Ged Carroll

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.

  • Chinadroid

    The modern mobile eco-system was built in the factories of China, in particular Shenzhen. But two mobile eco-systems exist: China and the rest of the world, hence Chinadroid.
    Downtown Shenzhen
    Chinadroid: These are phones that use the Android Operating System but have not gone through official channels for compatibility (CTS) or do not have a Google Mobile Services (GMS) license.

    A couple of scenarios are playing out to drive Chinadroid handsets:

    • Virtually no Android handset in China has access to Google services including the app store. Baidu estimates that are over 386 million active Android handsets in China, using different app stores and web services.  Some of these have a very different look-and-feel like Cyanogen or MIUI – Xiaomi’s flavour of Android
    • A second scenario is where smaller manufacturers don’t get Google to play ball and get them onboard with a GMS licence for those handsets that they do sell outside China. Google historically hasn’t bothered to scale to address the international aspirations of these tier two and tier three handset makers. Their product is probably being used across the developing world, from the Nigerian merchants with their suitcases of phones flown from Hong Kong to the virgin mobile markets of Burma or Laos. The big challenge with these secondary players is that they are market makers and not having them registered means that Google doesn’t get the full benefit of being able to onboard these people on to the internet and hooked into the Google eco-system
    • Will the Chinadroid situation drive a completely new OS system (like SailfishOS) with Chinese characteristics? Doing their own operating system has a lot of technical challenges, but it may be done for security reasons

    More information
    The Shenzhen Market Mini-Guide | Medium
    China now has 386 million active Android users | Techinasia
    The rise of the Shenzhen eco-system
    The smartphone value system
    Google I/O: who is Google trying to disrupt?

  • 2014 crystal ball gazing: how did I do?

    2014 crystal ball gazing

    2014 crystal ball gazing was a culmination of thinking that I have been doing on where digital is going. For the past few years I have been thinking about where digital is going and what it all means. At the end of last year here were my projections. I do realise that putting my 2014 crystal ball gazing out there may make me luck very foolish, I guess you can make up your own mind.

    Drone deliveries

    Amazon won’t do drone delivery in 2014 – Whilst trials of drone deliveries have been ongoing and drones seem to be getting more mainstream thanks to companies like DJI Amazon hasn’t done deliveries yet. In addition, the FAA in the US started to regulate commercial drone usage, which is likely to slow down adoption in the short term, while providing a stable legal framework of operation in the longer term.

    Small data

    Small data – Not so much an explicit interest in smaller data sets for meaningful things, but the Hortonworks IPO had an almost Netscapean quality to it with shaky revenue streams and a healthy share price bounce when it came to market. It also made Silicon Valley nervous as companies were concerned about negative perceptions toward the big data ‘sector.

    O2O

    Offline to online integration – O2O seems to be a bigger thing in China and other east Asian markets with ‘mobile search keywords’ put into adverts and TV programmes for years. The QRcode seems to be a uniquely Asian form of integration largely abandoned by western developers – mainly because they didn’t seem to use them in as imaginative a manner compared to Tencent et al. Lower power Bluetooth beacons are still experimental. Weve the joint company set up by the UK wireless carriers to provide contextual data about consumers to integrate online and offline marketing is running at a loss and has abandoned peripheral business opportunities in mobile wallets/ m-payments.

    Programmatic

    Algorithmic display advertising – there are a number of ways in which greater data is being brought to bear on programmatic ad spend but algorithms weren’t the biggest thing shaping the market this year. Major brands seem to have developed a distrust of the agency trading desks and the lack of transparency into market data. Instead of giving agencies an unfair advantage and allowing them to play both sides of the trade, they are bring the trading desk in-house.

    Mobile ad formats

    Mobile display advertising gets a radical reduction in formats – at the time I wrote this prediction, I had been concerned about clickthrough rates and mistaken clickthroughs, so I considered a reduction in mobile formats to just the ones that worked best like the page takeover. I didn’t forsee a bubble economy driving mobile display revenues around games apps. This may come to a head soon as western consumers seem to be less open to downloading to new apps according to research by Deloittes.

    Content marketing

    Content marketing on OTT platforms – WeChat has evolved in leaps and bounds with some amazing campaigns coming out in China, Burberry has worked with Tencent to push the envelopes on their campaigns and have included live webcasts. We haven’t seen so much of this happening with campaigns aimed at western consumers, but one brand springs to mind Vivienne Tam who ran a super model contest on the platform including a voting function and a special blog covering activity around New York Fashion Week as a separate tab on the account – all in English.

    China going global

    Chinese technology brands will finally be successful outside China – It’s still early days, but we’ve seen Lenovo and other Chinese brands demolish Samsung’s share of the smartphone market in the developing world. WeChat has expanded into India, Spain and South East Asia. OnePlus and Xiaomi have started selling direct in Europe, Singapore, Indonesia, Malaysia and Hong Kong. Alibaba had a monster IPO and Baidu bought into fast start-ups like Uber.

    Consumer privacy

    Privacy issues won’t change much with consumers – Back at the end of last year I didn’t expect the Snowden story to continue to echo onwards. On the surface things didn’t seem to change with consumers, but there has been sufficient consumer interest that technology vendors are addressing (some) consumer privacy needs much to the chagrin of the law enforcement/military industrial complex. This privacy experience hasn’t been universally enjoyed (depending on country regulations) but things are changing.

    Tech workers

    Technology company workers are the new bankers – the tech worker bus protests that started at the end of December 2013 mushroomed, so by August 2014 Westboro Baptist Church got involved. Uber’s surge pricing and Snapchat’s frat boy CEO were just some of the lightning rods that made the tech sector look like vintage Wall Street.

    Immersion

    The rise of immersion – When I wrote my predictions I felt that I had been cheated out of the cyberpunk future that I had been promised and saw it as a major opportunity. Virtual reality had lost out in the 1990s when cumbersome helmet displays would disorientate you and cause you to throw up as the visuals and movement created dissonance partly due to a lack of computing power. Now we’ve seen cyberpunk author Neal Stephenson the chief futurist at one VR company, Facebook own another and companies like Zeiss and Samsung enter the fray. Together with advances in AR post-Google Glasses we are likely to see major innovations beyond gaming in the web-of-no-web.

    Machine programming

    Machine learning will threaten to disrupt programming – while machine learning is making an increased amount of noise in the tech media it is being seen as a leap forward in artificial intelligence rather than as an alternative strategy to traditional application programming. Skype adopted for their latest language training.

    Hyper-competition

    A race to the bottom will bring out hyper-competition in mobile semiconductor suppliers – the mobile market did race to the bottom which has made a major dent in Samsung and Huawei’s marketshare. Mediatek and Hi-Silicon are producing innovative silicon that has pushed phone performance forward. However rather than being a race to the bottom on pricing, Qualcomm has been taken to task by the Chinese government and Qualcomm admitted in its own financial documents that there at least some partners who weren’t paying them licence fees.

    How do you think I did on 2014 crystal ball gazing?

    More information
    2014: just where is it all going? | renaissance chambara 

  • Patent cliff + more things

    Pharma to lose $69 billion in five years as patents expire | Pharma File – patent cliff kicks in. Pharma has been buoyed historically by a run of blockbuster drugs. These drugs are coming off patent and there is a lack of obvious replacements. Secondly, investment in research is getting more and more expensive for pharma companies to stave off this patent cliff. Expect the pharma industry to try and go for intellectual property right extensions to try and stave off the patent cliff

    Laurence Fink Says Activist Investing Can ‘Destroy Jobs’ | New York Times – not terribly surprising but interesting that Black Rock has come out and said it

    Britain’s autumn statement: Two lost decades? | The Economist – at least since there is no compelling reason for things to improve (like with North Sea oil in the 1980s)

    Intelligence: Nike’s CIO Had to Get the Hell Out of Portland | Racked – surprised that Nike hadn’t managed to build a more urbane environment in Portland. I could see this as being a great case study for Who Is Your City author Richard Florida

    Intelligence: Gucci Cleans House: CEO, Creative Director Are OUT | Racked – not surprising given poor sales performance

    WhatsApp might be working on a web client | VentureBeat – me too feature to catch up with WeChat, expect QRCode hand-off

    Yahoo shuts offices in Malaysia, Vietnam, Indonesia | Campaign Asia – Malaysia I understand: closeness to Singapore, less of an economic power machine and a marketing sector that needs to work hard to keep up with legislation and local sensibilities. Indonesia and Vietnam are surprises given the high growth and populous markets that they represent

    Sony Lawyers Warn Press to Destroy Documents from Hack | Variety – this is tough one legally Sony as journalists are largely protected by the the US constitution

    Top 10 websites in the US according to Quantcast: A few observations | Chris Dixon – some interesting data points, you can still see the power of the IE installed user base and email looking at this data

    The Cheapest Generation – Atlantic Mobile – it assumes that will have the same amount to invest

    Silk Road subsidies undermine rail link | South China Morning Post – really interesting article about the nitty gritty of rail freight including lack of international common legal standards and requirements for paper work, insurance etc

    The Customer Journey to Online Purchase – Think with Google – really handy for media planning

    Sony hack: Studio Tries to Disrupt Downloads of its Stolen Files | Re/code – ethically dubious at best

    Xiaomi’s Indian expansion could be derailed by a patent tussle with Ericsson | Quartz – this is interesting as IP could put a speed bump on the new smartphone players for the time being, though this may decline in 5G as Huawei and ZTE get a bigger proportion of the IP in comparison to Alcatel-Lucent, Qualcomm, Samsung, Broadcom, Nokia, and Ericsson

    Russia tries again, in vain, to steady its collapsing currency | Quartz – it’s a buffet that the west hasn’t been invited and will end with a stronger China – having got hold of military and strategic industry IP, industrial assets and natural resources to drive further Chinese growth and strength

    Wal-Mart is the latest company to badly overestimate China | Quartz – there is a whole blog post in this story about growth, the nature of growth, management by Excel spreadsheets and a bit about China. Maybe I will have the time to write it one day

    EDMTCC 2014 – The EDM Guide: Technology, Culture, Curation – white paper trying to defend the bastard child of the dance music scene now that the Americans discovered it including Swedish House Mafia alumni (PDF)

  • Oddpost webmail

    Before Oddpost

    When you think about Oddpost, you have to cast your mind back almost two decades in 2002, the web was a very different place. In order for applications to do anything they would have to refresh the whole page. You couldn’t dynamically edit a document with other colleagues like you can with Google Docs for instance.  Which made applications like time tracking, or updating the basket on an e-commerce site a bit of a pain.

    The catalyst for change for app like performance in the browser was a webmail client called Oddpost.
    Oddpost RSS aggregator

    Oddpost.com

    Oddpost was different in a number of ways to anything else at the time. At first glance, it looked like a three pane desktop mail client, there was less navigation controls than your webmail interfaces at the time. Which heralded a very different design approach in subsequent web 2.0 companies. It is hard to articulate now, Gmail wouldn’t arrive for another two years and when it did it was invite only which meant that for the average Joe it took a while to come around. There was no download or application required to make it work (like a Java applet for instance). Oddpost, instead used technologies which are now humdrum, but a decade ago were the web equivalent of a revolution. Dynamic HTML, XML, and Simple Object Access Protocol (SOAP) allowed individual elements of a page to be updated that provided a desktop app-like experience.

    Design

    Oddpost’s design approach didn’t lend itself to advertising that would slow down it’s dynamic interface and its method of updating components of a page rather than the full page adversely affected the page view metric advertisers cared about at the time. Storage was more expensive than it is now, so it made sense that Oddpost was a paid-for product.  In return for your subscription of $30/year got you a whopping 30MB of storage in your email box and an integrated RSS reader (rather like mail.app with OSX or Outlook with Windows).  In addition to the unique interface Oddpost offered support for both POP3 and IMAP standards which allowed access over an email client. IMAP allowed you to keep the files on the system providing you with a standard view using the web interface, your own computer, PDA (using Bluetooth and your cell phone as a wireless modem) or early smartphones like the Nokia 7650 and Nokia 6600 which came out in 2003. I was unusual at the time in having an IMAP email account, the entry cost for this service was purchasing an Apple computer.

    Oddpost was rough around the edges. It would be another few years before the metal lid of an Apple laptop would be as common as it is now, so it wasn’t as much of an issue that Oddpost only worked on Internet Explorer (version 5 or better) for Windows. The search functionality only did the headlines of messages not the body text. The company was eventually acquired in April 2004 by Yahoo! as it looked to bolster its position as an email provider against the then new Gmail service.

  • Shenzhen ecosystem

    It is hard to believe that the Shenzhen ecosystem was built over just a few decades. Just over 30 years ago China moved from a period of cultural isolation to gradually opening up to the commercial world beyond its borders. The place to naturally start this was in Guangdong province close to the then British colony of Hong Kong. A small fishing village grew to become the workshop of the world. The growth of Shenzhen was driven by investment from multi-nationals and overseas Chinese. One of the earliest industrial areas was called Overseas Chinese Town or OCT. OCT has changed from manufacturing to retail and offices for the creative industries in the former factory buildings.

    Hong Kong had built up capability and expertise in light manufacturing and clothing from the 1950s through the 1970s. It is still important for supply chain intermediaries. This was the ‘golden age’ of Hong Kong. This is how many of the Hong Kong oligarchs made their first fortunes; which they then invested overseas, in China and into the Hong Kong real estate market.

    Globalisation had started after the second world war. But the opening up of China threw it into overdrive. Hong Kong industrials moved manufacturing plants for clothing, shoes, toys, plastic goods and electrical appliances to China.

    They were joined by Taiwanese electronics manufacturers and then multinationals from Europe, America and Japan. Hong Kong clothing manufacturers provided China supply chain expertise to western retailers like Walmart.

    The Shenzhen ecosystem was built on manual production. The deft fingers of Chinese women workers allowed a lot more precision than Japanese pick-and-place machines. Which meant a lot more flexibility in manufacturing using the Shenzhen factories. You wouldn’t have an iPhone if you used pick-and-place robots on the production line.

    Electronics manufacturing

    At first, these companies were used to fatten the wallets of customers who took on the marketing and distribution of electronics in the West. The dirty secret about many PC and laptop designs was they were standard underneath. Then this cost saving was passed on to the customer as people like Dell went for close to lowest price operator based on a direct mail / online direct ordering and cut out the channel.

    Finally that wasn’t enough, and most of the laptop and PC resellers make no money. Instead the main people to profit from these sales were Microsoft which licensed it’s Windows operating system and Intel which provided the majority of compatible micro-processors capable of running Windows-compatiable applications. In the PC industry there is usually just two or three profitable manufacturers and one of them is Apple. Historically it was Dell, then Hewlett-Packard and now it is likely to have be Lenovo.

    Shrinking PC-esque computing power into the palm of one’s hand was inevitable with the rise of flash storage and Moore’s Law facilitating power-efficient processors. The challenge is battery technology, packaging and industrial design.  Apple pushed the envelope with suppliers. Hon Hai and other manufacturers installed hundreds of CNC machines to fabricate thousands of metal phone chassis. These radical changes in manufacturing capability were opened up to lower tier manufacturers raising the standard of fit and finish immeasurably over a few years.

    Now Xiaomi and Lenovo product handsets that have better build quality than many Samsung and HTC handsets. The performance is good enough (again thanks to Moore’s Law) and the handsets run the same applications. Sony, HTC and Samsung handsets look as marooned as Sony’s Vaio PC range in the Windows eco-system.

    Shenzhen’s ecosystem has been a great leveller of manufacturing and industrial design capabilities with Apple at the leading edge of what’s possible from an industrial design and materials technology.

    More information
    Shenzhen Government Online – this loads slow like they are phoning the pages in from 2002, but is informative
    The smartphone value system – An earlier piece I wrote about the challenges of the Android eco-system