I interviewed Matteo Casarico who discussed Product Innovation And How Start-up Companies Can Ignite Creativity.
Brief background of yourself
My primary field of study was in Engineering and my professional background comes from a lengthy experience working for a leading multinational FMCG company where I operated as Extended Supply Chain Senior Manager. Here I had a variety of roles ranging from ICT to E2E Supply Chain with a focus on procurement; a particular requirement was scouting the market to find products or technologies required by the marketing function where the expertise was not readily available inside the organization itself.
This is a relatively new form of innovation identification which is becoming more and more relevant in big companies to speed up product's time-to-market, in parallel to the traditional internal, R&D driven, product research and development.
Recently I decided to exit the multinational world and I am now focusing again on Innovation but from a radically different point of view I would call "Bottom-Up Innovation".
My experience is then focused on product innovation or product-related innovative technologies.
Today I focus on this side of innovation although service-related innovation may have many points in common.
Where bottom-up Innovation definition comes from?
I would not refer to this a formal ‘definition’, rather a good way to clarify the concept.
A big company has a large number of people who look after new ideas and new products. They rely upon massive data from the past or from other teams operating in the same, or connected, field anywhere in the world.They have access to a large amount of differentiated information regarding products already launched, or marketing data and trends elaborated by specialised companies such as Nielsen or new medical studies from Universities.
Ideas usually come from marketing functions, where they observe that an unmet consumer need has a good enough potential on either global, regional or local base.Once identified, this concept is then processed by R&D to get to a product, and then by Supply Chain to make it a physical object to be placed on a shelf.This is, in a simplified manner, what I call "Top-Down" Innovation.
Approaching the product related Start-Up companies, you look to the same world but from an opposite perspective.Ideas are generated by a small number of people who realise on his/her own that "something is missing" and start to think about how to fill this gap. If these people have the right mindset and characteristics the idea is developed up to the point in which it needs some capital to progress, and this is the very first moment in which that idea becomes somehow visible to the world.
There is a lot of literature about this process so I will not mention any of it, what matters is that today, somewhere, there is the solution to a problem that quite likely big companies did not yet think about or, most likely, their people did not consider having enough potential to be cared about.
I can tell you this a frequent ‘hidden ideas selection criteria’ in many big companies, much more selective than the "not-invented-here" syndrome, another innovation killer inside many companies.
The wonderful aspect of the bottom-up innovation is that typically the people believing in their ideas do not easily give up and strive to make it happen.
You may be surprised by the large number of products, marketed today by big multinationals, coming from small or mid-sized Start-ups. Many companies are regularly monitoring Start-up incubators or related events to intercept ideas fitting their vision or strategy and many start-ups are strategically looking to be acquired or integrated in big companies.
It is pretty rare the case of “real” Start-Up companies, typically small and not properly structured to compete on a global scale, distributing massive volumes of product. Most typically the idea or the whole company is acquired by another bigger company having the scale to fight this competition battle.
I should also to mention that Start-up mortality is tremendously high, statistics state about 80% of Start-ups does not live more than their 12/18 initial months.
Why do you think bottom-up innovation is important?
There are many different layers to consider.
Finding real needs
If you look at the number of solutions provided by Start-ups, now owned and distributed by mid or big sized companies, you realise that this idea generation mechanism is really affecting everyday’s life and usually in the high quality of life direction.
This source of ideas is totally independent from any intellectual constraint a big company may induce in its development teams, there is no hierarchy to convince, no sponsors to find. This much higher freedom is clearly opposed by the limitation of resources but it is very important to state that this process is not “against” anything; it is a pure flowering of solutions to real problems people has.
Opening new markets
I believe, based on my experience, that there can be no conflict between new ideas from Start-up and new ideas from big and structured companies (of course exception made by patents, IPR and similar risky elements). This bottom-up Innovation can only be an idea fertilizer proposing new products and ultimately new markets.
Making a difference
Single persons cannot really influence big companies processes neither from inside nor from outside. A person in a big company can contribute to make something happen, I mean something really new, only in very special and rare circumstances. Engaging a Start-up idea that intrigues your mind and your heart allows you to put your energy, and maybe some money, to nurture it to the point it becomes a real thing.
You can personally really make things happen at this scale and you may be a determinant element for this to happen. That is the key attraction for me to get involved here.
Having fun in what you do
Forget about getting consensus, resources, sponsors, influencing internal stakeholders. Life is not simple nor easy, you will still need budget, but you fight your own battle and you chose your battlefield. You do things you believe in and share this with few motivated people sharing your same objective. At the end of the day you have fun in what you do.
Increasing employment level
Robust official statistics indicate “new companies” are decisively increasing employment level, in opposition to big companies releasing people.
Letting alone the “crowdfunding” option that is growing in relevance, in Europe there are EU funding mechanisms dedicated to “Innovative Start-ups” and many local governments are providing the same. As an example in Italy there are specific laws and funds to support this sector, stimulating and easing the creation of new economical entities. I still need to understand what impact will have the recent “Brexit” decision, I can assume UK will become more marginal in this area as well in the near future while now it is a real giant in terms of newborn Start-up companies (the single biggest contributor in Europe).
What is your role in this?
You probably already guessed it from the previous part of this speech.
What I am starting to do, supported by a young and energetic Italian company already operating in this arena and linked with the biggest Italian incubator, is to get into the Start-up world and to support some of them in their initial stages of life, typically, the first 12/18 months where ideas needs funds by a “Business Angel” to reach a “market-ready” stage. I provide the required structure, both organizational and documental, for them to be ready to approach the people that can provide them the required capital to progress their activity. This in their very initial phases or in a more mature scale-up one.
I, or people like me, can also directly contribute with a financial support as in the very beginning the capital intensity is generally low, you do not need to be a millionaire to contribute to ideas you believe are valid.I also plan to join the “right” Start-up company to make myself an active element of change from the inside.I believe this is an area under continuous development with a long-term opportunity window, a true opportunity to influence our future and to be an active element of change.
Ultimately Start-up real product is one of the most wonderful thing mankind produces since ages: New Ideas.
Thank you for your time and for this opportunity.
About Matteo Casarico
Start-up Mentor & Business Angel at MOB (My Own Business)