Innovation Inhibitors Include Dependency on New Infrastructure and Investor Risk Tolerance

Innovation Inhibitors Include Dependency on New Infrastructure and Investor Risk Tolerance

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I am a practical guy, so I recognize that expecting the real world to be fair is a dream that every entrepreneur must put aside at the age of majority. As a sales consultant, I see the passion of entrepreneurs often focused on an innovation that will certainly change the world while ignoring the potential impact of one of the many commercial inhibitors that kill too many startups.

Related: Continue to innovate your products or die slowly

For example, I am intrigued by the innovation and technology associated with flying drones of all configurations. I particularly like the latest personal flying car, presented at the most recent Consumer Electronic Show (CES) in Las Vegas. Still, I anticipate a long, difficult road for startups in this space due to the practical reality of innovation inhibitors, including many of the following:

1. Dependence on new infrastructure and support

It’s easy to see the value of electric power compared to fossil fuel engines, but we’re far from the network of gas stations and drone mechanics that exist today for conventional transportation. The necessary infrastructure is an inhibitor of many start-up innovations and can take generations to repair.

2. Request for safety and usage rules

New technological solutions often raise the specter of new government regulations. Even the most obvious rules can take years to be debated and adopted nationally or internationally. Witness the struggle of the Segway human transporter, introduced in 2001. Technology can change faster than laws.

3. People are slow to change and adopt technology.

For most people, “easier to use” innovation means change and new learning efforts that can easily offset the value of the change. Investors have a general rule that simple cost reductions of less than twenty percent are not enough to convince most users to switch to a new solution.

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4. Risk tolerance limits for investors

Each investor has a risk bias compared to specific types of innovation based on investment experience. They like the risk, up to a point, after which your startup will always be informed that more traction is needed. Trusted advisers can explain the real problem to you and recommend alternative investors or risk reduction techniques.

5. Closed community of owners or experts

Certain commercial fields and technologies are so dominated by a small group of “owners” that outside innovations are discouraged or actively attacked by incumbents. Trying to innovate in these areas without first entering the fortress is extremely risky. Do your homework first to improve the odds.

6. Low resilience and persistence of the startup founder

The best innovators never give up and are not discouraged by setbacks. Thomas Edison failed more than 10,000 times before finding the right bulb design. Challenged by contemporaries, Edison replied: “I have not failed. I have just found 10,000 ways that will not work.”

7. Qualified and motivated team members are difficult to find.

It takes more than a single entrepreneur with an innovative idea to start a business. Each startup needs a team with the right skills and experience to complement those of the founder. Getting the right people together is difficult because of low short-term returns, high risks, and a lack of training options.

8. Limited availability of financial resources

I put this constraint at the end, but it is important. There is never enough funding to meet the development and deployment costs required for major innovations. Every entrepreneur knows that he or she could do more – and take more risk – with more help. The best can do more with less.

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I’m not suggesting that you let one of these inhibitors prevent you, as an entrepreneur, from tackling the innovation of your dreams, but just realize that the advance warning is armed. Understanding constraints from the start gives you a huge advantage in overcoming them, and can save you from severe pain and frustration. The entrepreneurial lifestyle has always been a fun and satisfying experience. Let’s continue like this.

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