Innovations are sources of eternal enthusiasm, sometimes tarnished by a little disappointment. If you have a lot of money and want to participate, then finance innovations!
If you have a lot of money as a banker, you want to get it secured overnight. Security means no volatility, no variance, a beta of zero. Of course you do not give your money to any other bank, but to the ECB. You pay for it, too. A beta of zero is so boring. Where is the fun?
If you have private equity or lead a company, you are probably more interested in profit growth, the positive alpha. What is easier than growing through innovation? Rely on innovations! Everybody is doing that, it is fun! For example, according to the GfK, trade presents more than 100 new barcodes (EAN, GTIN) daily.
Unfortunately, the flop rate of the EAN is high: 40% have disappeared after three months, 70% after two years. The main reason is the low level of innovation, leading to too small customer benefit and to the lack of a USP. That is why marketing managers always go quietly with bowed heads through the corridors and look for a new job every two years – or do I confuse somewhat?
Innovative projects draw the same picture. Commes and Lienert have investigated 100 innovation projects. 31% of them became a market success, 12% also an economic success. Bet on at least eight projects because then probably one is successful! If you bet on fewer projects, it will be more exciting.
If you have venture capital, you are certainly too bored with that. Look for product ideas! Vahs quotes a study from the US that of 3000 product ideas only one is economically successful. Or to quote Winston Churchill: You can always rely on the Americans to do the right thing after trying everything else.
Finally, a really big bet for venture capitalists: the nuclear fusion promises to solve all energy problems cleanly. When I studied aerospace engineering in the late 1970s, the scientists expected its market maturity in about 50 years. To this day, 40 years later, nothing has changed. In the meantime billions are invested in major government projects such as NIF and ITER. This is a super employment program for scientists who are investigating the still unknown plasma physics of very high pressures and temperatures. Despite the very high risk of unknown physics, three privately funded companies have started to develop nuclear fusion power plants: General Fusion, Sandia, and TriAlpha. Would you like to participate?
We advise you to achieve constant innovation success from your innovation financing.