Truth 7: All New Ideas are Made up of Old Ideas

The author discusses here the realities of life that each and everything physical in this universe is made up of same unit know as atom. Similarly all new knowledge is based on the existing knowledge. The idea here is that nothing can be created from point zero. We all are the same and yet different. Same in terms of physical unit of atoms and different in the sense that how those atoms interact with each other.

Same is the case with the innovation. If anyone of us wants to innovate it is not a good idea to start from point zero and try to create the knowledge or products which already exist in the market. But we shall search through the existing knowledge and then try to develop our innovations on the basis of that knowledge. This will save the time for our innovations and if utilized better than the competitors it will also help in managing the market lead times and hence let us stay competitive.

Author provides a very common yet very interesting example of the wheal. the creation of the simple wheal lead to the creation of so many mechanical and electrical products in every field of life. You may take the example of as small a thing as an analogue clock or  as big as a ship or airplane. All used wheal to their benefit.

The idea is do not waste your precious time on creating a product/service/knowledge from scratch but look around you, look into your surroundings and environment to get the stimulus for your innovation and you will find a good combination of pre-existing things which will help you all the way for creating the same thing and yet different. 

Truth 6: Bet Small to Win Big

All of us must have heard that small is beautiful. In terms of business what does this means? It means that do not put all eggs in one basket and try to test as many ideas as possible. Some of them will fail but most of them will succeed. This will lead to more growth for the organization.

From the stock market point of view, it is called portfolio management. One has to manage the innovation portfolio in the organization so that it leads to the success of the company and the losses at one place can be substituted by the profits in other places. When you work on big ideas you use too much resources and when the idea is not working out you put more resources into it to make it possible. This leads to the extra utilization of resources and you are unable to withdraw.

It is wise to bet bigger only when you are certain about the future. you know the result before hand and hence you bet everything. Also you can bet big when you know there are no other choices left. I personally compare it to a game of poker as I am obsessed to it now a days and thanks to facebook for that :). When you get your cards and everybody bets, mostly the bet is small in initial phase till the time first three cards open. Then you become certain of the future. If you have got two pairs, straight or any higher hand in terms of poker, it is wise for you to bet everything and go "All in" in order to earn more. But if you have got one pair you wait for other cards to just show up and then you bet accordingly.

Same is the case for business. Do not go for blind bet until and unless it is really a matter of highest stakes for you. If you do so you are going to eliminate your options yourself and hence will bleed your business to death with your very own hands.  

As the text  describes that in business, working on different small ideas involve more people with less responsibilities as compared to the big ideas hence people are more focused and comfortable to work with them. The other advantage of small ideas is that they do not require a very huge investment and the fear of failure is not substantial in such cases. If losses occur they are manageable by the organization at a smaller scale.

Making as many small bets as possible increases the number of attempts possible and keeps options open.

We will be back with Truth 7 about innovation soon :)