Innovation Is as Much About Finding Partners as Building Products

This is an incredible moment for innovation. Previously unthinkable opportunities to reinvent complex, established industries are now being made possible by the convergence of cloud computing, new analytical tools, and the data flowing from a host of new sensors in the physical world. To revolutionize old industries, small and big companies alike must get past competitive angst and embrace their strengths and weaknesses. Such collaboration can take many shapes. These are new, unique partnership models in which corporations bring assets, the ability to rapidly test and scale, and a deep understanding of the regulatory landscape. Startups inject new technical expertise, and venture capitalists offer funding and access to new talent. To seize the opportunity before us, collaboration across the economy must become universal. Yesterday’s model of innovation is no longer adequate – instead, the entire ecosystem must work together. Smart companies, founders, and investors that recognize this have a far better shot at making history, rather than running the risk of becoming a footnote to it.

Have you ever stopped to ponder the true complexities involved with trying to create a viable, safe, autonomous vehicle? The innovation alone is a herculean task, but imagine being that upstart pioneer trying to develop the technology, while at the same time going up against entrenched, powerful competitors with deep industry knowledge, assets, and channels who’ve been around for a hundred years or more.

This is the challenge for all kinds of disruptors, whether in the auto industry, pharmaceuticals, service industries, or healthcare. The fact is, going it alone, we believe, is simply not the way to go at all. Collaboration is the essential new secret sauce for startups and industry leaders alike. For true disruption to take hold, old and new must work together, playing to each other’s strengths.

This is an incredible moment for innovation. Previously unthinkable opportunities to reinvent complex, established industries are now being made possible by the convergence of cloud computing, new analytical tools, and the data flowing from a host of new sensors in the physical world. Improbable advances are now real possibilities.

Yet the requirements for innovation today are entirely different from those of the last 30 years. The technology-driven disruption model that brought us computing, the internet, and mobile apps is no longer sufficient. Transforming our oldest industries calls for more than new technology; sophisticated knowledge of regulations, testing protocols, and traditional physical assets are now essential.

The inadequacies of the old approach are evident in recent startup stumbles, even when the technology is sound. DNA genetic testing company 23andMe fell behind on its communications with the FDA, resulting in a temporary ban on marketing the company’s personal genetic screening services to the public. It took more than two years for 23andMe to secure a green light from the FDA to screen for 10 diseases, the first such approval for a direct-to-consumer test.

A123 Systems promised to be a clean tech success with a soaring IPO in 2009. The company developed lithium ion batteries that helped convince automakers of their value for hybrid vehicles. But the startup could not keep pace with the development and scale of established battery makers, and production defects led to a $55 million recall in 2012 and contributed to the company’s bankruptcy later that year. Acquired out of bankruptcy by a Chinese company to focus on the burgeoning domestic market, A123 recently announced it will close its Michigan plant as it winds down production of lithium-ion batteries in the U.S. and shifts its local focus to engineering and testing.

Even an innovation pioneer like Tesla took a harder path — the company’s reinvention of the automobile meant a massive investment in non-core parts.