| By Russell on Analysis During my break, I read an interesting article in Business Week about Innovation - it's the next big corporate challenge and the new gold mine for consultancies, it seems. One of the issues facing us all is that innovation is either very difficult or executed very badly (depending on which theory you believe) resulting in pretty dismal success rates. For instance, less that 1% of toys launched ever succeed. Actually, all the following sectors have less than 5% success rate; mobile telephony (of course), groceries, music, airlines, financial services, computer hardware and software. But then we come to VC Firms' success rates which have a staggering (in comparison) 31% success rate - actually 4 times better than the next successful sector of pharmaceuticals. This really surprised me actually, as we're so used to hearing how risky VC investments are and how likely many start-ups are to fail. But the VCs seem to be doing a pretty fine job overall. Of course, we must factor in to this how few companies actually succeed in getting funding in the first place. But that's not entirely fair, as music or toy companies must cull many of their first ideas - they don't just launch something willy nilly. So if you're an entrepreneur and you're lucky enough to have made the cut and got some VC funding together, you can take a lot of heart from this, as the odds have suddenly and dramatically shifted in your favour. On the other hand, don't get too complacent.... It could also open up a nice little side line for VCs themselves - teaching the rest of us how to innovate properly.
Note: The research is based on data from the Doblin Group, an innovation consultancy. It does carry the caveat that the ROI hurdles were set by the sectors themselves and so the definition of success is going to vary. | 
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