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.
I was chatting with a friend who was evangelic in their description of the emergent community on the AltSpace VR (virtual reality) social network They had met great friends, the kind of meaningful interactions that seldom occurs on your Facebook wall now.
But was this about the power of VR? My take was that it is a minor factor at best. VR acted as a filter, it brought similar likeminded early adopters together. In many respects this mirrored other technology filters: the early days of dial up bulletin board services (particularly in the US with free local calls on the Bell network carriers), AOL and CompuServe chat rooms or the Usenet.
The power of connecting likeminded people can be a transformative experience in the minds of participants.
If I think back before my time on the internet, my friend’s experience in the emergent community of AltSpace sounded like the people I met at the Hacienda. It sounded like the experience of many of the regulars at acid house club Shoom – which was hosted by Danny Rampling out of a small gym in South London.
These experiences are once lived, often never recaptured experiences rather like being on a school or college sports team. They only exist for a fleeting moment in time.
It was like being an early member on Flickr, or my friend Ian’s experience on CompuServe chat rooms (where he met his future wife).
So what makes these communities special?
Likeminded people who are likely to share a certain amount of norms and have common grounds to be there
A relatively small number of people. This number becomes inexact. In a good nightclub it would be a certain amount of exclusivity because not everyone knew it was there, rather than a strict door policy. The strict door policy is usually a remedial item done once the norms try and break down
Agreement to a set of common behaviours, for many years a common etiquette held sway on networks like Flickr. Facebook doesn’t have this except in tightly managed private groups
So what happens to these communities?
A number soldier on, particularly around passion points such as Harry Potter books / films / games
A small minority (cough, cough) Facebook for example transcend their community and turn into a utility with pockets of interest hidden in secret
Things move on. Think about restaurants or nightclubs that are now sites of investment properties in London or Manchester
About the photo: I took this on an early trip to Hong Kong. Every Sunday the Filipino and Indonesian communities would gather in different parts of the city to see friends, eat, sing, dance and trade items. This picture is of Filipinos, taken in the private public space under the HSBC building in the Central district. Some years later this was a site for the Occupy Central protesters.
Korea to Fight Smog with Eco Vehicles – The Chosun Ilbo (English Edition) – interesting dual electric / hydrogen strategy in their eco vehicles. Hydrogen makes sense because of its compact nature as a form of energy, that helps with range anxiety and the amount of time taken to ‘fill up’. As a use case hydrogen makes more sense than modern electric batteries, the key challenge to overcome is the current price differential.
Why are millennial-obsessed marketers ignoring women over 50 – when they spend the money? – Mumbrella Asia – gen X is a smaller demographic – so their ‘control of 95% of consumer spending decisions” power of spending might be counterintuitive, youth is aspirational – which is why old age is being redefined by boomers. There is also an argument that focusing on young people is focusing on consumer lifetime spend. The last reason is hard to gel with the overall short terms approach to marketing currently employed
Apple reportedly shifting more iPhone XR orders to Foxconn from Pegatron, says paper – Pegatron’s production has been affected by a lower-than-expected yield rate and shortages of workers at its plants in China – the manpower issue at Pegatron is very interesting and implies a possible rift between the factories and local government. Historically local governments have gone out of their way to facilitate large Taiwanese employers China has just begun to see a decline in worker numbers overall in its population. Pegatron used to be part of ASUSTek. When that business reorganised its OEM manufacturing business became what we now know as Pegatron.
Deepfakes web α | Generate your own Deepfakes – Japanese currency denominated service to create your own deep fakes. This service looks as if its designed for the curious, rather than virtual revenge porn creators, the accessibility of this capability brings with it a variety of issues
Smart cities — too clever by half? | Financial Times – hell is other people’s technology. Smart cities don’t have the attendant ethical considerations because that would dull their ‘smartness’. In addition law enforcement would prefer to have maximum choices on data. It was interesting that China Mobile’s key use case for 5G was urban crime fighting in the first adverts that they ran.
If you still use a DSLR camera nowadays given the usefulness of smartphones, the phrase mirrorless has become de rigueur.
Photography like most other things in life have become progressively more digital. Technology is increasingly mediating every aspect of our experiences, a screen comes with everything.
Digital retouching and filters have dramatically changed the reality of modern photography. It has also made photography even more ephemeral. I have an online photo library that holds thousands of pictures, compared to the hundreds of photos that my parents have in an old album and envelopes from film processing labs stuffed in a chest of draws.
I still like ‘mirrored’ or single lens reflex cameras.
The digital single lens reflex or DSLR camera free the photographer from the tyranny of film; but still allows the photographer to frame up a shot in advance before using the battery life of the camera.
Looking through the view finder of an SLR gives you a temporary isolation from peripheral visuals allowing you to focus mentally as well as physically on the subject in question. It allows you to slow down and take your time in the moment. It changes the way you see the world. The experience using a mirrorless camera is rather different. There isn’t the ‘focus’ in the experience and it blends post production with taking the picture in the same time and space.
Of course, as with most technology experiences, the human experience is viewed in a very one dimension manner. An object to be overcome in the least minimum viable way possible. It’s a very regressive approach to design, cost is put before simplification. The increased focus on software engineering leaves a rough unsatisfactory digital experience.
The products lack the ability to spark joy as Mari Kondo would say. That makes the whole obsolescence and replacement cycle so much easier. More related content here.
I started thinking about a post on innovation, after an agency meeting about a possible project. My friend Nigel Scott has been researching the venture capital industry. His ideas fired some of the thoughts in this post.
It caused me to reflect again on innovation and the way we think about it.
Innovation rewards hard work?
We are often told that innovators work really hard and strive to achieve their goals. In Where Wizards Stay Up Late – there is a description of Silicon Valley culture. Late nights by engineers and takeout food was considered one of the factors that drove the early Internet. Engineers were building new technologies as they went at break-neck speeds.
The problem is that for many jobs there is no 9-to-5 now. When I worked in agencies 12+ hour days were typical depending on the client load. Yet we weren’t pulling Cannes Lions award-winning work out of our butts.
In China, many companies now work to ‘996‘. That is 9am to 9pm, 6 days a week as core hours. This is basic a minimum requirement for engineers. Somewhere like Huawei, try to build a ‘wolf’ mentality. They work their staff much harder and they’re expected to retire at 45 – presumably physically and mentally burned out.
Working hard is a hygiene factor, technology has made it that way. Your typical Uber driver is gamed by the driver app to put in excess of 12-hours/day. Both knowledge and unskilled workers would have a similar level of time poverty.
Innovation is like buses
For long-suffering public transport users in the UK many services are compared to buses. Due to road traffic and scheduling, there would often be an overly long time for a bus to arrive. When it eventually did, there would be another two following very closely behind.
You can see a similar thing with innovation.
Whilst we’re used to thinking of John Logie Baird as the inventor of television – and Baird worked very hard on television. The reality is that television was based on a series of inventions from the middle of the 19th century onwards.
There are at least 20 different inventors who had some claim to coming up with the light bulb. But Edison did manage to create the first commercially successful bulb. British school children are taught about Joseph Swan’s carbon filament bulb. This was let down by the vacuum process in manufacturing and poor quality electricity supplies so the bulbs didn’t last very long. Swan had solved his bulb’s problem and changed the filament.
It was only at this point that Edison started his research into electric light bulbs.
More recently, I was talking to an agency about a piece of work that didn’t come off in the end. The discussion turned to a drug that was very recently launched. The problem was that although they were first to market, they weren’t the only inventors. A large rival had launched drug approvals for their product in markets were original firm hadn’t focused on for its initial approvals. Another two companies were immediately behind them and likely to drop their prices (and profit margins) to make up for later market entry.
If one thinks about the modern computer with its graphical user interface. This was created by layers and layers of innovation. Doug Engelbart, whilst working at SRI International demonstrated the following to an audience of government officials in 1968
GUI interface
Mouse pointing device
Text manipulation
Collaborative editing
Video conferencing (a la Skype)
The Xerox PARC (Palo Alto Research Center) refined Engelbart’s concepts further with a complete modern office by 1973. Steve Jobs and his team got into see it, which drove work on the Lisa and then the Macintosh. Microsoft got in and eventually came up with Windows. Microsoft also learned from building software applications for the Macintosh.
Digital Research invented their own GUI layer called GEM. GEM was demoed at Comdex in 1984; right about the time Apple launched the Macintosh. Commodore launched the Amiga in 1985 and also added multi-tasking – the ability to run two or more apps at the same time.
These are just a few examples for the sake of brevity. But the inventor slaving away in isolation to come up with something, uniquely innovative is not rooted in evidence. Yet intellectual property law gives lie to this myth. I don’t want to belittle the work done, but it is as if there is a certain amount of predestination to invention based on prior innovations.
Innovation happens
This predestination of technological progress is something that Kevin Kelly labeled the Technium. In his book What Technology Wants he posited that technological progress can be slowed, but nothing short of an apocalypse can stop it completely. Here’s what Kevin Kelly said in an interview with Edge.org when supporting the launch of What Technology Wants:
The technium is a superorganism of technology. It has its own force that it exerts. That force is part cultural (influenced by and influencing of humans), but it’s also partly non-human, partly indigenous to the physics of technology itself.
We understand the innovation process?
Nigel Scott has done some research on the historic records of venture capital companies. And a key finding was the Silicon Valley venture capital firms do a ‘random walk’ on Sandhill Road. It implies that much of the advice dispensed is survivor bias or post-rationalisation.
You hear the phrase ‘pivot’ which means changing the model to profitablity. Old time VCs used to talk about investing people or teams, which explains why research by Boston Consulting Group found that women get less funding than male entrepreneurs.
Venture capitalists have the monetary incentive and the budgets to develop a thorough understanding of innovation, yet they don’t seem to apply it successfully. Which begs the question – how much do we really understand about innovation?
Six decades into the computer revolution, four decades since the invention of the microprocessor, and two decades into the rise of the modern Internet, all of the technology required to transform industries through software finally works and can be widely delivered at global scale.
Over two billion people now use the broadband Internet, up from perhaps 50 million a decade ago, when I was at Netscape, the company I co-founded. In the next 10 years, I expect at least five billion people worldwide to own smartphones, giving every individual with such a phone instant access to the full power of the Internet, every moment of every day.
On the back end, software programming tools and Internet-based services make it easy to launch new global software-powered start-ups in many industries — without the need to invest in new infrastructure and train new employees. In 2000, when my partner Ben Horowitz was CEO of the first cloud computing company, Loudcloud, the cost of a customer running a basic Internet application was approximately $150,000 a month. Running that same application today in Amazon’s cloud costs about $1,500 a month.
As one can see Andreesen’s title is a bit of a misnomer. Software is only the front end of a technology stack that is transforming the world. That transformation started before the web, before broadband infrastructure; with the rise of integrated circuits. Machine learning is doing some impressive things, but they are part of a continuum. Machine learning in data mining is building on work done in academia in the 1980s. It is replicating work done in the 1990s on decision support systems and business intelligence software.
Even, back in the early 1990s, commercial chemical labs were using software to guide product development. Rather than having to test every combination religiously; you started inputting formulations and results. The software would then extrapulate possible combinations and narrow down on an ideal formulation much quicker.
As for machine learning in consumer products; it mirrors the late 1980s. Fuzzy logic came out of a 1965 research paper by Lofti A Zadeh at the University of California, Berkeley.
Japanese manufacturers built lifts that optimised for traffic flows of people. Microwaves that set its own timer for defrosting an item. Washing machines customised spin cycles based on the drum load. Televisions adjusted their brightness based on the ambient conditions of the room. (When similar technology was rolled out on early Intel MacBook Pro screens and keyboard lights it was billed as game changing). It removed a lot of blur from camcorder videos. All applications that are not a million miles away from smart homes and consumer technology today. They improved energy efficiency, with precise lighting, heating or cooling.
A western analysis of Japanese technology companies; usually cites their ‘defeat’ by Silicon Valley as an apparent lack of software skills. I’d argue that this lacks an understanding of Japanese software capabilities. From gaming to rock solid RTOS (real time operating systems); Japanese products met Andreesen’s software definition. The Japanese didn’t manage to sell enterprise software in the same way as Silicon Valley. It is something to bear in mind given the current glut of machine learning-orientated businesses in Silicon Valley. Does it mean that we won’t have the type of general AI applications that we’ve been promised in the future? No far from it, though a technological idea often takes several tries before it breaks through.
What becomes apparent is that software making an impact is merely the last stage of previous innovations. The problem with Andreesen’s model is that it portends what Judy Estrin described as innovation entropy.
Andreesen’s model couldn’t exist without:
Packet-switched networks – 1960 (RAND)
Unix-type operating systems – mid 1960s (MIT, AT&T Bell Labs, General Electric)
C programming language – 1972 (Unix development team)
Optical fibre networks – 1965 (Telefunken)
Internet router – 1966 (UK National Physical Laboratory)
ADSL 1988 (Bellcore)
DOCSIS 1997 (CableLabs)
So the core technologies that Andreesen’s software relied upon to eat the world was between 15 and 50 years old. It also relied on a massive overinvestment in optical fiber. The dark fiber was done as part of a telecoms boom that occurred around the same time as the dot com boom. Software isn’t eating the world, its just the cherry on top of innovation that’s gone before. More importantly, software seems to be an end point and doesn’t seem to extend the base of innovation further.
A second problem is that semiconductors phenomenal progress in integrated circuits is slowing down. Part of the problem is that more money is being dumped into disrupting the supply and demand for service industries, rather than funding start-ups who will power the next wave of underlying innovation that future software will rely on.
