Lowering the cost of innovation

Michael Schrage of the MIT Center for Digital Business sees inexpensive digital business experiments as a form of “innovation risk management.”

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Heard an interesting talk today by Michael Schrage, a research fellow at the MIT Center for Digital Business. Schrage argued that the ability to create and conduct low-cost digital business experiments is a form of “innovation risk management.”

In other words, companies can now, using digital media such as the Web, test new hypotheses about their businesses inexpensively online. It’s now cheaper, Schrage argued, to do inexpensive experiments to test a new idea or concept than to do an extensive analysis of the merits of an idea.

But creating good experiments can be hard for businesspeople and organizations, Schrage observed. “Crafting a ‘good’ hypothesis apparently is hard” for businesspeople, he said.

Schrage has authored or coauthored several articles for MIT Sloan Management Review:  “The Innovation Subsidy,” “The Myth of Commoditization” and, most recently,

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Comments (3)
Improvisations » Innovation news « MIT Sloan Management Review
[...] such as Michael Schrage’s (of the MIT Center for Digital Business) advocacy of inexpensive digital business experiments, and John  Mullins’ (of London Business School), observation that start-up [...]
I do agree that during the time of recession surely every organization must be looking forward for some kind of innovative ideas and technique that could help them to cope up with this uncertain situation but how to know the long term consequences of these in finance and other sector of the market?
Marc Andreessen made a similar comment about lowering the cost of innovation on his last visit to Charlie Rose.  He described how some entrepreneurs are buying adwords on Google to test market ideas.  --Fascinating.