Overcoming the Innovator’s Paradox
Although many people say they like radical ideas, the greater the risk and uncertainty, the more skittish potential supporters become. Fortunately, there are strategies for breaking through.
Image courtesy of Brian Stauffer/theispot.com
Having a great idea is essential to innovation, but that’s only half of what’s needed. Securing the resources to implement the idea is just as important — and potentially more difficult. The inventor Nikola Tesla, for example, came up with several transformative ideas — for electric induction motors, wireless telegraphy, radios, and remote control — but he died penniless because he couldn’t line up the resources to commercialize them. In contrast, Thomas Edison, arguably less brilliant, died wealthy and famous because he was good at both coming up with ideas and winning the necessary support to turn them into reality.
Every innovator faces what we call the innovator’s paradox.1 Quite simply, the more novel, radical, or risky the idea, the bigger the challenge in acquiring the necessary resources. Although many people say they like radical ideas, the greater the risk and uncertainty, the more skittish would-be supporters (investors, bosses, partners, and so on) become. Many great ideas die on the drawing room floor because entrepreneurs fail to persuade others of their potential. Before jumping in, potential backers want ideas to be proven or the uncertainty reduced in some meaningful way. The ability to overcome the innovator’s paradox is key to becoming a successful innovator, whether you work inside a company or are trying to launch a new venture.
How can you prove an idea can work if you lack the resources to start developing it? Even the leanest of lean startups needs a basic level of resources to test its ideas, and truly big ideas need more. In a world where more ideas than ever are competing for resources — whether that’s financial backing, good team members, permission to pursue an idea, or customers — innovators who learn how to win support are the ones who gain traction.
To understand how successful innovators and entrepreneurs go about winning critical support, we conducted more than 100 interviews. We spoke with well-known innovative leaders such as Jeff Bezos (Amazon), Elon Musk (Tesla and SpaceX), Marc Benioff (Salesforce.com), Shantanu Narayen (Adobe), Indra Nooyi (PepsiCo), Mark Parker (Nike), and Jeff Weiner (LinkedIn), as well as less-well-known innovators. The good news is that the capacity to win support for your ideas isn’t something you have to be born with.
References (18)
1. The term “innovator’s paradox” is inspired by Nobel Prize-winning economist Kenneth Arrow’s description of the information paradox, in which the seller of information can convince the buyer of its value only after it has been fully disclosed, at which point the information has already been transferred to the buyer, who hasn’t paid for it. In an analogous manner, we argue that innovators struggle to convince the buyer (investors, customers, supporters) to support a new idea before the uncertainty associated with the idea has been resolved, at which point it is no longer a risk and thus support would be easy to come by.
2. For additional information on innovation capital, see J. Dyer, N. Furr, and C. Lefrandt, “Innovation Capital: How to Compete — and Win — Like the World’s Most Innovative Leaders” (Boston: Harvard Business Review Press, 2019).
