I n a well-marked line from the movie The Social Network, Facebook founder Mark Zuckerberg turns to the Winklevoss twins, who are suing him for stealing their invention, and says: If you guys were the inventors of Facebook, youd have invented Facebook. The words speak volumes about the origins of one of the most successful companies on the planet, but are also a commentary on the origins of any invention. Anytime you invent something, you have really invented two things—the thing itself, and an idea, says Harvard Business School visiting professor Gautam Ahuja, a professor of strategy at the Ross School of Business at the University of Michigan. In the case of Zuckerberg vs. the Winklevosses, the twins may have had created a simple interface for college kids to connect with one another, but it took Zuckerberg to take the idea and turn it into that of a worldwide social network that would allow everyone to share their lives with one another across geographies. Compared to the value of the global network idea, the value of the actual product of a platform for college kids was much less, says Ahuja. Often the concept value of the invention is more important than the physical aspect. In a paper published last year in the Academy of Management Review called The Second Face of Appropriability: Generative Appropriability and Its Determinants, Ahuja makes distinctions between two types of value: primary appropriability, or a companys ability to exploit the opportunity of an invention by turning it into a product, and generative appropriability, a firms ability to capture the later value inherent in the idea. Often companies dont fully exploit the latest ideas that their product has created, says Ahuja, who wrote the paper with Curba Lampert of Florida International University and Elena Novelli of City University London. They go on and create new products and inventions without realizing the potential for building new products out of their existing inventions. Take Xerox, for example. Its research center, Xerox PARC, famously had invented the graphical user interface, mouse, laser printing, and other technologies that would later become commonplace in modern computing, but did not commercialize the innovations. It was Steve Jobs and his Apple team that saw the possibilities during visits in 1979 and made them the cornerstone of the Macintosh. In other words, while Xerox may have invented many wonderful things, it did not necessarily profit from them in terms of either primary or generative appropriability. By contrast, years later, Apple broke new ground in the creation of the iPod, a simple portable device that allowed users to play music through a digital library. But it didnt stop there. Realizing the potential of the invention, Apple employed many of the ideas used in the iPod as a foundation for an entirely new product, the iPhone. And then it increased the size and added functions to create the iPad, a portable tablet computer. It was already halfway to becoming a computer, and they completed the job, says Ahuja. Apple is a company with good generative appropriability that is constantly building on its ideas to create new products. Read more: forbesindia/article/harvard/inventing-products-is-less-valuable-than-inventing-ideas/38995/1#ixzz3KQoFSBVb
Posted on: Sat, 29 Nov 2014 05:12:23 +0000
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