HP Innovation Journal Issue 01: Winter 2015 | Page 9

EMPLOYEE PROFILE
DISRUPTIVE VS. INCREMENTAL INNOVATION
TABLE A
Moderate
Uncertainty
Existing
Customers/Markets New
High
Uncertainty
4
2
Disruptive Innovation
Incremental Innovation
1
3
Low
Uncertainty
Moderate
Uncertainty
opportunities. Thankfully, we have learned
from Dave and Bill’s original pay-as-you-go
philosophy.
Since early 2014, the HP CTO office has been
running a new business incubator designed
to test, create, and internally incubate
potential new businesses. Incubations use
the same lean startup methods employed
by VC-backed startups. They are only
proposed for funding after the people
behind them deliver compelling answers
to key strategic and fundamental business
questions (see Table B). Because new
business creation is by its nature highly
uncertain, it’s foolish to pretend that we can
predict the unpredictable, or plan for scale
before we even know we have a “winner.”
For this reason, Incubations are all about
risk mitigation of testing hypotheses in the
market against key success milestones.
INCREMENTAL INNOVATION:
a new technology / product
type OR a new market / set of
customers.
EXAMPLE: A faster, cheaper or
better version of a product.
DISRUPTIVE INNOVATION: a
new technology / product type
AND a new market / set of
customers.
EXAMPLES: From a typewriter
to a personal computer; from a
taxi or car service to Uber.
Success is iterative, not linear. Scale only
after you have proven your technology/
product offering, with a solid business
model, based upon viable go-to-market
approaches that support attractive
financials. Learn, iterate, adjust, and repeat;
the fastest players win.
Building and successfully growing truly new
businesses in disruptive new areas is really
hard to do. Yet, history shows us if we don’t
disrupt ourselves it’s inevitable that others
will do it for us and chances are we won’t like
the results.
Doug Warner is the Vice
President, Head of Strategy
and Incubation at HP.
He began his career at HP
as the Director of Strategic
Development, Digital Imaging.
STRATEGIC QUESTIONS FUNDAMENTAL BUSINESS QUESTIONS
TABLE B 1. PRODUCT: What is the proposed product,
service, or solution offering to potential
customers?
1. Does
opportunity
map to
HP Mega/
Disruptive
trends, key
focus areas
or existing
business?
2. Is the
opportunity
size potentially
material for
HP?
EXPANSION
FRAMEWORK
(Table A categories
2+, 3+, 4)
7. How long
and what
investment
and return
profile is
required to get
to scale?
6. Key
hypotheses
are largely
proven or
unproven in
the market?
For HP?
3. Does market
already exist;
is it material;
is it growing
rapidly?
4. Is there
a potential
Strategic End-
Game that’s
compelling to
HP?
5. Clear and
complete
Business
Model Canvas
hypotheses?
HP CONFIDENTIAL: FOR INTERNAL USE ONLY
2. CUSTOMERS: Who are the customers targeted?
3. VALUE: What’s the value proposition for
targeted customers and what key assumptions
or hypotheses need to be true for the value to
prove itself?
4. GTM: How are you going to get to market and
reach your targeted customers in a financially
viable way?
5. WHAT’S THE PAYOFF: If all the information
above is true, what’s the strategic and financial
value of this business to HP? Can we extract
attractive financials; and, if so, using what
business model?
MEET LEI LIU, NEW
RESEARCH SCIENTIST,
PRINT AND 3D LAB
As a young child in XianYang, China,
Lei Liu never dreamed that he would
someday work at the company he read
about in school or earn a Ph.D. degree
in Computer Science and Engineering,
from Michigan State. But in May 2013,
Lei joined HP Labs as an intern. After
receiving his degree, he returned to HP in
2014 as a research scientist. Since joining
HP Labs, Lei has filed 19 patents with
USPTO; another 6 are in the works.
I never dreamed I could work here. When
I was 12, at school in XianYang, China,
I read about the HP garage in Silicon
Valley, which inspired me. I usually wake
up at 4, arrive in the office at 5, spend
an hour at the gym, and start to work
around 6. Morning is my prime time:
cold and fresh air energize my brain.
My coolest research right now… is a
biometrics project using sensors and
data analytics to measure concentration
and comprehension. When people
are reading, they may need help
understanding the content. My
objective is to develop a personalized
learning system. Recently, our team
has integrated this technology into
an HP Sprout application to provide a
novel immersive personalized learning
experience.
I collect stories. My wife and I love to
travel, and I collect coins wherever
we go. The back of a coin tells a bit of
history about a place; the coin also
recalls the story of my time at that
place.
I really appreciate the opportunities
that HP has provided for me. Not only
the space to transform my knowledge
and passions into reality, but also the
stage where I can contribute to the
next chapter of Silicon Valley’s biggest
startup.
INNOVATION JOURNAL ISSUE 1
9