The Noyce Principle of Minimum Information

In 1968, Robert Noyce, Andrew Grove, and Gordon Moore founded a little company called Intel. Each of them had their own approach to business, research, and innovation. Moore is known for coining Moore’s law. Grove is known as one of Steve Jobs’s idols and for meticulously managing the company into a 4,500% increase in market capitalization over his tenure. Noyce was the visionary. Noyce, nicknamed “the mayor of Silicon Valley,” was the one in the lab pushing intel’s engineers past all of their preconceived boundaries to make the world’s first and best microprocessors.

Noyce had a unique way of solving problems. He believed there to be two available ways to test an idea or solution. The first he called the “pretty” method. This was the traditional method most research engineers knew.  It entailed building out sophisticated machines to fully build and fully test the idea to within a closely controlled confidence tolerance. The second, the one he preferred, was considered by some the “quick and dirty” method. It became known as “the Noyce principle of minimum information.”

Summarized by Noyce, the “[m]inimum information principle attempts to guess at what the answer is to a problem, and then goes back into the science only as far as needed to see if that guess was right or not. If this does not solve the problem, one makes another guess, and then goes back again.” This principle became the prevalent method of solving problems at Intel. It makes perfect sense. If basic science tells you that there is a very small probability that an idea will work, you move on to another. If it tells you that there is a high likelihood it would work, then it is worth pursuing further. In this manner, fewer ideas need to be run to ground before a solution is found. 

This method of problem solving made intel agile. Everyone is aware of Intel’s innovation speed. They are the unchallenged pace car for computer processor speed and power increases. The minimum information principle provided Intel with two main benefits in testing new ideas. The first is speed.  It allows a company to go from ideation to testing and back to ideation much more quickly and frequently than the “pretty” way. This way, a company gets a working solution sooner and off to market faster. The second benefit is that the company does not generate a lot of useless scientific data and intellectual property that they would never otherwise use in the marketplace. This means less wasted resources and fewer floundering business units that need to be spun off – a mistake Xerox PARC is famous for. 

Open innovation is the perfect fit for the minimum information principle. Open innovation allows a company with an existing base of researches and developers to open up momentarily, gather ideas from outside, and go back to the science just long enough to see if the idea is likely to succeed. This makes it less dangerous and more rewarding to brainstorm – to create and to find more ideas.

Remaining closed makes you slow. No matter how many talented people you have working inside your organization on a given problem, statistically there will always be more people that can do it just as well, or better, outside of your organization. When asked whether open innovation makes the R&D process shorter or longer, Helmut Traitler – Nestle’s Vice President of Innovation Partnerships – said “Shorter, obviously. You find people who have talents and resources outside.  That’s what I said.  If you bring people into the team that can help you to solve the problem faster then you are in the marketplace much earlier than if you did it all on your own.”

ideaphore’s mission is to help companies explore new avenues for open innovation, to efficiently use the ideas they get from the outside world to build their products and services, and to build relationships with their customers by starting that two-way conversation. The minimum information principle is but one tool in a giant arsenal of innovation methods that we can help companies apply.

Reach out to us on twitter @ideaphoreLLC if you want to talk open innovation.

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WANTED: SOMETHING FOR NOTHING

We consistently get three types of feedback for ideaphore. 
 
The first is resounding excitement.  An outlet for creativity that lets you build up credibility in a community and sell your ability to ideate – the product of your inspiration – for money. It’s an exciting new platform for open innovation.
 
But we also get outright hatred for our stance that people should be able to sell access to their minds.  We get visceral disdain for thinking that inspired thoughts and the work product that goes into fleshing out an idea, big or small, can be sold on an open market.
 
This second, arguably negative, sentiment breaks out into two diametrically opposed views: (1) ideas have no value; and (2) ideas are way too valuable.
 
To the first group we say, “you get what you pay for.” It is a self-fulfilling prophecy that all ideas are valueless. If you believe your customers’ and potential customers’ ideas are worthless, then you will not pay for access to those minds.  Your product will be made and updated in a vacuum.  Beyond your own internal ideas, the ideas for product improvement that you do find out in the ether will be only the ideas, or portions of them, that people are willing to give away for free.  It’s funny to hear people say that ideas are a dime a dozen.  Where’s the bloody dime then?
 
To the second group we say, “get over yourself.”  Ideas are indeed plentiful and are generally not, on their own, revolutionary.  If you can do some preliminary research as to whether the idea has been tried before and which specific company could benefit from the idea, then the idea might have some value. If you can apply your expertise to the idea and spend time explaining the problem and the solution and why the company should care, then that work combined with your idea can be marketable. But a company still has to put an expert in the field on the idea, decide whether it’s good, make it work, and then put it on the market taking responsibility for it.  They are taking all of the risk.  For small ideas, you should not necessarily expect a piece of the pie. 
 
We believe that an open market where idea creators choose a fixed fee for viewing their idea and work product is the correct solution for selling small ideas.
 
The modern suggestion box has to be so much more than a box.  It must be curated by a community, backed by a algorithm for the feedback and a ratings system, complete with rewards and recognition for the idea creators, sealed with IP protections, simple, and beautiful. ideaphore is that modern suggestion box, and our growing community will make us much more.

WANTED: VALUABLE IDEAS AND THOSE THAT VALUE THEM. 

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Abstract Ideas are not Patentable, Long Live Ideas

On June 19 of this year, the Supreme Court passed down what some consider to be a landmark decision, Alice Corp. Pty. Ltd. v. CLS Bank Int’l. The short of it is that an abstract idea alone cannot be patented. This is not a new rule by any means. But figuring out what constitutes an abstract idea and what pushes an idea over the patentability edge has always been a struggle.  Though this recent decision did not provide much extra guidance, it did solidify what appeared to be a waning rule: you can’t, like, OWN a basic concept maaaaan.

One of the first, and perhaps the most famous applications of this rule was in 1854 when the Supreme Court told Samuel Morse that he could not hold a patent on the use of electromagnetism to transmit messages. Since then, the rule has ebbed and flowed at all judiciary levels, several times appearing to nearly fizzle out or change to allow patents on basic concepts that can be used to make money. But the rule has come back stronger than before. In 1972, the Supreme Court used the rule to invalidate a patent on a mathematical algorithm for converting numbers in binary-coded decimal form into pure binary form, stating that “[a]n idea itself is not patentable.”  Again in 2010, the Supreme Court struck down a patent on hedging risk in commodities transactions.  And now, in Alice Corp., the same court invalidated a patentee’s exclusive rights on using a computer-mediated transaction auditor to hedge default risk. 

This makes sense.  After all, the point of patent law, according to the U.S. Constitution, is “to promote the Progress of Science and useful Arts.” Arguably, patents bestowing rights to exclude others from using basic ideas would harm, not promote that goal. 

But nowhere is it written that unpatentable abstract ideas have no value. The law is simply that you cannot get exclusive monopoly rights on such ideas. We at ideaphore challenge the concept that an unpatented, or even a yet-untested, idea has no value at all. It is only because there has been no outlet for them – no way to turn them into money – no way to be recognized for them – and no way to protect them in transit to a company that could use them – that people have held back their best ideas. That is, until now. 

What can we do with an idea if it is too abstract or if we are not interested in spending the money to find out whether it is patentable? We at ideaphore are proposing a new system: pitch enough of the idea to get interest without giving everything away and then sell the rest, together with all of the thought and all of the work you have already put into it, at a fair market price. That is the basic premise of ideaphore.

Inspiration often strikes randomly and without regard for patentability. And the thought, work product, research, writing, and prototyping that follows inspiration is often very valuable.  When it is valuable, the inspired would often rather sit on the product of their inspiration than to give it away for nothing, even to someone who can use it.

Just because an idea is basic or small does not mean that a particular employee at a particular company has considered whether it would bring value to that company. Sometimes the best innovations come from answers to questions you never thought to ask.

Long live ideas. 

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Open Innovation is the New Paradigm

In 2003, the world of corporate research and development (R&D) took a giant, if somewhat quiet, leap forward. That year, Henry Chesbrough announced in his book that we were experiencing a Kuhnian Paradigm Shift. The kind of shift that is only recognized when the current principles can no longer explain what is happening. The kind of shift that is so important that it’s named after some philosopher dude. The old paradigm, Chesbrough dubbed “closed innovation” – and the new paradigm: “open innovation.”

In the closed innovation world, everything is done inside the building. You place your employees within the four walls you have built and they do everything. They think of the product. They keep it a secret. They research it. They build it. They test it. They bring it to market. They service it. They think of improvements. And they update it. And this all keeps going in a circle until, for some reason, customers stop buying your products.

Open innovation looks outside the four walls of your building for both the R and the D. It brings ideas from the outside and allows you to mix them with your internal ideas and knowledge to build products. And it provides a channel for you to build ideas in house and sell them to others. 

This seems obvious now – almost second nature – especially with everyone becoming electronically networked. But it went completely against the grain of the most successful and famous companies on the planet. Every company thought that they had hired the best, trained them the best, and that their employees had all the answers.  They only internalized ideas that came from employees they controlled, which makes the universe of creative minds very small. And what do outsiders know anyway? 

They know a lot.

Several societal changes have taken place that pushed us into this paradigm shift.

• Information and knowledge are now more widely spread out. Skilled employees have more mobility to go from one company to another. This makes company secrets more difficult to keep in-house.
• There is an increasing number of college graduates and skilled foreign workers.  And people can live and work from almost anywhere. There are more people who can solve complicated problems and they are more spread out.
• Increased access to venture capital means that things can move faster. The time it takes to get a product to market or even to change it after it is already out there has been shrinking at a thrilling rate. And the shelf life of technology has been getting shorter and shorter.

All these changes mean that closed innovation is not sustainable for most, especially small, companies. 

It’s not that Chesbrough invented the concept. Proctor and Gamble started its open innovation initiative back in 1999. But Chesbrough’s book drove a giant thumbtack into the R&D roadmap of every company. There is now a stark noticeable difference between closed and open innovators. You can tell an open innovator by their agility, notoriety, and the love of their customers.  And while some closed innovators still thrive, they are now outnumbered.

With the advent of the lean startup movement pioneered by Steve Blank and Eric Reis, building a startup product or service is about getting feedback from customers and potential customers. The customer is involved early and constantly. This provides businesses mobility that they never had before. If businesses can get customers and potential customers thinking about what problems they need solved and sharing those thoughts, the business can make moves within the industry faster, with more confidence, and with a higher success rate. A company that builds products based on the educated guesses of their own employees cannot keep up with an open innovator. It’s not (just) that employees make mistakes, it is that their thought process becomes constrained to trying to please their boss rather than the customer. Between crowdsourcing, crowdfunding, and the agile development/customer development stack, a startup or new venture cannot get off the ground without open innovation.

All this open innovation gets complicated for the customer and the business. We think the conversation between a business and its customers and other creative individuals should be simple and available to everyone. And that’s exactly what we have done. If you’re excited about collaborating to create tomorrow’s best products and services, wait until you see what we have in store. When we get going, we will go from experiencing a paradigm shift to having experienced it. 

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Learn How To Learn Without a Teacher

How do we learn what to do to make a living?

We spend a good portion of our early lives learning slowly by climbing a hierarchical ladder of teachers until we reach a specific trade.  From parental tutelage to broad elementary school studies to possibly slightly more focused college and even more focused graduate studies, someone is there to tell us what to learn, even if we don’t always comply. We answer to a set person until we reach someone willing to pay us and teach us at the same time.  This final apprenticeship often follows the same learn, test, reward progression as most of the schooling before it.  Because there is no apparent change from school-learning to on-the-job-learning (at least at first), many that make it all the way through to a job never perceive the subtle change. That fundamental difference between being and doing.

Sure, your boss will tell you what to do.  And the larger the corporate entity, the more predetermined your work will be.  It’s natural, and indeed expected, that you make your immediate superior happy in your work.  But at some point, you must put an ear to the ground yourself.  You must know what your boss knows, what makes your particular product or service valuable.  How is that different from the way we have all been taught to learn you ask?

That difference is who you are expected to listen to.  No longer is your goal to listen to a single person who will provide you with instructions on what to know and do to reach a success mark.  You must learn how to learn without guidance, without a set teacher.  Everyone becomes a source of learning: your boss, your coworkers, your subordinates, the supporting staff and consultants, your customers, your potential customers, prior customers that you lost, your competitors’ customers… you get where I’m going with this.  Your only chance at true autonomy is to listen. Listen daily and keep notes. Listen in the hope that you may hear, compile, and understand what it is that people will pay you to do.  

That is the message behind the “there are no answers inside your building” mentality of today’s most well known entrepreneurs.  Though you may have fallen into the habit of answering to a set person who has been assigned to you, recognize that this does not hold true in the real world and is a dangerous practice to keep.  It is unsafe to place trust in the knowledge of a small group of people in a conference room to figure out what problems need solving, how to solve the problems of the many, and how to extract value for you and your company.  The more sources of thoughtful feedback you can get and utilize, the better your chances for success.  

The internet gives us access.  It bypasses the limitations of those six degrees of Bacon we scrape through to get email introductions. It renders obsolete the arms-length approach of distributing postcard surveys at a mall with the sole feedback motivator being a sweepstakes for a free vacation to the Florida keys.  ideapho.re is our vision of a place you can go to learn from each other.  A community built specifically for customer development.  It allows companies to compile a useful database of raw feedback from people they can directly compensate for thoughtful, well-articulated ideas.  It makes learning from one another accessible on tap.  

ideapho.re is crowdsourced innovation.  What are you learning?

What We Are Doing and Why

About a year ago, the three of us formulated a hypothesis:

People often have valuable ideas, insights, inspiration, solutions, and feedback (let’s call these all “ideas” for brevity). More specifically, ideas to improve currently available products or services. Often, those ideas go nowhere because they are not, by themselves, inventions worth patenting or starting a new business around. They are usually only beneficial to the right people or companies that already make the related product or service. But these same people will not give their thoughtful, creative, valuable ideas away for free, especially explained in well-articulated prose or drawings. Without patent protection, it is currently too costly, complicated, and time consuming to get these ideas into the right people’s hands.

Our powers of legal analysis and drafting, programming, mathematics, and (of course) heart combined, we formed ideaphore LLC to solve that problem. At ideaphore, we are building an elegant, fun to use marketplace using the lean launchpad startup method. Our platform is powered by a simply worded, but robust, set of user agreements that we have written from the ground up.  These agreements combined with our web application will create a direct Open Innovation channel between those that can use idea generation to create a product or service and individuals that can provide those ideas. We are innovating innovation.

Our system allows individual experts or creative customers (sellers) to post an idea pitch directly to a company or to a category of industry professionals (buyers). The post is made up of two portions. The pitch portion is completely public and does not contain the actual idea. It is, in essence, an elevator pitch with a price and business card attached. In the idea portion, the seller fully explains, describes, and teaches the idea to the best of their ability, and this part is kept hidden. To see the idea portion, buyers that are interested must pay the price set by the seller (unless it is free). This is where the magic happens and our revolutionary contractual arrangements take over.

We are starting with the simplest possible arrangement, money for an idea and nothing else. The Seller gets their price — minus our transaction fee — and the Buyer instantly receives a shiny new, well thought out, articulated and/or drawn idea that they can evaluate and decide whether to implement at their leisure. Only the most basic intellectual property rights are exchanged so that each party leaves the transaction as though they created the idea independently of the other.  No further royalties or work are required from either side. Simplicity is the key. We will also create several other transactional arrangements for users to choose from based on feedback from buyers and sellers; we will grow with our members.    

We are in the process of testing and refining our hypothesis.  Very soon, we will be launching the first version of our web app.  Let us know if you want to play with it early, before the public release.

In the next few entries, we will explore the current ways companies use Open Innovation to get ideas from individual experts and creative customers and explain how ideaphore solves many of the known pains of these systems (which we will, from now on, refer to lovingly as “the Old Way”).