Giant technology corporations are often the victims of their own success. The sheer size of their operations is a testament to success, but the bureaucracy required to run these giants also stifles innovation needed to continue to launch new products. It's a troubling conundrum that has some of the behemoths of technology like Google and Facebook sweating. One approach is to invest in and buy startups. In fact, most big companies have a dedicated fund and team to scout strategic startups. Japanese consumer electronics giant Sony, started an internal crowdfunding project to encourage innovative from within.
Fostering innovation inside
Sony brought the world the Walkman in 1979 and nobody can take that breakthrough away from them, but 35 years later the company is facing the innovation challenge typical of such gigantic companies. In April, it launched First Flight, and internal crowdfunding platform to fast track selection and development of internal innovation among Sony employees. "The site is an extension of an existing initiative from Sony’s Seed Acceleration Program which aims to support and incubate new business ideas from inside the company." writes John Russel of TechCrunch. The project is spearheaded by the CEO Kazuo Hirai himself. Hirai helps entrepreneurial employees develop prototypes and gives them feedback on their ideas. This kind of leadership support is critical in signalling to employees that this is serious business and that their fresh, new ideas will be taken seriously and valued by top management. Too often companies simply tell their employees "think of something innovative" without giving the proper time and resources to allow them to think outside the box and test things out. The CEO's support and active involvement is a critical factor in the programs success.
Listen to the crowd
Once ideas have a solid prototype they are launched on the First Flight crowdfunding platform. This allows projects to be exposed directly to the market and get real world validation. This simple step breaks through the thick walls of corporate culture and hierarchy to let in cool gusts of fresh air. If in the past, Sony has been criticised for being 'out of touch' with the fast moving trends on the Tokyo streets, the crowdfunding site is a direct line to the consumer pulse. Quick, quantifiable results indicate the market potential of each new idea and also provides the seed funds needed to get it into production and shipped quickly. This is a long cry from traditional product development processes involving meeting after meeting, death by Power Point, and and endless chain of command.
Keeping the crowd in check
Sony has opened up to the crowd in a very intelligent way; utilising it for the fast, smart market validation it can provide yet still infusing the process with the experience and resources of top Sony executives. This is a strong advantage over entrepreneurs working out of garages and cafes to develop and test their ideas. Imagine having world class industry executives at your fingertips to consult with from the earliest stages of idea development and all the way through to production and marketing. That is a pretty powerful proposition.
Best of both worlds
Sony may have just innovated a new model for corporate innovation. Using crowdfunding as a way to directly tap in to trends on the street and validate new ideas, while backing it up with mentorship, development and marketing resources of a gigantic global corporation. This model seems to capitalise on the best of both worlds. With its first few products already shipping to paying customer (Japan only), Sony's First Flight is off to a promising start.
Should more corporations launch crowdfunding initiatives to spurn innovation?