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Do we need a farm report for Innovation?

Posted by admin on Jun 9, 2010 in Creating New Markets

What if we had a regular innovation report similar to the daily farm report. For those of you without an agricultural background (which is most everyone these days) every day before they headed out to the fields to work, farmers would listen to the farm report on the radio. This would provide all of the farmers with the information they needed to make decisions for the days tasks including detailed weather reports, changes in grain futures, etc. What is the equivalent for companies seeking to innovation?

This question came up while I was attending the seventh annual Innovation Journalism Conference at Stanford University. The journalists there reporting on innovations focus more on the fruits of the harvest (new iPhone 4.0!) rather than the hard work that goes into enabling that harvest. Innovation Process reporting is difficult to do but something that teaches more about why the future is not as evenly distributed as we might expect. Then it hit me, is there an opportunity to create the high-tech version of the farm report to help those struggling to innovate?

You could imagine a a regular report that provides firms with such information, from around the global market place on such topics as…

  • Foreign Exchange rates
  • Demographic Trends
  • Customer sentiment trends
  • Patent scorecards of number and categories of published inventions
  • Changes in tax rates
  • etc.

So what do you think? Is this something we could use? What other elements are important to include? What frequency would you want this type of information?

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Shared and Conquer

Posted by admin on Dec 17, 2009 in Creating New Markets, Mobile Experience, Uncategorized

Was meeting with a fascinating entrepreneur today, the details of which I cannot share because it’s too soon and too cool! But one of the defining aspects of his enterprise architecture is the strong offering network.  Rather than maximizing the business returns, he’s focused on maximizing the network’s financial returns, so that everyone that participates wins.  He’s leveraging a notion I’ve been advocating for a while, strengthening market positions by building loyal and strong offering networks.  These strong offering networks, in which each node provides solutions to the needs of other nodes within the network while it’s own needs are met by solutions offering by other network members, are more robust in competitive markets.  One example of this today is how Apple handles the revenue sharing with the App Store for the iPod Touch and the iPhone.  By giving most of the application sales revenue back to the developers, Apple has attracted a sizable population of developers churning out a cornucopia of experiences that serve both to extend the hold Apple has on it’s users and attracting more developer talent to create for this market.  Apple strategy is in direct conflict with classic retail channel management where the retailer’s margin demands most of the time leave little of the consumer sales revenue in the hands of the original developer of the consumer experience.

Why don’t more companies, big and small, embrace the creation of strong offering networks?  It’s a difficult play to execute.  Many times you sacrifce short term financial gains for longer term market position and competitive advantage, two business attributes that are difficult to model with current accounting practices with any certainty.  Crafting strong offering networks also requires the other nodes in your network to want to play by the same long term rules focused on mutual benefit.  The advantages of such an approach are significant, especially if you are the first to set up such a structure in your market.  Once your success is know, your competitors will be rushing and struggling the learn the rules of the new game in town.  Think about anyone else that sets up an App Store for their device or network.  They have to, at a minimum, meet the same juicy terms for developers or exceed the experience offered by Apple, a difficult task indeed.

So it’s up to you, the leader, to decide if you want to continue the classic Divide and Conquer approaches to market dynamics or embrace the potential of Share and Conquer!

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Concerns about the coming education revolution

Posted by admin on Jul 30, 2009 in Creating New Markets

Just finished listening to a panel on the education at the AlwaysOn & STVP Summit at Stanford. The panelists were fantastic and really outline some incredible opportunities in the education space, especially under the Obama Administration.
James Shelton, the Assistant Deputy Secretary of Innovation and Improvement, US Dept of Education, had three opportunities he sees in the coming years.
1. Data systems & platforms that leverage cloud computing that require no infrastructure at the local level.
2. Unprecedented level of data will be available in schools, they need tools to understand and make sense of the data.
3. Providing access to rigorous courses to students that do not have local access. (AP in rural or Urban environments)

All of this has me personally very excited about the opportunities to improve both the quality and access of education in the United States. There is a hitch though that the panel did not explore…

As we look at the push to measure and analyze teacher and student performance we have to remember the key finding of Sutton and Pfeffer’s The Knowing-Doing Gap, organizations tend to encourage the behavior that they measure, or as sometimes related by Prof Sutton, “Be careful what you measure, you just might get it!”  This is especially pertinent for K-12 education.  Most assessments tend to focus on things that are easy to assess, testing facts, close ended problems, and route memorization.  Unfortunately these skills do not make America’s youth competitive in the global knowledge economy, especially when most any fact you’d desire to know is instantly accessible on the Internet via the new Oracles at Delphi, Google, wikipedia and the like.  In this future that is dawning faster than our education system can adapt, the skills we need to be developing and assessing in our students have to do more with open ended problem solving, creativity, and team work.  The three R’s are meant to be a foundation of education, not the whole house!  The challenge is that these necessary skills are more difficult to assess.  It’s harder to have a cram session on creativity or team building.  These are skills that are developed over time and practice.

Not to be one that tosses out a problem without potential solutions, I do see a few potential opportunities to both develop and measure these critical future facing skills our youth need to compete in the global economy.

Creative design contest such as those organized by US FIRST (www.usfirst.org) provide the experiences students need to both develop and demonstrate these skills.  FIRST can be expensive to participate in given the heavy hardware and corresponding travel aspects of the contest.  Online communities offer new possibilities of building and engaging student teams in shared creative endeavors .  Old (old because they were around while I was in school) organizations such as Creative Problem Solving or Bucky Fuller’s World Game, seek to engage students in the development of systems thinking and open-ended problem solving skills.  Both of these experiences could be virtualized in such a way as to scale the engagements to cover the entire nation.

In short, we need to prepare our children with the skills the need to participate in tomorrow’s dreams, not yesterday’s reality.  I would hope that the government and the rising class of education entrepreneurs would take up and drive new solutions into the market to develop, demonstrate, and measure these more complex thinking skills for our future leaders.

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Apple tops rivals in smartphone customer satisfaction – FierceMobileContent

Posted by admin on May 15, 2009 in Uncategorized

It’s not a big surprise that Apple is on top of the J.D. Powers recent Smartphone study.  What is a surprise is how close LG and Samsung are to the iphone.

Apple claimed top honors in consumer satisfaction among smartphone manufacturers according to J.D. Power and Associates’ 2009 Wireless Consumer Smartphone Customer Satisfaction Study. Measuring key device factors including ease of operation 30 percent, operating system 22 percent, features 21 percent, physical design 18 percent and battery function 9 percent, the J.D. Power survey awards Apple a score of 791 on a 1,000-point scale, noting the computing giant excelled in ease of operation, OS, features and physical design. LG 772 points and Samsung 759 points follow closely behind.

via Apple tops rivals in smartphone customer satisfaction – FierceMobileContent.

The differences in scores are probably within the margin of error for the study itself.  The question is, why are we surprised at the lack of difference in how people perceive the experience?  My belief is that the answer lies in how each of these OEM’s crafts and targets their experiences.  The OEM’s are able to compete successfully in the market due to the differences in user tastes.  The iPhone, though a compelling experience, is not equally compelling to everyone.  I feel that this is one of the main reasons the uber converged device will continue to be an elusive myth.  People are different and companies will continue to be successful by exploiting and supporting those differences.

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Death of Television Channels?

Posted by admin on May 1, 2009 in Creating New Markets

Very interesting post from the New York Times on how the cost of content is impacting the profitability of the cable companies where as their dumb pipe business of internet services is taking off.

I’ve been looking closely at the recently announced first-quarter financial results of Comcast and Time Warner, the country’s two largest cable systems.

Matt Rourke/AP

Over all, these companies are doing quite well, making more money than ever, with lower capital investment. But if there was one weak spot jumping out of the numbers, it was not their Internet business but their traditional TV service, where the cost of paying for content to put on all those channels is rising faster than subscription fees.

via The Problem With Cable Is Television – Bits Blog – NYTimes.com.

As a result, I’m having an internal debate on the potential death of channels.  Channels are in some ways the original website portals, locations on the frequency spectrum where you could find content, typically served by a single company but provided by many.  The success of the business model was predicated that the consumer would experience advertising served during their time on that channel/portal.  The channel would gain sufficient revenues from selling these ads to purchase new content, produce their own content, and hopefully make a tidy profit at the end of the day.

As the content gets more expensive and more people are consuming content by selecting specific content from the Internet more than affinity portals on cable networks (Sci-Fi or TLC or ESPN), the channels will start to lose ad revenues while their content acquisition costs continue to increase.  Portals/channels are no longer required for customers to discover and experience content of interest (think You-Tube, Hulu, etc.).  As a result, the blanket advertising model is crumbling.  As TV’s and laptops both begin to access the same content sources from the net, bypassing cable channels all together, there is an opportunity to tailor ads directly to the consumer based on the real time personal channel creation.  By leveraging membership and viewship rosters, YouTube, Roku, Hulu, and others can insert more pertinent ads to the individual or household consuming content outside the traditional cable channels/portals.

Couple this with the increasing quality of prosumer generated content and you have a rising ecosystem that could drive the cable companies into internet service providers at a more rapid pace.  I believe that this will culminate in the death of the channel as we understand it today.

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Can RIM win against Apple? A comment on Sramana Mitra’s recent post

Posted by admin on Apr 3, 2009 in Mobile Experience

Sramana Mitra has a great post about what RIM’s next strategic moves might be as they look at taking on Apple.  She suggests a potential Dell Acquistion and recommends that RIM focus on the enterprise segment, an area where Apple has been deficient.

Does RIM See The Gap in iPhone’s Defenses? | Sramana Mitra on Strategy.

I have some small issues with her recommendation that RIM  focus only on the Enterprise market.  The global markets are increasingly driven by consumers over enterprise.  In the prior downturns, the dominant recovery strategy provided tax incentives and other benefits to drive enterprise spending on services and durable goods.  Recent recovery strategies have focused on getting the consumer to open their wallets and spend their way to a bull market.

RIM would be giving up in ceding the consumer market to Apple.  At it’s core, RIM is a communication and collaboration company.  The Blackberry is about maintaining connection and awareness to your teams, customers, and other stakeholders.  This metaphor extends to consumers as well.  Whether you’re checking status on that customer install or letting your peeps know that you’ve got a hunger for Taco Bell, the underlying technology is the same.

Apple’s products, on the other hand,tend to dwell on the individual consumption of media.  iPhones and iPods serve the individual first and the customer’s social network second, if at all.  This is where the iPhone is vulnerable to the likes of RIM and Nokia, companies that understand that handsets are about communication first and media second.

RIM’s challenge will be to spread their portfolio to have more consumer focused offerings.  To date the extent of this tailor has been to offer different color devices as forks from their main enterprise Blackberries, though the Blackberry Flip is a nice start.

To sum up, RIM could be a contender in the fight for the consumer market.  They have a strong foundation to start from on the enterprise side and a bias towards connecting people that Apple is still figuring out.

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Innovation is an endurance race

Posted by admin on Mar 8, 2009 in Creating New Markets

Went with my family to the California Railroad Museum in Sacramento a few weekends ago.  If you haven’t gone, it is worth the trip. It’s an incredible collection with a knowledgeable and passionate staff, and a large toy train area for younger children.

Exploring the history and evolution of the railroad in California had several pertinent lessons on innovation. For instance, I learned a civil engineer, Theodore Judah, had the vision and audacity to suggest a transcontinental railroad.

Judah had the sense of mind to gather around him several wealthy financiers to help bring his dream to birth. Leland Stanford was one backer of Judah’s crazy dream. Though Judah died before the railroads met on 10 May 1869, his vision drove huge changes in the economic, social, and technical landscape of America.

“Gee John, that’s an interesting bit of trivia. But, what does this have to do with endurance? Come on, Judah died of yellow fever…”

In the early days of the railroad every local community and railroad company set their own standards of operation, including the track gauge cars rode on. This was incredibly important to the market and supply chain.

Typically cars from one gauge could not run on another gauge of track. [Gauge is the distance between the railroad track rails] This meant that as railroads expanded and eventually met other railroads, there was a good chance their gauge was incompatible. This required laborers to shift cargo from the cars on one railroad to another. It inserted delays in shipping, increased threat of theft and breakage, and required most rail transit to act like the first dot matrix printers – returning to the start before shipping something out.

Eventually, the cost of maintaining separate rail ecosystems exceeded the benefit. As a result there was tremendous consolidation in standards. A few standards emerged, but there were many losers. This resulted in huge losses by railroad builders but led to a tremendous growth in innovation resulting in a standardized, stable rail platform. We still use that platform today to ship most freight in the United States.

Winning the standardization race is a long term strategy for companies training for the innovation marathon. Firms that treat this as a sprint will not reach the finish line. The question to ask yourself is: based on your offering and the target market, what kind of race are you running, and are you training to win or just to finish.

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Death of everthing Telco? Nah, just squeezing another channel into our lives…

Posted by admin on Feb 12, 2009 in Uncategorized

There has been a bunch of buzz lately over the death of mobile telephony in the face of threats like Facebook and Twitter.   I’ll invoke the spirit of Mark Twain when I suggest that we look at the past introduction of new communication channels to see how history might rhyme.   My main thesis is that the introduction of new communication channels does not immediately spell the death of the previously dominante channel.   Few channels completely die, heck people are still use Morse code to communicate over Ham Radio channels.   Telegrams were only discontinued by Western Union in 2006, after over 100 years of offering the service. 

In each instance, the existing channels are squeezed as the current market of users experiment with the new channels to see if their current needs can be addressed better or if the new channel offers a difference experience.   Radio has not been replaced by television as a channel for all users.   There are situations and places where television is not as suitable as radio, such as the car or public transportation.   The internet has not replaced TV entirely as not all the content is available.

This leads me to a distinction between the media and the channel.  This is important for any communications company as they see to surf the chaos that is persistent in the market, today’s waves are just larger than they have been in a while.  The media/experience being consumed is impacted by the channel but there is a core identity of the media that persists across channels.  Take text messages.   People have been sending short messages for centuries, though each channel has had its own peculiarities such as the end of message flag arrrangement in semaphore or the ubiquitous “STOP” in telegrams.  How Twitter changes the media is the ability now to broadcast short messages to large targeted audiences.   The channels used include SMS, mobile apps, and Twitter’s webpage. Â The media is the same across these channels.

So willTwitter kill mobile phones?  No.  It may squeeze down how we use our mobiles to communicate with larger groups but the telcos are far from dead.

What will kill the telcos in my opinion?   A lack of innovating new media that leverages their unique channel in a sticky way.   What is unique about a mobile experience that cannot be easily carried over to netbooks and notebooks?  As all the networks trend towards an IP architecture, there will be no more distinction between voice, SMS, or other datatypes being passed on the network.  Since the channels lose their inherent disruption defense of incompatible standards, then the only way for the telcos to compete is to offer new experiences that are pertinent only to their usage context.  Much the way that Western Union started off with telegrams and eventually leveraged their channel to become the most well known way to send currency worldwide is a good example of how to leverage your channel and context to create new experiences and business on top of a strong foundation.

Let’s see if the global telcos can innovate in time…

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