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Can the Idea behind a Product be More Valuable than the Product?

Can the Idea behind a Product be More Valuable than the Product?

In this era of intense competition, innovation plays a key role in any organization’s growth and success. When a company innovates, it actually invents two things: the product itself and the set of ideas behind it.

New products consist of new ideas, and product value actually resides in these ideas. Unfortunately, most companies fail to exploit their own innovations. Let’s look at several points on the importance of ideas.

The value of a product concept may be bigger than the product itself.

There is something interesting about the Facebook controversy between the Winklevoss twins and Mark Zuckerberg that most people may have missed. The twins may have created the interface for students to interact with one another, but it was Zuckerberg who turned that idea into a global social network. In this case, the value of the interface created by the Winklevoss twins was less than that of the idea behind it. Mark Zuckerberg took the same idea and created history.

Companies fail to utilize the full potential of their own innovations.

This may sound odd, but with an incomplete understanding of their own products, companies are unknowingly closing their doors to potential revenue sources. To get over this, there is a platform like INPEX, (Invention and New Product Exposition: is America’s largest invention trade show, where inventors and investors meet and explorer better opportunities to work together towards a better product.

In 2013, the Academy of Management Review Business Journal pointed out the difference between “generative appropriability” and “primary appropriability”. Generative appropriability is the effectiveness in exploiting inventions as concepts and capturing a share of the future inventions these concepts produce. Primary appropriability is the effectiveness in exploiting inventions as problem-solving mechanisms and capturing a share of their profits.

The paper suggested that several companies fail to exploit the ideas behind their own products. These companies fail to understand and maximize the potential of their existing inventions and instead focus on developing new products.

Another great example is Xerox PARC, the research firm that invented laser printing technology, the mouse, and the graphical user interface but failed to exploit such inventions commercially. Later on, Apple exploited and used the product ideas when they developed Macintosh.

According to industry experts, Xerox invented a multitude of products but failed to gain primary and generative appropriability from its inventions. On the contrary, Apple created the iPod, but it did not stop exploiting its inventions and product ideas even after achieving success. For instance, Apple used some of the ideas and specifications behind the iPod to create the iPhone.

Then, Apple further used the iPhone’s functions to create the iPad. Now, the Apple Watch is a culmination of the iPod, iPhone, and iPad. If you’re not sure regarding your ideas or how to shape it a better product, you can get help from InventHelp, they can help you to bring your invention to the real world and market it as well. You can read more about them here:

Hence, Apple has good generative appropriability and constantly optimizes its ideas to create new products.

Building the right atmosphere for research and development

Companies with challenged R&D budgets are forced to find more value from their previous innovations. Such firms are in a better position to come up with new products using existing ideas. Not surprisingly, companies with an excessive R&D budget do not usually recycle their ideas. On the other hand, organizations whose R&D budgets are too small struggle to create new products. Therefore, the budget for R&D should not be too little, nor too huge. An optimized R&D budget will motivate the company’s researchers to look into new directions, as well as develop their own inventions.

The interchange and interactions between new and old engineers in an organization are very important, as these can help create new products out of old ideas.

It is therefore imperative for companies to consider processes and establish a culture that allows their employees to build, share, and network ideas. As Apple has masterfully demonstrated, if the value of ideas is maximized to their fullest potential, companies can maintain a steady flow of innovation, regardless of who is at the helm.

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Deepak Gupta

Deepak Gupta is the editor of He is passionate about writing guides about Android devices.

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