Inventor Or Innovator – Which Are You?

This article originally appeared on Forbes HERE.

Philo Farnsworth created a technology which underlies one of the 20th Century’s most ubiquitous products, yet he died a man of modest means and is relatively unknown today.

Philo was an inventor, not an innovator. He was primarily motivated by the educational potential of his invention, not the wealth it might generate.

He freely shared his ideas and technology with others in the hopes that such openness would advance his scientific field of study. Philo’s fellow researchers were not the only people who benefitted from his discoveries. Numerous innovators capitalized upon them as well, creating dozens of multi-billion-dollar enterprises.

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Inventor And Innovator Characteristics

Some first-time entrepreneurs mistakenly believe that they are not entrepreneurs because they have never invented anything nor have they come up with a novel idea upon which a company could be built. None of the ventures I have been involved with were founded on my ideas, nor have I ever invented anything. However, I am no less of an entrepreneur.

Only a small percentage of innovators are also inventors. If necessity is the mother of invention, obsession is the father of innovation. As described more fully in Startups Are A Remix, Innovators iterate and combine preexisting ideas until they incrementally modify an invention such that it embodies a marketable value proposition upon which a sustainable company can be created.

 If you are solely an inventor, your startup options include: (i) sell the intellectual property underlying your inventions before they are commercialized, which will net you nominal value, (ii) partner with someone who has innovator skills, or (iii) risk losing it all by attempting to play the roles of both inventor and innovator. Few people are successful at both roles because each requires the distinct skills, aptitudes and proclivities noted above.

There are notable exceptions – people who are simultaneously successful inventors and innovators.  Their rarity is the reason school-age children can name many of them: Thomas Edison, the Wright Brothers, George Eastman, Samuel Colt and Alexander Graham Bell. As such, the option with the highest probability of success is to create a balanced team, comprised of both inventors and innovators.

A Small Fortune

“There have been many fine scientists desperately trying to become poor businessmen.”

– General Georges Doriot, Pioneer Venture Capitalist

Harold Evans, author of the seminal account of American entrepreneurship entitled, They Made America, notes that, “An innovator’s essential contribution may be to realize the promise of the known.” A logical extension of Mr. Evans’s supposition is that, “Inventors seek the promise of the unknown, while innovators realize the promise of the known.”As most scientists will attest, “realizing the promise” is usually more financially rewarding than “seeking the promise.”

Inventors often make a small fortune out of a big one, because they focus on discovering breakthroughs without regard for their ultimate financial return. In addition, due to their personalities, they frequently do not have the proper skills or desires to turn novel ideas into self-sustaining enterprises. This leads them to design and create the best technology, without regard for the myriad of customer-centric, non-product-oriented issues that contribute to a product’s ultimate success or failure.

The individuals highlighted below achieved a moderate level of fame and financial success. However, for many inventors who were not innovators, including Philo Farnsworth, their efforts resulted in little fame and often no personal fortune.

 

What Did Philo Invent?

Philo invented television with the hope that by visually transmitting news and global events into peoples’ homes, the world would become a harmonious community, thereby reducing man’s desire to wage war.

After a long bout with alcoholism, Philo was understandably bitter in his twilight years. However, after silently watching America’s astronauts land on the moon on his small black-and-white television, he turned to his wife and said, “This has made it all worthwhile.”

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TV photo by gbaku

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John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara's Faculty where he teaches several entrepreneurial courses.


Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.





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