The Unnatural Economy - Part 5: The Corporate Jungle: The High Cost of the "Not Invented Here" Syndrome

Key Takeaways

1. NIH syndrome: “Not Invented Here” resistance kills promising biomimetic innovations.
2. Financial barriers: Venture capital demands unrealistic returns, while industrial timelines require patient capital.
3. Institutional inertia: Government and military procurement can take 10+ years.
4. Entrepreneurial adaptation: Success requires navigating corporate psychology and finding niche markets.

The Dolphin Boat Breakthrough

The path into the traditional boating world, an ultraconservative industry, began with a moment of validation: the radically curved, dolphin-modeled WildThing watercraft was so compelling that it forced the judges at an international boat show to award it a shared first prize over the massive, costly displays of industry giants like Yamaha. The boat’s organic shape, designed for minimal drag and maximal lift, was a direct application of biological streamlining.

Yet, this initial excitement belied a more complex reality. While a superior product can secure awards, gaining traction in the multi-layered industrial ecosystem demands navigating the “corporate jungle”, a landscape rife with internal resistance and deeply entrenched inertia. The journey revealed that often, the greatest obstacle to a planet-saving innovation is not the technology itself, but the human psychology of the boardroom.

The NIH Syndrome Barrier

Commercializing disruptive biomimetic technologies faces unique, institutional resistance that often delays solutions to global crises. This inertia is primarily driven by the “Not Invented Here” (NIH) syndrome, financial models demanding unrealistic short-term returns, and the difficulty of overcoming “infectious repetitis”—the corporate tendency to repeat what is familiar and low-risk. The stakes are critical: these behavioral and structural barriers prevent the rapid deployment of energy-efficient designs, locking our economies into out-of-date, wasteful practices.

Financial and Institutional Hurdles

The Institutional Resistance to Optimal Design

The challenge of transforming an industry with a superior, bio-inspired solution is often a cross-disciplinary problem. Biomimicry often requires a “total rethink” of how a problem is solved, which threatens engineers whose careers are built on old, linear paradigms. This resistance manifests most acutely as NIH.

Consider the case of Carrier, the world leader in air-conditioning. When the author presented the PAX fan prototype, which later proved to be 23% more efficient and 40% quieter than Carrier’s existing fans, a senior executive dismissed it as a “seashell on a stick” and declared, “Science shits on nature”. This closed-mindedness immediately killed the collaboration. Similarly, when PaxFan licensed its technology to Delphi, a major auto parts supplier, internal obstruction arose. Engineers provided unrealistic specifications or tested the biomimetic prototypes under deliberately incorrect conditions—a subtle form of undermining that cost time and money.

The resistance extends to government and military sectors, which move with glacial speed. The author learned that even if PAX provided a superior, highly efficient propeller for the U.S. Navy, the military procurement timeline would ensure it would take at least ten years to reach a ship. Furthermore, if the technology was deemed “strategically valuable,” it could be classified, rendering it commercially useless for years—a critical factor for entrepreneurs seeking a timely return on investment.

The Perverse Economics of the Status Quo

Market inertia is not merely psychological; it is deeply financial, driven by the value chain and the prevailing “first-cost” thinking.

1. Dilution by the Value Chain: The industrial food chain, which involves markups at every step (from plastic supplier to component assembler to manufacturer) resists change because new biomimetic solutions often leapfrog several steps at once. For instance, one PAX product could be easily installed, eliminating the need for costly engineering consultants. However, these consultants are the client’s trusted advisors, creating a perverse incentive for them to refer their clients to less efficient, but more complicated and profitable, traditional technologies.

2. The Illusion of Choice: Selling a disruptive product can dismantle profitable, established business models. When PaxFan introduced a fan cheaper to produce and more efficient than a market leader’s entire range, the corporation refused to adopt it. Why? Because the company had a large, historic investment in offering a range of products at different, tiered price points to give customers the perception of choice. Selling one fan that met all specifications wasn’t appealing to the financial team.

3. Infectious Repetitis and Risk Aversion: Large companies prioritize avoiding risk. As PAX learned with Statoil, oil companies are willing to risk billions prospecting for new deposits, but are extremely risk averse regarding new equipment in their core processes, where downtime means huge financial loss. This “infectious repetitis” ensures that innovation is not worth the price or risk of changing expensive capital equipment.

The Quest for Patient Capital

Biomimetic growth differs fundamentally from the rapid scale of the high-tech world. It is more like tending an orchard than planting a quick crop. Yet, funding models often fail to account for this long timeline.

The aggression of venture capital (VC) poses a particular challenge. VCs are mandated to seek huge returns (hundreds of times their investment) within short time frames. This pressure can lead to disastrous outcomes, as demonstrated by the author’s own experience with PAX Streamline, where $25 million was spent over four years, conventional engineering was pushed, and ultimately, the company was closed at a complete loss because the aggressive VC timelines did not suit the industrial development cycle.

Entrepreneurs need to prioritize finding patient capital—angel investors who believe in the mission—or seeking government grants, which provide non-dilutive funds and external credibility, even if the bureaucratic delays are often maddening.

Navigating the Corporate Ecosystem

The path to commercializing nature’s elegance is rarely a straight line, but rather a “trek through a corporate jungle”, filled with obstacles that are inherently human. Successfully bringing biomimicry to market requires the entrepreneur to become highly adaptable—a survival mechanism perfected in nature itself. This means defining a mission with integrity, being meticulously professional to cross the disciplinary divide, and seeking niche markets where success can be proven without massive up-front capital or the burden of institutional inertia.

The ultimate consequence of this institutional foot-dragging is unnecessary suffering and resource waste. However, the economic reality is shifting: as climate change and resource scarcity intensify, the inherent long-term profitability and liability mitigation offered by zero-waste, efficient biomimicry will increasingly overcome the short-term resistance. Companies must define their priorities using the Impact, Control, and Return on Investment (ROI) triangle, understanding that maximizing all three is often impossible, but pursuing mission (Impact) alongside financial discipline (ROI) is the sustainable way forward. The survival of our planet depends on the entrepreneur’s perseverance against the high cost of the “not invented here” syndrome.