Market-Driving Ideas Are Risky

The Impossible Mountains

Image by Stuck in Customs via Flickr

Market-driving ideas involve high risk. For every successful radical innovation in value proposition and value network, probably hundreds fail. An entrepreneur chasing a market-driving dream has limited downside financial risk as he generally invests enormous effort but limited capital. However, if the idea succeeds, then he has unlimited upside potential to make a vast personal fortune.

Quote of the day:
You don’t stop laughing because you grow old. You grow old because you stop laughing. – Michael Pritchard

In most organizations, the originator of a successful market-driving idea may receive a nice bonus or promotion (limited upside potential), but a public failure may destroy his or her career (substantial downside potential).When the high failure rate of radical innovation is combined with the risk/reward ratio in most large organizations, pursuing market-driving ideas is irrational for employees.


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