Towards a model of synergistic innovation : studies of technology startups

Abstract

Drawing on prior research that spanned decades, from innovation diffusion to disruptive innovation to synergy creation, this study puts forward a model of “synergistic innovation” that is timely and relevant in today’s entrepreneurial world. Defined as an innovation for value creation based on the tactful combination of technologies, synergistic innovation serves as an antidote to the winner-takes-all effect common in the startup scene. The significance of this study is vital, as the results help to shed light on how startup ventures and small businesses can level the playing field in terms of competing against technology behemoths. Conclusions from this study would enable us to appreciate the inner-workings of a new form of innovation that is pervasive and significant in our society, demystifying the journey of entrepreneurial pursuits and venture developments. This study aims to contribute to the ongoing quest for a better understanding of innovation, and produce meaningful implications and lessons that could be applied to other fields, in particular organizational learning. The researcher interviewed 24 protagonists across Greater China at two startups, namely MCD and YLC, to delve into the theoretical underpinnings and specific details surrounding synergistic innovation. Subsequent analysis revealed that synergistic innovation in the first case (derived from the combination of WeChat and HongDian at MCD) yielded 222% in performance synergy, along with sales growth of HKD35,000 (per online seminar) and cost savings of HKD87,000 to HKD329,000 (from in-house development cost reduction). The second case featured a similar technology-pair (in this case the amalgamation of WhatsApp and Wix at YLC) which generated 151% in performance synergy, with an implied revenue uptick of 100% (due to efficiencies in performance scheduling) and expense reductions of HKD128,000 (per show). A cross-case analysis was then conducted to shed light on some of the underlying reasons for the similarities and differences in the adoption processes of the two cases. The key enabling factors of synergistic innovation identified include Lifelong Learning, Competitive Collaboration, Radical Transparency and Failure Embracement, and the specific challenges and associated solutions were explicated in this study. A building-block approach was adopted for a more comprehensive and holistic analysis of the four enabling factors distilled, exploring the intertwining nature and fundamental dynamics of how these factors interact in the generation, diffusion and management of synergistic innovation. The symbiotic nature of synergistic innovation and organizational learning was also explored, revealing the underlying mechanisms of how the four enabling factors of synergistic innovation contribute to the four phases of organizational learning. It is hoped that this study would elucidate the intricacies of synergistic innovation, vivify the existing literature pertaining to innovation, and extend the related theories to yield a model of synergistic innovation with actionable insights and business implications for organization leaders and decision-makers.