Product Lives, Inner and Outer Struggles for Existence

Most innovations are about better products / services, better work, better market implementation and better selling.

I concentrate on innovations that transform knowledge into margins, by emphasizing on quantitative theories, methods and implementations. And we assume selling gets better, if we understand the types of our innovation better.

Innovations support product / service life cycles, their building processes and implementation environments. This influences, often one to one, the structure of the innovation itself. Its objects, functions, configurations, operations, purpose, methodologies and technologies.

To maximize its success means making danger and opportunities a positive contribution - optimize market risk.

In a general scope you may need to deal with paradigms like Duality - split the known and unknown, find measurable Boundaries between the two, Optimization that is only possible at the known, Evolution views they help to optimize, Superposition that is about true randomness, Game Theory that is a great paradigm for systemic issues…and not to forget Money - it's a product itselfs, but you cannot optimize market risk without thinking of money.

LinearFlow, MultiFlow and AntiFlow build our workflow triangle.

LinearFlow is the classical structure of innovations. They feature a single object that is to be built to pursue a desire, an objective, a requirement…a change. Its confronting external forces, but their inner structure is quite clear. It's causal, real and linear. The innovation leads to an irreversible change of the object that is fit for a purpose, has its quality and is prepared to materialize as a price at a market.

Its underlying object may have started as an idea, a commodity or a rough material. LinearFlow describes a product life story.

Think of a financial instrument, say, an exotic option. A trader has an idea of an attractive investment profile and asks the quantitative analyst: "structure me this". The quant chooses the model for the underlying, calibrates the model towards prices of liquid options and use the parameters to value the new option. After a positive assessment the new option will be traded and the process-through valuation becomes important.
Pricing may become very complicated when strict regulatory forces come into play...

Or the housing for a simple gear. The production manager has the idea to build the housing by "folding" a metal sheet instead of milling it from a solid metal block. The mechanical engineer chooses the elasto-plastic model for the material, calibrates the model towards standardized material parameters and use the parameters to calculate the bending properties…

Great. But wait a little, both may find: the model is correct, the fit of the calibrated model to data was so well, but the results were so bad. Why? Because both didn't calibrate to data that are informative and actual enough. Both need acquire them during the trading / bending process - perform adaptive recalibration.

This is intrinsic to many LinearFlow, process oriented innovations. You create something new and therefore you do not have enough informative data in advance.

MultiFlow objects struggle with their inner affairs, their interplay and interaction with other process objects and environments. When they are transformed as they move through the system they look more for optimal processes then for external barriers, constraints or limitations. They organize their inside life.
Multiflow innovations often offer "open results"...configuration modeling, across scenario simulations…
The objects may change or remain the same at the end of the workflow. But they've have change their roles...

Thinks of a portfolio of financial instruments and their risk management or the gear production and its quality management…

AntiFlow fights the existence of the innovation itself. In AntiFlow innovations, there's no requirement for causality, nor a constant reality, no time constraints and the objects (agents) remain as they ever were.

Think of systemic risk analytics - exposing the risk of collapsing an entire financial system, market or even economy. Risk imposed by interlinkages, interdependencies…An innovative approach is Debtrank where those banks represent the greatest rusk that would cause the widest spread of economic distress (if they failed). It uses the paradigm of evolution and analogies between the "food web" (what eats what) and debt webs.

Next, I'll move to Matter Types, but I'm sure I'll return to structure aspects.