Chicago-bred Christopher Witt spends plenty of time on faculty at the University of New South Wales, but he’s quick to point out that he’s no academic. Having spent his early career at big corporations such as AT&T, Telstra and Motorola, Witt is now doing his bit to help bridge the commercialisation gap as Director of the Centre for Innovation & Entrepreneurship at the Australian School of Business. He also puts his wisdom to good use at his investment practice, The Kalori Group.
Interviewed, condensed and edited by Paul Ryan.
Innovation is about good ideas… and so much more.
People think that innovation is all about a good idea. In my humble view, 90-95 percent of innovation comes in the implementation; in the team’s ability to knock down barriers to acceptance in the marketplace. If you look at the pantheon of innovation, it’s overwhelmingly not about the best ideas but the best ones that got out and survived.
Great success comes out of lots of small failures.
Great programs are usually preceded by a number of successful pilot programs. The same goes for entrepreneurs. We need to do a lot more of these small little experiments. And, yes, you want four out of five of them to fail because you want to stress them to the point that they fail. What is the maximum price that the customer will pay? You don’t know that unless you keep jacking it up and up and up. We need to embrace experimentation and welcome failures to isolate why things failed. It’s the only way to find out what works.
Value isn’t determined by how much you put in.
Value gets attributed by investors, competitors and acquirers. Early on, that value gets attributed based on market potential rather than intrinsic value. Over time, the balance shifts towards intrinsic value. Typically, early stage companies get over-valued, then they experience a slow decline in value until the time they begin to break-even from a cash-flow perspective. Unfortunately, the down rounds are usually inhabited by venture capitals. This is where we have a disconnect between the expectations of entrepreneurs and VCs. The VC is viewed as a rape and pillager.
It’s who you know.
The biggest single determinate of how effectively a promising business grows is the strength of the networks connected to the management, the board and the investors. It comes down to how well you are able to marshal those resources and punch above your weight.
Why do all the watchmaker companies cluster in Switzerland? Why do all the car companies cluster in Detroit? Why do all the software professionals cluster in Seattle or Silicon Valley? It comes down to how people recycle experience and expertise. Australia will always be at a bit of a disadvantage due to geography. But we do have deep, global skillsets in the areas of mining (and related services) and healthcare. We have the ability to farm and recycle that expertise on a global scale.
A question of character.
I’ve been known to back out of an investment deal if the head entrepreneur seems inclined to put self-interest ahead of the welfare of the group. That is a character flaw that I consider fatal. I could not get into a space capsule with a person for a five year voyage if I thought that they would put personal welfare ahead of the welfare of the mission.
Keep it simple… and act.
I’m a proponent of trying to keep things simple, succinct and specific. At the end of the day it’s actions that make it happen, not rhetoric or good intentions.