A Buyer's Guide to the Innovation Bazaar

Research-Technology Management, Sept-Oct, 2007

A Buyer's Guide to the Innovation Bazaar; Satish Nambisan and Mohanbir Sawhney; Harvard Business Review, June 2007, pp. 109-118.

Professors Nambisan (RPI) and Sawhney (Northwestern) examine the various ways in which companies can "shop" for innovation outside of their own organization. Cautioning that there is no single best method, they organize the possibilities for external sourcing along a continuum defined by four variables: the reach that companies have as they search for innovative ideas; the cost of acquiring and developing those ideas; the risk involved in turning them into commercial products; and the speed with which the ideas can be brought to market. In the "often overlooked" middle of this continuum lie nearly-market-ready ideas, developed by a new type of intermediary the authors dub "the innovation capitalist." Different from the invention capitalists at one extreme of their continuum and the venture capitalists at the other, the innovation capitalists operate in three stages: seek and evaluate, develop and refine, and market. After explaining these roles, the authors offer guidelines for choosing the innovation sourcing strategy most appropriate for one's own company.