big market, can Cisco get a good share, how close to our existing businesses, can we ensure enduring differentiation, etc. The answers to these questions were used to determine the overall score for an idea.

We then went back an looked at the user-voting and we also looked at which ideas had attracted the most feedback and discussion. We used this to check whether there were ideas that had attracted a higher community vote (but that maybe had been scored lower by our own internal evaluation). We also considered ideas that we had scored lower but which had attracted a lot of responses and discussions. We then chose some ideas in these categories to add to our list of semi-finalists.

The reason for doing this is that we wanted to combine expert opinion with the wisdom of crowds (and we wanted to see if there was any strong disagreement between the experts and the community!). If your idea got a low community vote--rest assured--we evaluated every idea on its merits without considering the vote. If you attracted strong interest from the community, we listened to that as well.

It's very interesting to see some of the stats posted by Cisco:

Team members from the Semi-finalists are a very diverse group:
- Competitors from 13 Countries on 5 Continents
- 20% of the teams are multi-country
- Teams ranging in size from 1 to 9 people
- Competitors ages were evenly distributed between people in their 20s, 30s and 40s or higher

For those of you curious about the ideas that were selected:

- Ideas fell into a broad range of categories: Comms Infrastructure, Connected Home, E-Learning, Mobility, Security, Services, Emerging Countries, Unified Communications, Video, Virtualization and Web 2.0
- When an idea was submitted had little bearing. Ideas were evenly distributed across the competition time frame
- Some ideas had lots of information, some had relatively little (at least publicly viewable) but some contributors who appeared to publish little did supply us with private information to help guide our selection
- Comments, votes and private information made the most difference when we were evaluating very similar ideas
- There were some great business ideas, but not so great for Cisco. We encourage those that believe passionately in their idea to continue working on them
- There were a few very good ideas that we have already been working on

As of writing this, the contest was still up and running and in the semi-finals phase:

The results are in: After reading, discussing and scoring over 1100 new business ideas, we have selected 32 teams as Cisco I-Prize semi-finalists.

Congratulations to the teams that have been selected. The Cisco team is very excited to be working with you on your semi-final presentations.

Interesting to see that they chose 32 teams out of a maximum target of 100. One can only assume that the only 32 ideas qualified.

Hope to read about an update soon!


P.S. Thanks to Paul Tran of BrightIdea for this heads up!

Vital Signs: Dell's 8,970 ideas and Starbucks' Top 20 Ideas In Action

As it relates to measuring innovativeness and creating growth strategies, measures of corporate performance, or vital signs as I refer to them in this blog, should include a sense of how good the organization is at generating ideas and converting them to products that generate cash flow.

I have previously written about Idea Capital and the value of ideas.

This posting is about how Dell and Starbucks are using Salesforce.com's Ideas application to generate new ideas for themselves to make them more innovative and competitive.

Salesforce.com describes it like this:

Who is it for?

Innovation is vital to the growth and success of any organization—large or small. The more people you can engage, the stronger your feedback loop becomes.

Employees
There are lots of ways you might leverage Ideas internally. Create a community for “ Sales Advice and Winning Strategies” to capture the knowledge of your top sales reps. You could also create a company wide community with categories for each department so that your employees can submit ideas to Marketing, Product Development, or HR - regardless of where they sit within the organization.

Customers and Partners
Ideas can be extended to your customers and partners as well. Many companies are interested in using it to capture customer feedback, You could also use it to facilitate discussion between customers, deflecting questions to experts in the community while driving down support costs.

At Dell, as of March 30, 2008, they're Ideastorm website claims to have received 8,970 ideas which have been promoted 615,865 times and have been commented upon 69,514 times by other users.

Of particular interest is the user rankings table . Dell has exposed the list of contributors in its community, complete with a total points ranking, votes cast, and articles submitted. Currently, user dhart has 49,774 points, 109 votes cast, and 7 articles submitted. This could mean that dhart has the most quality ideas to help Dell become more successful.

Over at Starbucks, they launched a similar idea site on March 19, 2008, also on the force.com platform. MyStarbucksIdea begins with the following invitation to participate:

You know better than anyone else what you want from Starbucks. So tell us. What’s your Starbucks Idea? Revolutionary or simple—we want to hear it. Share your ideas, tell us what you think of other people’s ideas and join the discussion. We’re here, and we’re ready to make ideas happen. Let’s get started.

Starbucks also delivers a blog called Ideas in Action to share how the ideas are being evaluated and implemented. The first entry by CEO Howard Schultz encourages potential idea generators here:

At the core of the Starbucks Experience is human connection. Every week, nearly 50 million customers are connecting with over 170,000 partners (employees) in Starbucks stores around the world—creating an unparalleled sense of community.

This unique Starbucks community has inspired many people to suggest that Starbucks participate in the phenomenon of online communities. Well, now we’re ready to begin.

Welcome to MyStarbucksIdea.com. This is your invitation to help us transform the future of Starbucks with your ideas—and build upon our history of co-creating the Starbucks Experience together.

And just like in our stores, our curious and passionate Starbucks partners are here. Engaging in daily conversation—bringing the warm, human connection of a great Starbucks experience to this online community.

So, pull up a comfortable chair and participate in My Starbucks Idea. We’re here, we’re engaged, and we’re taking it seriously.

Two days later, a Starbucks spokesman posted in the Ideas in Action blog:

We are completely thrilled at the number of ideas (thousands!). We are stunned by the level of conversation (half of the top 20 ideas have 50 or more comments each -- 50!). We are stoked by the amount of participation (tens of thousands of votes).

What's particularly interesting about both of these examples is that the companies have gone outside their own walls, beyond merely engaging their own employee base (although they should obviously do that!) to engaging their customers in creating ideas to help them be more successful. They're gutsy moves, opening themselves up to potential public criticism (e.g. "DO something about the click noise..." idea)

Starbucks' fine print regarding its ownership of your ideas is here:

The submission of your Idea to Starbucks is entirely voluntary, non-confidential, gratuitous, and non-committal. You understand that Starbucks may be working on the same or a similar Idea, that it may already know of such Idea from other sources, that it may simply wish to develop this (or a similar Idea) on its own or it may have taken/will take some other action. In return for Starbucks' review and consideration of your Idea, you acknowledge that you have read, understand and agree to the terms enumerated below, and further agree that these terms shall apply to any additional material previously or later submitted, until such time as Starbucks otherwise agrees in writing

The challenge in these implementations is that the companies do not place bounties on solutions (as in the case of Innocentive or the $100M innovation fund for Apple iPhone native applications mentioned in this blog) but view it more as a conversation, with no promise of financial reward to their external contributors. It will be interesting to see if these attempts at incorporating the "voice of the customer" into the innovation cycle will pay off for Dell and Starbucks. It's not clear whether Finance is at the table helping to place a value on these ideas but if they're not they should be. My view is that the bounty-approach will ultimately generate more interest.

Vital Signs: Apple's 1301 web apps and over 100,000 SDK downloads

How strong are Apple's (AAPL) corporate vital signs? Based on the two metrics in this headline their getting stronger!

As I've mentioned here before, I've expanded my definition of corporate vital signs beyond traditional lagging financial measures to include leading indicators of competitiveness and innovation. As investors appreciate when they estimate growth of future cash flows, there are no financial measures on balance sheets and income statements to reflect a company's reach and access to talent beyond its four walls. Traditional financial measures can't reflect the value of having a global developer community building software for your hardware device. A new set of corporate vital signs is required.

Let's take a look at Apple's newest innovation, the Apple iPhone and iPod touch. While much more than merely interesting, their success could have been limited by the ability of Apple's limited in-house resources to develop new and exciting applications. But with the recent launch of the new SDK, Apple has poured the foundation for an entirely new innovation platform. No longer does Apple need to rely on in-house developers to create native applications.

Without the SDK, the developer community can already make web apps available to run on the devices. These applications are being displayed by Apple at http://www.apple.com/webapps/. As of March 30, 2008 there were 1301 web apps listed in the Apple webapps website.

This is interesting but not where the real value of Apple's innovation lies. What's more interesting is the upcoming June '08 launch of Apple's store for native iPhone applications. Development of these native applications is made simpler through the iPhone Software Development Kit (SDK) and Apple claims 100,000 downloads of the SDK in the first 4 days since its launch:

“Developer reaction to the iPhone SDK has been incredible with more than 100,000 downloads in the first four days,” said Philip Schiller, Apple’s senior vice president of Worldwide Product Marketing. “Also, over one million people have watched the launch video on Apple.com, further demonstrating the incredible interest developers have in creating applications for the iPhone.”

Apple also previewed the new App Store, a breakthrough way for developers to wirelessly deliver their applications to every iPhone and iPod touch user. Developers set the price for their applications—including free—and retain 70 percent of all sales revenues.

Leading developers such as AOL, Electronic Arts, Epocrates, salesforce.com and Sega have already demonstrated amazing applications using the SDK, and developer response continues to be phenomenal with more developers embracing the platform.

As Apple takes in 30 percent of all applications sales, a new leading measure of Apple's cash flow will certainly be the "number of 3rd party applications" and "the price of the application"

The fun doesn't stop there. Apple pretty much guaranteed strong interest in the platform by bringing the famed KPCB venture capitalists to the table. At the launch of the SDK, KPCB announced that they have created a $100 million iFund to invest in companies that are able to bring new applications to the platform:

"A revolutionary new platform is a rare and prized opportunity for entrepreneurs, and that's exactly what Apple has created with iPhone and iPod touch," said John Doerr, Partner at Kleiner Perkins Caufield & Byers. "We think several significant new companies will emerge as this new platform evolves, and the iFund will empower them to realize their full potential."

And Steve Jobs proudly declared:

"Developers are already bursting with ideas for the iPhone and iPod touch, and now they have the chance to turn those ideas into great companies with the help of world-class venture capitalists," said Steve Jobs, Apple's CEO. "We can't wait to start working with Kleiner Perkins and the companies they fund through this new initiative."

Finally, not content to remain a consumer device, Apple announced that they are building Enterprise-grade connectivity into the next generation of the device to be available in June '08.

Just imagine this...the iPhone is now on the verge of a development boom. This development, spurred on by a $100 million venture fund, will deliver a whole new suite of mobile applications for the consumer as well as the enterprise. By opening up the development platform, Apple has significantly strengthened its competitive position and set itself in motion to become the leading provider of handheld entertainment and productivity devices for some time to come.

P.S. Apple is most certainly borrowing a page from Salesforce.com and its force.com platform. Salesforce.com has been a pioneer in allowing developers to build and sell applications that will run on Salesforce.com's platform. More on that in another post.