Tidal Waves create Innovation

In my last blog I talked about innovation. Which got me thinking again. I apologize that I again will reference Microsoft, but as it is my heritage and a relevant point of reference I shall go there again.  When we look at the big misses at Microsoft over the last decade it’s easy to say they got clocked by Apple and the iPhone. That they missed on the tablet.  But as I alluded to innovation is not often in the product unless you are there first.  Ballmer said his biggest regret was Vista. But in my humble opinion the bigger miss was not understanding a technology movement that was under way and envisioning how big the possibilities could be.   More than anything it was the inability to truly understand mobility that killed Microsoft,. In short they never did think big enough.

In any big shift there is a movement that occurs and then there are the innovators who take advantage of the movement.  In the early phases of the PC industry, the movement was the idea of a personal computer.  There where may companies who innovated based on this movement.  Intel created the microprocessor that powered the PC.  Microsoft jumped on the operating system with DOS and then Windows.  More than any company Microsoft understood the value of the software that created the experience for the PC.  Give Intuit credit for changing how we did our taxes. There where hardware manufacturers that popped up all over the place, like Gateway, Dell and Compaq.  There was a lot going on in the space and the competition was brutal.  It created a lot of wealth and a very affluent younger generation, who profited on this tidal wave.

These grand movements would continue with the birth (or maybe re-birth) of the internet.  As companies moved in force to get online and establish a presence in a global virtual real estate play with the creation of a website.  This again would drive innovators to start creating new opportunities along with new business models.  A second movement that coincided with the internet was the rise of mobility.  More accurately mobility was about freedom.  The ability to have access to our technology but not be connected to a wall.  Underlying all this was digital convergence as everything we had known from our music tour television and film, books, catalogs etc….  was being digitized.  I could access all this content from my PC, laptop or smartphone.  A new are is the cloud, which  in my opinion is not a new tidal wave, but more innovation built on the back of the internet.  All in all, these movements have fundamentally changed how we all lived and worked.

The list of examples of companies who rode these grand movements to success is a list of small companies who have become tech giants, with the exception of Apple, which made a grand comeback.  In the internet Google, Facebook, Twitter, Amazon, Netflix etc.. are but a few examples of companies that leveraged this new medium.  In many instance mobility created an expanded market and new opportunities.  In the case of Twitter it helped them become a global beacon of democracy and human rights.  Mobility projected Google and Apple to new heights as they drove new devices to new sales models.  For Google they used Android (and iOS) to extend the reach of their search engine.  There were companies that burned brightly only to fade, i.e. RIM and Nokia

If I look around the industry and try to predict the next industry movement, my eyes and ears always gaze to robotics.  There is a lot of work being done today that is far more advanced than anything we have seen before and in some cases hearkens to our favorite science fiction novels, film and television series.  If you take Google’s foray into robotic vehicles, it is visionary while making sense.  If you have a robotic car and you need to go somewhere, what is the first thing you will need to do? You will need to give it directions, “Bing” (not intended use of Bing but funny in any case), who makes great mapping technology?  More importantly it takes the most dangerous piece of driving out the equation, humans.  This is but one example of something that will come to pass.  Prosthetic’s will move from plastics and metals to having intelligence and a more human like appearance.  Anyone remember Steve Austin, aka the Six Million Dollar Man? I think robotics will combine all three of the previous tidal waves while creating a new one that removes humans from a number of traditional equations.  These movements do not happen without consequences.  It will be interesting as robotics evolves to see how it will impact the movement of labor.  If a robot is picking our apples will we have need of cheap labor?  Robotics will take off and have a bigger impact than mobility or the internet, as it is physical in nature, not virtual.

The excitement and disaster of these “big” movements is they are like tidal waves.  If you catch the wave early on you can ride the wave to extreme success.  However if you are late the wave you risk catching it as it crests and comes thundering down on you.  For the start-up these sometimes seem obvious as many gamble on the next big thing. Youth Is rampant in this area and like so many young generations they are more idealistic and dream of a bigger and brighter world, ignorant of the consequences, but driven none the less. For the incumbents that challenge is often much more daunting.  They may have been part of an earlier movement that still drives big revenues but makes them blind to the future, until they find themselves on the crest of the wave, looking down in horror at what has befallen them.

These changes are what makes the world today so exciting as when these “tidal waves” occur it has a material and social impact across the globe.  If you think about how internet has brought us all closer together and made communications across boards easier than they ever have been through out the history of mankind.  When these changes occur, for companies in the tech space and across other industries it is important to bet early and often, if one is to survive.  They come very fast and with great velocity, that those who do not anticipate quickly, they become a legacy to history, they become yesterday’s news.

Good Night and Good Luck

Hans Henrik Hoffmann October 24, 2013

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Innovators Dilemma

I was watching Microsoft COO Kevin Turner speak about all the innovation Microsoft has coming out this year, Office 365, Skype, Visual Studio, XBox One, Surface Tablets, Windows Phone, Bing etc ..In reality, in saying it, he was confusing products with innovation, but who knows maybe Bing, Skype, Office 365, Surface Tablets, Windows Phone etc’.have some features in them that will be considered innovative.  In KT’s defense and the one exception may be Xbox one, which has done in the past innovative things, like Kinect. But maybe  this goes to my post a couple of weeks ago on Apple (Apple is Dull).  In the Apple 5s and 5c we have cool devices.  Are they innovative? Short answer: No.  Are they successful? They sold over 9 million devices in a weekend.  Short answer is innovation does not equal success. My fundamental question would be, “What is innovation?”  What does it take to push the bar higher.    Here are some of my thoughts on this most important subject.

If history has taught us anything it is that the greatest innovations often do not mean success.  It does not mean that those who innovated were failures.  In many instances they are legends.  But often it takes others to fulfill their greatness.  As much as Steve Jobs loved to rail against Microsoft’s inability to innovate he nor Woz had much to do with the GUI that made the Macintosh breakthrough technology..  That work was done over at Xerox Parc labs.  As written in Jobs biography (I highly recommend), it was during a visit that this piece of innovation caught his attention and imagination.  As much as one person fought against selling this technology to Apple, Steve prevailed and the rest is history.    Where Apple did innovate was popular devices such as the iPod, iPhone and iPad.  Were they the first in any of these categories? No.  They just created a user experience that was fundamentally better and then created an ecosystem around those devices in iTunes and applications.

When I think of what Kevin mentioned, though the products may be improvements, in fact they may even be significant improvements, but are they transformative?  Do they fundamentally alter and improve the experience that I had before?  I guess it is time we make the ground rules for what can be considered innovation and what cannot.    From a corporate America standpoint rule number one is you have to be able to monetize your innovation.  Apple did not invent the smartphone, but they certainly took the idea and created a transformative experience for all to experience.  Anybody who tried to browse the web on a smartphone prior to the release of the iPhone had a very painful experience.  It was slow. No one had really figured out the user interface and how to display it properly on the phone (this is where Apple controlling the end to end experience really paid off).  We can go further back in time to Microsoft and the release of Windows 95.  WIndows 95 was innovative not so much in technology but in price as it created an affordable PC experience that was on par with the superior MacIntosh.  It’s important that innovation extend to the masses.   Shortly after it was followed by the web browser, Netscape Navigator.  This launched the World Wide Web into hundreds of millions of homes.  The creation of the web belongs to Tim Berners Lee, but the mass consumption belongs to Marc Andreesen.  No one really knew how to monetize it until Google came along with search and search advertising.

There are bigger innovations on the horizon in the pipeline extending from robotics to travel to alternative energy.  Areas that will have a significant impact on our economies and in how we live our day-to-day lives.  The innovations coming down the pipe will come at a pace faster than anytime in human history (not sure when the future ever really slows down).  The only limits on consumption of these innovations will be the human factor.  Though what we create will improve significantly in a relatively short amount if time, we as humans have not changed a whole lot in the past two thousand years.  Physically the advent of robotics may change us (think Six Million man), certainly the human genome project has extended our knowledge of how  we as humans are constructed and work.  If I can ravel from Seattle to Sydney in under 2 hours would that be transformative?  It would shrink eth world in a heartbeat.

Mot importantly true innovation in the tech sector transforms society in ways yet to be imagined.  Many times they happen organically, like Facebook    Originally designed for students at Harvard University, it spawned a new way of interacting between people.  More than any company it created the concept of social media.  As mentioned earlier Xbox Kinect transformed the gaming experience.  Twitter pushed social media higher as it became an outlet and voice in the world for Political change in places like Tunisia, Egypt and Libya.  It will be exciting to see how the next generation of innovation changes society.  For all the debate around Obamacare, and for those who believe free markets will solve everything, I can only add that in my view neither your government or your private insurance companies can solve these issues.  However I do believe that technology has the ability to create something innovative that will help with self healthcare can offer us a, dare I say, bipartisan way out.  One of the biggest costs in healthcare is unnecessary emergency room visits.  What if I had a device that could help tell me when I need emergency care and place the call for me?

Innovation is a big challenge and opportunity for companies.  It requires bright minds with a different way of thinking about specific problems.  Taking the less walked path to new discovery.  Every company struggles with it, knowing that if they do not innovate and seize the opportunity before them they could be histories next lesson.  In today’s world you see old technologies being thought of in new and different ways.  A company called Nest Labs is rethinking the thermostat and smoke detector.  Appliances that have not changed a whole lot in the last fifty years.  What next?  The refrigerator?  What would that mean to GE?  This is an exciting time in history as technology once confined to the PC is exploding into new territories with a high degree of regularity.  Unlike my title it maybe Is not so much a innovators dilemma, but a innovators death threat for those who do not participate.

Good Night and Good Luck

Hans Henrik Hoffmann October 9, 2013

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America

It is one of those weeks on capitol hill where everyone either has an opinion or is trying to understand what the hell is going on:  the Affordable Health Care Act, a government shutdown, the debt ceiling etc..Anger becomes the dominant emotion as the need for media and the blame game accelerates among our representatives and the media themselves.  I guess in a time where it seems everyone is a cynic and no one is a prophet it may be time to look at what America has accomplished and why globally we still are the beacon of hope, the beacon of freedom. Despite the fact that so many today in this country no longer seem to believe it.  But if you stop to look around and see the rich makeup of this country, its people, its land you will find something special, something beautiful.  Sometimes it is simple, sometimes it is grand.  But in the end it is always America,

When the founding fathers set out on this journey they aspired to something great.  To create a land not of tyranny but self-determination. To allow citizens the right to select their government and to vote their representatives out if they felt they were not doing the work of the people. Even early on there were doubts on what this form of government would mean and if it ould work.  Alexander Hamilton favored a system more reminiscent of Great Britain.  His nemesis Thomas Jefferson did not subscribe to this idea and perhaps luckily, neither did his star pupil James Madison, who wrote our constitution.  George Washington decided two terms was enough, they said he could have been King, but he declined and set a tone for this country that would go unchallenged until the arrival of FDR in the White House. Some two hundred and thirty-seven years later this idea of democracy lives on in American hearts and souls.

As dark as some may find the current times we have lived through far darker.  The Civil War is front and center the worst and darkest time in American history as we fought against one another.  It would have a lasting legacy as it led to the creation of Jim Crowe laws and the Civil RIghts movement, a very ugly episode in American history, that showed a country not championing human rights to its own citizens.  We lived through the Great Depression and prospered.  We lived through the Cold War and prospered.  We lived through 9/11 and prospered.  We have lived through the global financial meltdown and prosper again.  Despite our short comings or what befalls us we are a resilient nation and no matter what divides us or hurts us, we always have come through better in the end.  Sometimes even unified.

Many cynics argue due to either big government or little government that we are losing our ability to advance the nation. Despite all  these cynical  episodes America has continued to advance and create industry and economic opportunity for those willing to take chances and view a different and greater world.   Much of this goes back to America’s own sence of discovery.  How we expanded and explored (and yes, exploited) our own nation as we grew and moved west.  We had an innate sense of discovery.  The oil industry began here in the US, not the Middle East. When science and entrepreneurship discovered oil in Pennsylvania and a way to refine it, they stopped having to  kill so many Sperm Whales, which were the primary source of oils for lights at the time.  We created the world’s automotive mecca in Detroit thanks to Henry Ford.  We became the epicenter of global finances.  Kitty Hawk and the Wright brothers and the birth of flight  We took the world atomic.  Thomas Edison was American.  Too modern times and the development of the world of technology from the microprocessor to Microsoft, Apple, Google, Facebook etc..Gate, Jobs, Zuckerberg etc..all born and educated in the United States.  Our heritage of innovation continues to live in and grow grander.

Moving forward despite people screaming about government intrusion we still continue to retain the spirit of the wild west and invest heavily in the next big idea.  There is still a lot of venture capital to be found.  Big corporations from Coca-Cola to AT&T to IBM to Exxon continue to thrive and profit in the field of dreams.  Google is only 15 years old and generates over 40 billion in revenues.  Microsoft generates over 70 billion yet after only 38 years is in decline as the next big wave of opportunity approaches.  As much as people suggest that emerging markets may replace the US and its streak of innovative ideas, We are still waiting for it to happen.  In the meantime it continues to happen here.  In our universities, in our schools.  Our economy sets the standard for the rest of the world to follow.

We also have the benefit of living in one of the most spacious and beautiful lands in the world.  Thanks to visionaries like President Theodore Roosevelt and John Muir we have the National Parks system (yes I know it is currently closed).    The Grand Teton’s, Yellowstone, Mount Rushmore, The Grand Canyon, Glacier Park, Badlands, Crater Lake etc..those are just the some of the many magnificent National Parks.  Then you have fifty states with their own parks system many very beautiful in their own right.  Not to mention cities both large and small living with serene surroundings.  Whether it be the backdrop of  Olympic Mountains, nestled softly against the Puget Sound glistening against Seattle or the Statue of Liberty standing tall before the New York City skyline.  There is indeed much to be in wonder and awe of in this great land

Probably one of the best things anyone can do in their lifetime in America is just get in a car and drive through the country and see the various landscapes and bodies of water.  See the people who make up this country, it is not just white nor should we ever want it to be.  It is diverse and ever-changing.  As you cross the country you will experience different cultures and different foods.  The Creole and Cajun influences of Louisiana.  The sea foods of the Atlantic to the different and unique sea foods of the Pacific.  The Caribbean influences in Florida.  To our european heritages in cities like New York and Chicago.  As you travel east to west you go from colonial to more modern architecture.  Ascend the sleeping beauty of the Appalachians.  You will cross the Mississippi, see the Arch of St Louis.  Make your way through the Great Plains and up and over the Rocky Mountains, to the shining coast of California and the Pacific.  Whether you want the hustle and bustle of the big city or the quiet get away to compose your thoughts, this country has something for everyone.

We have grown from a small boat of Quakers to a country with over 300 million people.  Despite this enormous growth none of the above has diminished what we have to be thankful for.  Our corporate kings continue to be our wealthy.  Our representatives continue to diversify and represent the entire population.  We continue to exert our freedom of speech at the top of our lungs, to whomever will listen.  The government may be shut down but the American spirit will always live on.  I am not pessimistic over where we are today nor where we will be tomorrow.  I am optimistic in this countries resilience, it’s ability to absorb change and move forward.  Yes the government may not be working today but it will comeback and we the citizens will adapt and move on in our journey forward.  Sometimes things just need to be said,  If we believe in doom and gloom we risk becoming in it.  Sometimes all it takes is to wake up and simply enjoy the sunrise over America,

Good Night and Good Luck

Hans Henrik Hoffmann October 4, 2013

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