Category: innovation | 革新 | 독창성 | 改変

Innovation, alongside disruption are two of the most overused words in business at the moment. Like obscenity, many people have their own idea of what innovation is.

Judy Estrin wrote one of the best books about the subject and describes it in terms of hard and soft innovation.

  • Hard innovation is companies like Intel or Qualcomm at the cutting edge of computer science, materials science and physics
  • Soft innovation would be companies like Facebook or Yahoo!. Companies that might create new software but didn’t really add to the corpus of innovation

Silicon Valley has moved from hard to soft innovation as it moved away from actually making things. Santa Clara country no longer deserves its Silicon Valley appellation any more than it deserved the previous ‘garden of delights’ as the apricot orchards turned into factories, office campus buildings and suburbs. It’s probably no coincidence that that expertise has moved east to Taiwan due to globalisation.

It can also be more process orientated shaking up an industry. Years ago I worked at an agency at the time of writing is now called WE Worldwide. At the time the client base was predominantly in business technology, consumer technology and pharmaceutical clients.

The company was looking to build a dedicated presence in consumer marketing. One of the business executives brings along a new business opportunity. The company made fancy crisps (chips in the American parlance). They did so using a virtual model. Having private label manufacturers make to the snacks to their recipe and specification. This went down badly with one of the agency’s founders saying ‘I don’t see what’s innovative about that’. She’d worked exclusively in the IT space and thought any software widget was an innovation. She couldn’t appreciate how this start-ups approach challenged the likes of P&G or Kraft Foods.

  • Peugeot 505 + more stuff

    Peugeot 505

    Before there were minivans, MPVs (multi-purpose vehicles) and people carriers there was the the Peugeot 505 estate. It had three rows of seats. As a child, I remember that the diesel version was used for private hire cars transporting families to the airport and similar uses. At the time, private hire companies used to have names like ‘Airport Express’ and other terms. This was decades before Addison Lee or Uber. The Peugeot 505 could still be seen in Africa and the middle east well into the 2010s, which gives you an idea of how robust the Peugeot 505 and the relative simplicity of repair. It was Peugeot’s last rear wheel drive vehicle. The Peugeot 505 could be found in turbo and GTi versions and was converted by Dangel to become a port-SUV. Four wheel drive, but a monocoque chassis rather than the frame-and-ladder structure still used by serious four wheel drive vehicles like the old model Land Rover Defender, and current Toyota Land Cruiser, Lexus LX and Toyota Hilux pick-ups.

    Consumer behaviour

    The Secret to Being Lucky | WIREDwe’re only as lucky as we think we are. We only find luck when we look for it. Better still—for those who like action items—luck begets luck. You look for sunny weather, you’re more likely to find it; you find it, you come to think you’re lucky; you try your luck looking for more sunny weather and you luck out again. In Aeon magazine, Hales wrote, “Luck might not be a genuine quality of the world at all.” Fine. But neither is beauty or justice. At the same time, the Bloomsburg researchers discovered “a significant positive correlation” between people’s temperaments and how lucky they thought others were. “One of the things this means is that the more optimistic you are, the more you think others are lucky.” For “optimistic,” I might substitute “happy-go-lucky.”

    The airline lounge has arrived at destination undignified | Comment | The Sunday TimesIt’s summer 2022, a weekday morning and at Heathrow terminal 2 the “fast track” is closed to premium travellers (lack of staff) and, over at terminal 5, passengers are confusing the BA lounge with a branch of M&S, an adult daycare centre and their living rooms. Buffets are raided and carry-ons filled with cans and bottles, grown men and women are wandering around in what they think is chic athleisure but is really just synthetic jammies, trainers are propped up on tables and every other passenger seems to be suffering from an overheating crotch as legs are splayed wide open. – nice summation of British consumer behaviour

    Design

    Most expensive cars sold at auction | CAR Magazine – the Mercedes 300 SLR Uhlenhaut coupe is beautiful, but more as a piece of art than something you would want to drive

    Economics

    Mexico: A development puzzle – by Noah Smith – Noahpinion

    Finance

    Sinema is significant beneficiary of private equity lobbying machine | Financial Times 

    Innovation

    A.I. Is Not Sentient. Why Do People Say It Is? – The New York Times 

    Audi’s digital matrix headlights: do they work? | CAR Magazine – I would not of thought that DLP chips would find their way into car headlights to provide a MEMS powered version of the old swivelling headlights that I remember of Peugeots of the 1990s

    Sony will work with Honda to build EVs | CAR Magazine – If I had the money and was in the market I would be happy buying a Sony branded car – a ‘Sony Driveman’ if you will. It makes sense that Honda would partner for electric vehicles. I think that this and Toyota and Hyundai‘s separate hydrogen programmes are a couple of the most exciting developments at the moment

    Ireland

    Russia Has Stolen Over 400 Commercial Jets and No One Seems to Care | SOFREP – many of these were from Irish aviation leasing companies

    Legal

    Amazon acquires Roomba maker iRobot for $1.7bn | Financial TimesAmazon is in a tussle with the European Commission over the placement of its own-brand products on its platform. Antitrust regulators suggested Amazon was using its size, power and data to prioritise its own items over competing merchants on its ecommerce platform. The commission is seeking views by September 9 on concessions offered by the tech company that aim to address the issues raised – what will the iRobot purchase tell Amazon about the inside of our homes?

    Media

    MoFi Records has been using digital all along, a scandal in the audio community – The Washington Post 

    Parrot Perspective: Hollywood Tries to Get Gaming Right | Parrot Analytics 

    Meta reports drop in revenue for the first time ever | Medium 

    Online

    Why Is the Web So Monotonous? Google. :: Reasonably PolymorphicThe primary purpose of the web today is “engagement,” which is Silicon Valley jargon for “how many ads can we push through someone’s optical nerve?” Under the purview of engagement, it makes sense to publish webpages on every topic imaginable, regardless of whether or not you know what you’re talking about. In fact, engagement goes up if you don’t know what you’re talking about; your poor reader might mistakenly believe that they’ll find the answer they’re looking for elsewhere on your site. That’s twice the advertising revenue, baby!  But the spirit of the early web isn’t gone: the bookmarks I’ve kept these long decades mostly still work, and many of them still receive new content. There’s still weird, amateur, passion-project stuff out there. It’s just hard to find. Which brings us to our main topic: search. This fits in really interesting with The Founder of GeoCities on What Killed the ‘Old’ Internet | Gizmodo 

    Security

    On cruise missiles and precision weapons. There is an interesting paradox between usage and the very slow replacement rates for missiles which affects Russia and western powers.

    Software

    Tracking the Faceless Killers who Mutilated and Executed a Ukrainian POW – bellingcatUsing the face of the main person of interest, the website search4faces returned a profile on Odnoklassniki, a Russian social network, which contained this individual’s name. This, in turn, allowed researchers to discover a Facebook profile linked to this individual which contained more photographs – these were useful, given that most images of this individual on his other social media profiles were at least six years old. A search on PimEyes using a photograph from this Facebook account returned frames from the aforementioned RIA and RT videos in which the person of interest was visible. As seen in the perils of widely-spread misidentification on Twitter, Russian-created facial recognition algorithms perform poorly with non-Caucasian faces. While the algorithms used by these tools are not openly accessible and verifiable, it is plausible that this poor performance is due to the ethnic and racial bias within the user bases of large Russian social networks such as VKontakte and Odnoklassniki. A 2020 Harvard study revealed facial recognition algorithms’ biased results when working with non-white faces, though most of these studies have focused on American examples and Black faces. – interesting points on facial recognition software used by western and Russian internet services. I imagine that would be different biases in Chinese machine learning algorithms

    Taiwan

    President Tsai responds to the live-fire military exercises China has initiated around Taiwan – YouTube – great example of a steady hand at the tiller

    Web of no web

    Young Gamers and the Metaverse: How the Rules of Success Are Changing | Bain & Company 

    Kim Jones designs skins and vintage car for Dior’s gaming debut | Vogue Business 

    What Gen Alpha’s Habits Tell Us About The Future Of Gaming – GWI 

    Metaverse Majors Struggle as User Base Falls Short of Market Expectations 

  • Gentler place to work + more stuff

    Gentler place to work

    Saying out loud the quiet bit about work-life balance; tectonic plates of streaming move againI’ve found myself thinking about one panel in particular – the participants in the session on advice for aspiring leaders went beyond the usual platitudes, and shared a couple of uncomfortable truths about an industry which is trying to rebrand itself as a gentler place to work. – I think that we’ll see more of this move away from a gentler place to work as companies look to cut staff. I entered the workforce in the middle of recession before I went to college, this was the time of micro serfs and mcjobs. The idea of a gentler place to work seemed to be a transient one to me – one that would come and go with economic growth. Zero hour contracts really grew during and after the 2008 financial crisis, which is as far away from a gentler place to work as you can get.

    China

    Take down Pelosi’s plane’: Chinese react online to Taiwan visit | Financial Times 

    Displaced Syrians voice anger as bombed-out town doubles as film set | Financial Times – film being produced by Jackie Chan as demand in China for conflict porn grows alongside nationalistic fervour

    Consumer behaviour

    Children between the ages of 10-12 are spending the most on video games, survey reveals / Digital Information World 

    ‘I am borrowing to live’: pawnbrokers enjoy golden era as UK hits hard times | UK cost of living crisis | The Guardian 

    Economics

    How rising tensions across the Taiwan Strait could threaten global trade | Financial Times 

    Ideas

    Primary care physicians need 26.7 hours in the day – Futurity 

    Why Is the Web So Monotonous? Google. :: Reasonably PolymorphicThe primary purpose of the web today is “engagement,” which is Silicon Valley jargon for “how many ads can we push through someone’s optical nerve?” Under the purview of engagement, it makes sense to publish webpages on every topic imaginable, regardless of whether or not you know what you’re talking about. In fact, engagement goes up if you don’t know what you’re talking about; your poor reader might mistakenly believe that they’ll find the answer they’re looking for elsewhere on your site. That’s twice the advertising revenue, baby! But the spirit of the early web isn’t gone: the bookmarks I’ve kept these long decades mostly still work, and many of them still receive new content. There’s still weird, amateur, passion-project stuff out there. It’s just hard to find. Which brings us to our main topic: search. – It is more than search, there is also motivation and consumer behaviour change in the old web versus the new one – The Founder of GeoCities on What Killed the ‘Old’ Internet | Gizmodo 

    Innovation

    How the American semiconductor industry claimed back technological and market leadership from the Japanese

    Microrobots in swarms for medical embolization — Nano Magazine

    Turning fish waste into quality carbon-based nanomaterial — Nano Magazine

    Ireland

    Lidl Ireland removes mandatory retirement age of 65 | RTE 

    Legal

    EU starts competition investigation into Google Play store terms – report – Telecompaper 

    Luxury

    Telfar gets Beyoncé boost, but so does Hermès despite Birkin snub | Vogue Business – rappers don’t drive luxury sales, middle class Asians do

    Media

    Visa and Mastercard cut ties with ad arm of Pornhub owner MindGeek | Financial Times 

    Retailing

    Ocado, the online supermarket – is this a legitimate content partnership with Disney? Something feels a bit off about the Ocado | Disney inspired meals. The ‘inspired by Disney’ tagline and the Lion King themed ‘green grub pasta’ feels weird.

    Ocado, the online supermarket

    Security

    Missfresh hit by lawsuits from investors and employees | Financial Times 

    Starlink’s Space Speed-Up: A Battle for Internet Leadership – EETimes 

    Government concerns over China-owned CCTV company embedded in UK – Channel 4 NewsThere are more than a million of Hikvision’s cameras installed across the UK – monitoring every aspect of our lives. But Channel 4 News has learned that there are growing concerns within the government about the Chinese state-owned tech company.

    Next Generation Post-Quantum Encryption May Not Be As Secure As Many Tech Experts Had Hoped / Digital Information World 

    China’s war games spur Taiwanese business to rally to island’s defence | Financial Times 

    Web of no web

    Air Force Pilots to Fight AI-Based Enemies Using AR Helmets 

    Apple’s Next-Gen CarPlay Is Scaring the Car Industry. Here’s Why. – Robb Report UK 

    Some interesting business takes on the commercial decline of ‘metaverse‘ platforms:

  • Objectified garlic + more things

    Objectified garlic puts up a stink in Korea

    I didn’t expect to be writing the words objectified garlic in such close proximity, ever. The reason for this post is down to an advert put together by an area of South Korea to promote its high quality garlic to Korean city dwellers. The advert was full of double entendres and was accused by critics of having objectified garlic.

    The house I grew up in

    Hiscox home insurance did this TV advert that makes really good use of projection mapping to tell a story. I can’t believe that this is now eight years old as an execution.

    Fuzzy logic versus cloud based AI

    I have written a good deal before on the benefits of fuzzy logic which is a much more efficient technology than machine learning for a lot of challenges, particularly if the machine learning is based on cloud computing a la the internet of things (IoT).

    E-mu Systems SP1200

    Back in the 1980s E-mu Systems were known as one of the pioneers of sampling with their Emulator series of keyboards, alongside the likes of CMI with the Fairlight and New England Digital’s Synclavier. They were bought out in 1993 by Creative Techology like rival Ensoniq – eventually they were both merged together. The SP1200 was a sample based drum machine and sequencer that came out in 1987. It gets its distinctive sound from 12 bit sampling done at about 26 KHz. By comparison, a CD based on 16 bit sampling at 44.1 KHz. It was beloved of hip hop producers from the late 1980s though to the mid 1990s. It is still sought after now.

    This video gives you a good idea of how it is operated and hints at the benefits of hardware controls over software interfaces on modern digital audio workstation applications.

  • Airport chaos + more things

    Airport chaos

    Emirates statement on operations at London Heathrow – Emirates lays into London Heathrow’s airport chaos. The airport chaos has been labelled ‘airmageddon’, due to the restriction in numbers of passengers who can fly in and out of Heathrow in a given day of just 100,000 people. That’s 25,000 people a day lower than last year. While there is similar restrictions at Amsterdam’s Schiphol airport and a complete failure of their baggage system.

    Signage

    China

    China’s Collapsing Global ImageChina’s image abroad has declined significantly in the past four years, a sharp revearsal from the relative popularity it enjoyed in Africa, Asia, and Eastern Europe from the 1990s to the late 2010s. While previous Chinese regimes stressed humble non-intervention on the global stage, distributed generous infrastructure funding via the Belt and Road Initiative, and conducted massive soft power outreach programs through media and academia, many of these strategies have been reversed or rendered ineffective.  As Council on Foreign Relations Senior Fellow for Southeast Asia Joshua Kurlantzick notes, “[there] are multiple reasons for China’s deteriorating global public image. China’s overall rising authoritarianism at home, its cover-up of the initial COVID-19 outbreak, and its brutal repression in Hong Kong and Xinjiang have hurt its perception among many foreign publics. China’s continued zero-COVID strategy has cut it off from much of the world, undermined people-to-people relations with other states, and cast some doubt on the Chinese model of development—even among some Chinese citizens.” – worthwhile contrasting with the following research, which implies a negative but more complex and nuanced situation – China seen as better than EU in completing African projects, survey finds | South China Morning PostPoll of more than 1,000 policymakers on the continent puts priority on physical infrastructure, speedy results and non-interference in internal political affairs. European Union charts higher on quality of products or services delivered; good working conditions; creating jobs for Africans; upholding environmental standards

    Ethics

    Chinese vaping giant flouting UK advertising rules on selling to children | E-cigarettes | The Guardian – the internet facilitates lawless commerce. Not terribly surprised that this happened. And it adds to the drumbeat of news that should foreshadow a crackdown on TikTok

    Finance

    HSBC installs Communist party committee in Chinese investment bank | Financial Times – I don’t think that it would be beyond the realm of possibility seeing HSBC China and Hong Kong breaking off ARM China style under the auspices of Ping An and the Chinese government. Ping An is actually a cross holding: HSBC is the largest shareholder in Ping An and vice versa. The question is can they take the bulk of the HSBC Asia businesses with them like Singapore et al as well? This could happen based on company structure and western shareholders would be left with the equivalent of an empty husk

    Value stocks are ready for their moment | Financial Times 

    Why Xi Jinping changed tack in his crackdown on Didi | Financial Times – one does have to wonder if this was more about graft and the lack of the Xi faction benefiting from Didi as anything else?

    Ideas

    France, Farmers, and the Failing ‘Extreme Center’ – interesting read and perspective

    Innovation

    USICA enters the wilderness – Protocol – failure of US technology legislation

    Japan

    Virtual YouTuber finds a way to shake hands with real-world fans, give them high-fives in Japan | SoraNews24– really interesting exercise in user experience design mixing the real and virtual

    Luxury

    Fashion Obscura: Hussein Chalayan’s Outsider Fashion – The V&A held an exhibition of his work several years ago (I think 2009) that was amazing

    Hussein Chalayan design

    Manolo Blahnik wins 22-year legal fight over China trademark | Financial Times – which means that they lost out on the golden age of China’s luxury sales. Expect things to get a lot leaner as Xi Jingping gets in for another term and tries to move the party towards the controlling force in all markets.

    Media

    Arnell: Is HBO Max’s retreat from Europe the start of a trend? – The Media Leader

    Security

    Hong Kong Law Reform Commission proposes 5 new offences to rein in cybercrime, with tougher penalties of up to life imprisonment | South China Morning PostWill this proposed ordinance be available as a charge, with the prosecution claiming the criminal intent is an offence involving national security?” he asked. “Could all social media become a target? Given the wide criminalisation of speech in the context of national security and sedition charges is there a risk a charge under this ordinance will be added?” Davis said he was also worried the proposed amendment would be used to reverse the outcome of an earlier decision by the Court of Appeal in 2019 which limits the reach of an ordinance that prohibits “access to a computer with criminal or dishonest intent” to cover a person using their own tech devices.

    Wireless

    Ooredoo to sell Myanmar operations – report – Telecompaper – nine years ago I was helping Telenor launch in the Myanmar market and Ooredoo was launching at the same time. Interest penetration in Myanmar was about 2% at the time.

  • The Power Law by Sebastian Mallaby

    The Power Law lays out VC history

    The Power Law: Venture Capital and the Art of Disruption does for the technology venture capital industry what Accidental Empires and Where Wizards Stay Up Late did for the technologists that they financed.

    The Power Law

    About the author Sebastian Mallaby

    Prior to reading The Power Law Mallaby wasn’t a familiar name to me. Looking into his background I could see why, Mallaby is a Washington Post columnist and specialises in international economics for the Council of Foreign Relations. A perfect CV for a policy wonk. His previous works have included a biography of Alan Greenspan, the World Bank and a book on hedge funds.

    What the book doesn’t cover

    The origins of modern venture capital in the pre-second world war era was through the family offices of people like the Wallenbergs and the Rockefellers. The Power Law only picks up the story post-war and has a distinct US bias in its storytelling.

    Synopsis of The Power Law

    George Doriot

    Mallaby starts the story with Georges Frédéric Doriot and the American Research and Development Corporation (ARDC). What’s interesting Doriot is how he was different from today’s VCs with a focus on patriotism. Doriot is most famous for his funding of Digital Equipment Corporation (DEC), an enterprise computer company whose mini-computers facilitated the early internet and many business computer systems. At the time of DEC, the Boston area seriously rivalled the Bay Area as the technology centre.

    Treacherous eight

    As the book goes into the story of Arthur Rock and his relationship with the treacherous eight who left Bill Shockley’s lab, this is where many Silicon Valley histories start to coalesce with The Power Law. Mallaby adds a little more, such as the 600x return that both the eight and Rock enjoyed from their investment. At 96, Rock is still alive at the time of writing. He is more recently remembered for his involvement of firing of Steve Jobs from Apple in 1985, a good deal of this came down to his distaste for Jobs informal appearance.

    Sandhill Road

    Arthur Rock and former Doriot student Bill Draper benefited from being in the right place and at the right time. The US government looked to spur innovation as part of the cold war and the Bay Area was were much of this innovation would happen. Sequoia and Kleiner Perkins followed soon after, these names are now central to the Sandhill Road venture capital ecosystem, but in 1972 they were just starting off with businesses like Atari. Atari wasn’t started by experienced business professionals, but by a twenty something who thought meetings in the hot tub were a good idea. Atari marked a point in time when VCs had to become the adults in room, or as Mallaby put it ‘active investors’.

    What I didn’t realise at the time was how early in Kleiner Perkin’s history was their engagement with biotech pioneer Genentech. I didn’t realise that Genentech was funded before Apple and was more a peer of Tandem Computers. Much of the early networking was based on a two-way door between established venture funded firms that were descendants of the treacherous eight and early venture capital firms that employed experienced executives as partners.

    Apple was notable for two reasons. Firstly, venture capital firms operated for the first time rather like an insurance syndicate with several funding the business rather than one large investor. Secondly, the returns on Apple seems to have solidified the model and bought niche financing to a wider awareness beyond the geographic pockets of the technology industry. Where many books like Accidental Empires would use this as a jumping off point to tell the story of the PC industry. The Power Law instead talks about computer networking, this makes sense if one thinks of Metcalfe’s Law as the power law that matters the most in the internet age. The early east coast venture capital community were more cautious than their west coast counterparts, partly because the east coast technology corridor had less of a loose network of connections compared to the west coast. I think that the different business culture of the east coast also had an effect.

    Connectors

    Doerr connected Cypress Semiconductor and Sun Microsystems, two companies that Kleiner Perkins funded so that they would make the SPARC RISC microprocessor. You could put this as the starting point for the golden age of UNIX servers and workstations – which we can trace forward to today’s Mac range and modern Google servers.

    Doerr had attempted other alliances before and in this way we see a different way how Metcalfe’s Law was the power law of the title. VCs has access to several nodes that they could connect together to try and build a technical vision. This is different to the idea we’re usually sold of the tech visionary / company founder a la the Google founders, Mark Zuckerberg or Steve Jobs.

    Meanwhile Don Valentine of Sequoia Capital usurped the founders of Cisco Systems and brought in a new team to run the business bilking the founders out of much of their money. Part of this was down to one of the original Cisco founders being a woman.

    Government money

    The VC industry of the early 1990s capitalised on government money. Netscape was a remake of Mosiac which was the first graphic internet browser software developed in the NCSA software design group. This was part of the government-funded National Center for Supercomputing Applications (NCSA) at the University of Illinois. UUNET was a commercial ISP based on the back of the ARPANET email delivery system. As the dotcom boom took off it was the largest ISP and the fastest growing. UUNET eventually became part of MCI WorldCom and then Verizon, where UUNET remains a key part of the Verizon business offering. Both Netscape and UUNET were viewed at VC successes but as The Power Law shows, the reality was more complicated.

    Irrational behaviour

    I thought that the original dot.com boom was irrational behaviour, but I learned from the account of GO Computers a decade or so earlier that irrational behaviour is very much in the blood of venture capital, which explains how we had WeWork and Uber in the 2010s which is where The Power Law finishes its tale. The funny thing about the irrational behaviour is that both the dot com era and the 2010s Softbank appear to have been an accelerant with their late stage momentum approach to venture capital deals which blew valuations on businesses up far beyond what would be reasonably expected otherwise. Softbank gave birth to ‘growth equity’ as a business model that took in many existing and new VC businesses including Russian Israeli Yuri Milner and his DST Ventures business which invested in Facebook, Stripe and GroupOn.

    Paul Graham and Peter Thiel

    Paul Graham was a founder of an ad tech business who then moved over to investing and had a reputation for warning startup founders about the nature of VC funding. It fitted neatly into the ‘John Gaunt’ type narrative that played well with some of his peers like Peter Thiel. The impact of these people setting an ideological agenda of sorts for Silicon Valley founders, together with a plethora of other founders providing seed capital to businesses from Google onwards greatly impacted the freedom of VCs to operate using their previous models and left the industry open for the Softbanks of the world to inflate everything.

    China off-note

    The Power Law offers a largely truimphantist view of the role of VCs such as Sequoia Capital in China. However, this seems to ignore the impact of Chinese VC and angel investors. It also chooses to ignore the negative impact of Xi Jingping.

    Conclusion

    Mallaby illuminates part of Silicon Valley history that I wasn’t familiar with, in particular VCs strategic role in steering technological change during the 1990s. Time has somewhat outpaced the book. The rise of Xi Jingping and the change in attitude towards safety and innovation amongst young Chinese is likely to make the China section look overly optimistic. The end of easy money, at least for the time being will impact the VC industry globally and growth equity looks like a folly during the present time. But if you want to understand how things were The Power Law is the ideal book for you.