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 he 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 is ideas and technology with others in the hopes that such openness would advance the science that he loved. No one, except for Philo, was surprised when the innovators with whom he had shared his invention capitalized upon it and created dozens of multi-billion-dollar, self-sustaining enterprises.
I define an entrepreneur as, “Anyone who identifies an opportunity and exploits it.” Nearly everyone meets the standard outlined in the first half of this definition. Nearly every clear-thinking human identifies opportunities, often dozens each day, without even realizing it. Whenever you think or say, “Why don’t they…”, “Why can’t someone…” or, “I wish someone would…”, you are identifying “ideas” that might be exploitable by an entrepreneur.
Ideas are important, and adVentures based on novel, compelling ideas clearly have a significant advantage over those based on mediocre, “me too” ideas. As noted in Spilling The Beans, an idea, in isolation, if often worthless. A good team that knows how to execute can salvage a win from a mediocre idea, whereas a mediocre team can make a small fortune out of a very large fortune.
However, a moderately intelligent person can think of more ideas in a few days than could be successfully carried out by thousands of people over their lifetimes. A great idea and five bucks might get you a small, non-fat, mocha, soy latte and nothing more. Long-term value lies in the refinement of an invention to the point that it addresses an opportunity broadly enough to support a self-sustaining business.
It is the second half of my definition of an entrepreneur that differentiates inventors and innovators from most other people. Nearly everyone can identify opportunities, but only a small percentage of people ever attempt to exploit them. Inventors and innovators are both entrepreneurs. I have been involved in a number of successful adVentures, none of which were based on one of my ideas. Like me, most entrepreneurs are innovators, not inventors.
Inventors are analogous to parents who enjoy “making babies” but abandon their children once they begin to cry. In contrast, innovators are akin to parents who spend decades raising their children and ultimately experience a lifetime of rewards as their years of nurturing result in mature, self-sustaining adults. Innovators seek the establishment of a value proposition that can be profitably delivered to customers. The ability to innovate on the path already taken by others is the key to successful innovation.
Inventors, scientists, explorers and academics seek to be first. Competitive, driven entrepreneurs have a natural inclination to want to be first. Few people remember the second man on the moon, the second person to fly an airplane or the second person to reach the North Pole.
However, sometimes in businesses, being first is disadvantageous. Inventors will often sacrifice financial success in exchange for being first. Innovators seek to be first when it represents a defensible, sustainable, competitive position. As discussed in Competing From The Fringe, a fast-follower drafting strategy requires patience and ego containment, two traits that are in short supply at some startups.
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.”
“Realizing the promise” is usually more financially rewarding than “seeking the promise.” We do not fly “Wright Brother’s Airlines,” or listen to the “Marconi Radio Network” because these men were inventors, not innovators capable of building profitable ventures based upon marketable products.
In the following chart, the names in bold type achieved a moderate level of fame and financial success. However, for many inventors who were not also innovators, including Philo Farnsworth, being first resulted in little fortune and no fame.
A Small Fortune
“There have been many fine scientists desperately trying to become poor businessmen.”
– General Georges Doriot, Pioneer Venture Capitalist
Inventors often make a small fortune out of a big one, as they focus on discovering breakthroughs without regard for their ultimate financial return. In addition, due to their personalities, they often do not have the proper skills or desires to turn novel ideas into self-sustaining enterprises. They often seek to design and build the best products, without regard to the myriad of customer-centric, non-product-oriented issues that contribute to a product’s ultimate success or failure. Clearly they best products often do not win. If you do not believe me, take a look at Microsoft’s product portfolio.
If you are an inventor, your choices include: (i) sell your inventions early, 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 distinct skills, aptitudes and proclivities. There are notable exceptions – people who are simultaneously successful inventors and innovators. Their rarity is the reason most school-age child can name Thomas Edison, Eli Whitney, the Wright Brothers and Alexander Graham Bell. The list of such gifted entrepreneurs is very short, which is why creating a balanced Core Team is vital, as further described in The Tribe.
Are You An Inventor Or An Innovator?
In addition to the characteristics noted in the preceding chart, Are You An Entrepreneur? further explores the traits, environmental factors and other issues common to inventive and innovative entrepreneurs.
What Did Philo Invent?
Philo hoped that by transmitting news and global events into peoples’ homes, the world would become one large community, thereby reducing man’s desire to wage war. Philo essentially foresaw CNN seventy years before it existed.
Philo, after a long bout with alcoholism, 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.”
An inventor to the end, Philo ultimately gained satisfaction by seeing his invention, the television, grow up and become a self-sufficient adult.
Copyright © 2008 by J. Meredith Publishing. All rights reserved.