A few days ago, I wrote that established companies, even innovative ones like Google, seem to be challenged when it comes to creating successful new innovations. The big guns prefer to buy them. Google buys YouTube, News Corp (Rupert Murdoch) buys MySpace, Yahoo! buys flickr. The list goes on...

Truly new ideas are hard to integrate into a company's culture because either they are:

• close to the company's core business and threaten that business in some way
• far from the company's core business and don't seem relevant enough

Do you really want to pay billions for the next Youtube? How many of us can afford that? can you afford to be blindsided by the Next Big Thing? Is there a better way, one that gives us a chance to be the next YouTube?

Marc Hedlund of O'Reilly.com recently wrote about the expensive prototypes that are being sold to Venture Capitalists ("'$5 million for a team of five engineers to create a prototype in less than two years' -- for a web site to share spreadsheets!?"). He wrote a about a company called Y Combinator, which has a low budget approach to early stage start-ups.

Here's how it works. Got a team with a good idea? Give the team 3 months and $6'000/month per team-member. Give them a mandate to produce a working prototype. If they can produces something exciting in that time, you have something with great potential in your hands. If not, you've lost less than $100K. You can incubate a lot of projects for the cost of one YouTube.

So how do we apply this concept to established companies? Call it institutionalized incubation. Encourage your staff to come up with business ideas. Have a competition every quarter. The top proposals get their 3 month prototype funded.

Take the winners and lock them in room (figuratively) so they can realize their vision without interference. Give them their salary and whatever they need in infrastructure. Give them an ownership interest in what they create so they become true Product Champions and keep their innovations in the family.

What do you do with the results? The ones that are exciting, you fund. Maybe you build them into your business. Maybe they are stand alone. Maybe you sell them for ridiculous amounts of money ;-)

Swisscom appears to get it: Swisscom Innovations funded CoComment.ch, an innovative tool for tracking blog conversations. Cool idea. I'm looking forward to taking a closer look.