Nine out of 10 Fortune 500 companies in 1955 disappeared from the list by 2016. The average tenure of a Fortune 500 company went from 33 years in 1965 to 18 years in 2012, and it is forecast to shrink to 14 years by 2026. The accelerating rate of technology development and disruptive innovation that displaces incumbents are driving this trend. 

Itron Idea Labs’ main goal is to create disruptive innovation. We start with a business idea, validate the business model, then grow the business and develop the product. After the project obtains revenues, we transition it to a business unit. 

Each project is run by an EIR (Entrepreneur-in-Residence) who is responsible for just that — to first prove the need/value of an idea and then grow the business. We use lean startup and customer development techniques that apply to new market opportunities. These are all state-of-the-art methods used by startup companies and top incubators. Many companies have attempted to crack the nut of organic growth and disruptive innovation, but few have succeeded.

Itron Idea Labs started as an experiment and we learned from our mistakes. Through trials, iterations, failures, learnings and pivots, we are now at the point where we know how to create disruptive innovation.

An example is Itron Grid Connectivity. It started with the idea that electric utilities may need to know physical and electrical connectivity of meters to transformers and meters to feeders. Through customer discovery, we learned that the real pain point was the electrical, not physical connectivity. The next step was to identify the target customers and the value of the solution. That led to creating a revenue model that reflected that value. Then we started looking at possible solutions to that problem. We developed several solutions and we tried them with several customers. Today, we have a product based on sophisticated machine learning that determines electrical connectivity with nearly 100 percent accuracy. That product will create great value to our customers.

There are exciting times ahead of us, where we’ll create new businesses, products and opportunities. That will allow us to evolve the company to new phases and to keep up with the exponential rate of technology.