Thursday, 8 November 2012

Just Throw A Dart

I attended a seminar at the Rady School of Management, which incidentally is a rather fabulous new building on the UC San Diego campus.

The topic was "The Importance of the Raw Idea in Innovation: Testing the Sow's Ear Hypothesis." Karl Ulrich was the speaker. He is Vice Dean of Innovation and the CIBC Professor of Entrepreneurship and e-Commerce at the Wharton School of the University of Pennsylvania.

It was a lively and interactive discussion - between the old adage "you can't make a silk purse of a sow's ear" which has been used for years to discourage inventiveness and the Midas hypothesis, arguing that with the right resources and approach, an innovator can create value out of just about anything.

He started by taking a poll of the room.

We were shown a raw idea (rough drawing and brief description) of two products and were asked to determine which we thought did better in the marketplace (based on sales data). Lo and behold, the majority picked the wrong one.

Turns out that when 'experts' cull ideas, the very same thing happens.

When it comes to determining success from a raw idea, the data proves that 'throwing a dart' can be just as helpful. At least it did in this particular study of consumer housewares.


How is that possible?

Well, this is when charts and math came into play and let's just say I understood the basic principles but would have a hard time describing the algorithm to get you there.

The study did conclude that using a crowd of ordinary consumers to state purchase intent was a better gauge of market outcomes than a panel of experts when judging raw ideas.

My take-away from this seminar:

* Throwing a dart or listening to an expert are equally effective (at least in the aforementioned study)

* There is an interesting community-driven product development company called Quirky

I also picked up two new words to add to my vocabulary:  

Exogenous:  Refers to an action or object coming from outside a system.

Endogenous:  The opposite of exogenous. Something generated from within the system.

Excuse me, I am off to brainstorm and throw a few darts...

1 comment:

  1. I can't wait to see what you come up with. Can I have a cut of the profits if I encourage you and offer my own quirky opinion?