Hans Hoffmann's Blog

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

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

It did not seem that long ago that the major fears at Microsoft were the existing and looming dominance of two foreign companies: the Finnish mobile giant Nokia and the ultimate business device, the Blackberry from the Canadian wizards at Research in Motion(RIM).  But the industry has a funny way of misleading you down the wrong path. Time and time again you fear a competitor or a group of competitors, only to discover you were not watching your back and have someone else fly by in the night and destroy everything in its path.  In this case Microsoft focused on Nokia and RIM only to be destroyed by Apple and Google.  But in their day these two companies seemed to be on top of the mountain and it would be very difficult to defeat and knock RIM and Nokia off that mountain.  They were the companies everyone envied.  But fate was cruel and today we see two companies about to disappear.

RIM was a lot like Apple is today.  Their famous Blackberry was often called “crackberry” due to the addictive behavior it caused in its user base.  People roaming the streets, typing away on their little Blackberry keypad, anxiously awaiting a response.  They became the standard in corporate America.  Originally an email device it would evolve to be a smartphone.  Early on at Microsoft a lot of employees carried them. That was until Microsoft launched its own Windows-based phone with partners, primarily HTC.  Then RIM was the company that Microsoft wanted to defeat. Originally Nokia was not on the radar, it was all about the smart phone and taking down Blackberry.  Presentations to perspective clients and carriers usually centered around, “Is this a Blackberry killer?”  RIM had done some innovative things.  The thumb wheel on the device was particularly addictive.  It allowed you to navigate fast.  The tiny keyboard seemed to be a hit.  If Microsoft could defeat RIM then it could go after a larger pie that was owned by Nokia, it was the classic Microsoft playbook.  Go after number two and then set your sights on number one. RIM, however, would prove very resilient in this pursuit.  Microsoft had to fight and claw for every percentage point gained in market share.  Slowly Microsoft seemed to be gaining momentum, but RIM users were hard to convert.

Nokia was a different animal, where RIM appealed to corporate America, Nokia appealed to the world of mobile consumers.  When mobile technology and the cellular phone world became real, Nokia was really the first to grasp it and what the possibilities were with these devices which had interfaces.  They were pioneers in the world of SMS (texting). They were also the ones to have accessories for their phones.  All of a sudden you would be walking around the mall and people would be holding colorful designs to their ear.  The old dove bar phones would sell 80 million in a single year.  Nokia in comparison to RIM was a true giant.  The company was not merely participating in the industry it was defining it.  However they made mistakes along the way. Nokia lost America early, when the public was asking for a clam shell device, Nokia said no as it thought it knew better.  It would still be powerful for years. Despite its US setback it was strong in the rest of the world and it bet early on markets like China and India.  It pursued more or less a dual strategy of low-end phones and high-end smart phones, all using the Symbian OS.    The OS would come back to haunt it.

Sometimes Tsunami’s happen and when Apple released the iPhone it laid waste to the competition.  In its wake lay RIM, Nokia and yes…Microsoft.  Only Google seemed to grasp the change that was happening in society.  It seemed in Nokia;s case and RIM’s case they spent the next few years in denial.  They believed they had good products and a good road map, when in reality they had none.  A large part of the problem was  in senior leadership where they seemed to not be willing to jump and make the big change.  When you have a cash cow it seems hard for some companies to realize the cow is being slaughtered. Nokia tried to correct the ship when Microsoft exec Stephen Elop took over as CEO.  He quickly penned “The Burning Platform” memo, which in short said Symbian sucks and we need to try something different.  Enter Windows Phone.  Nokia was late in making the change and Microsoft was late in delivering the Windows phone. Nokia continued to bleed cash for several more years.  RIM, on the other hand, just never seemed to realize what was happening.  Worse, they did not seem to know what to do.  By the time they came out with a competitive smartphone it seemed they were hoping that their loyal “crackberry” users would resurrect them. Problem was that loyal base had all turned to meth.

Now they are both gone.  The device business of Nokia purchased by Microsoft, while RIM was acquired by a Canadian holding company and being taken private.  This has all happened in a matter of weeks.  Two of the biggest names in mobile history about to become a permanent part of history.  It all comes back to one of my favorite quotes from former Microsoft GM Bill Baker, “The future comes slowly, change happens quickly”.  Predicting the future is not that difficult, but timing it..now that is the challenge.  In this industry you need to think big or risk becoming small.  Jobs set a high bar when the iPhone was being developed and when it came out even Bill Gates said, “….we did not set the bar high enough”.  When you miss the boat and are not taking risks to catch up, the end become inevitable.  Such was the case for both RIM and Nokia.  They will go down as legends of a bygone era.  There leaders left to ponder for the rest of their days, “how did we get it so wrong”?

Good Nigh and Good Luck

Hans Henrik Hoffmann September 24, 2013

Do not get me wrong I love my iPhone and think that what Apple has done over the years to be truly amazing.  They are one of the great comeback stories in business and specifically technology history.  However driving to work and listening to the DJ’s on the radio, talking about  the release of the iPhone 5s, they were talking about how antiquated the iPhone and iPad were starting to look.  As much as I wanted to disagree I could not, Apple products are starting to look middle aged.   It is hard to believe but it is six years since the launch of the iPhone. Apple was huge and very sexy.  It seemed like they did not age, but only got younger.  But in the end time draws lines on all our faces.  Apple is getting kind of dull.

Apple had a tremendous run of success after the return of Steve Jobs.  It is a long list: Macs with Color, iPod, iTunes, iPhone, iPad, the Apple Stores – not to mention the ecosystems it created for app developers and the innovation of touch screen (they were not the first but they did it better).  In baseball terms they were a power hitter.  Hitting the ball out of the park with consistency.  More than any company they seemed to understand how technology could influence the consumer and fundamentally change their buying behavior.  Probably more than any company on earth Apple has fundamentally changed how people work and interact with one another over the past 15 years.

When we look at what has come out of the latest release we see larger screen sizes for the device.  We see new colors, like gold.  We see thinner devices.  We see new apps.  All good stuff, but also stuff that the competition is already trying to do and do better. The competition is fierce.  Out front you have Google and Samsung.  It would also be foolish to dismiss Microsoft with its hoards of cash.  Do not expect Microsoft to be RIM anytime soon.  These latest features are nice and simple enhancements, it is not really innovation.  They are improving on what already exists.  Like almost every successful consumer product, from the refrigerator to Lego blocks.

Icons are a part of the tech industry.   The industry moves so fast and those people who create new landscapes literally an impact hundreds of millions if not billions. Case in point; Facebook has over 1 billion users.  By default Mark Zuckerberg’s name will be etched into the history  of the industry.  In Apple’s case they may have had the biggest legend of all in Steve Jobs  For those who read Walter Isaacson’s biography of Steve Jobs (if you have not click here),, it tells a story of a very obsessively passionate man.  His attention to every detail in what he did from what we know of him, to his bizarre diet habits. to his relationships can be translated into the success he created.  When you lose someone like that, despite his efforts of a succession plan in Tim Cook, something massive is lost that cannot be replaced.

One thing Apple has in its favor is the immense loyalty of its user base, it has always had that.  A pretty compelling argument can be made that loyal base is what kept Apple alive during the era of no Steve Jobs (that and a rather large investment by Microsoft).  Apple has managed through it’s current run of success to seemingly expand that base.  That being said I would be hard pressed to say if you have 100 million users that more than 20% are that fanatically loyal.  A great thing to have but a small piece of what is now a much larger pie.

I see a few things happening on the horizon that will either sink or allow Apple to swim.  I think cost effective design will be increasingly important to differentiate devices, yes it is nice to have a killer app, but those are ported to other platform pretty easily.  This is usually done out of necessity and not loyalty.  Apple still has Johnny Ive (the man at Apple when it comes to design) and he may yet have a few home runs left in him.  The second and bigger challenge is creating new market opportunities.  Apple created and profited from digital music and they did the same for the smartphone and tablet.  The next area seems to be the television and though Apple has its Apple TV product it has yet to make a significant breakthrough in this area.  Not to mention the word is out and the Cable providers are not going to be willing to let their industry go the way of Apple (or Google)

When you create a mass market, like Apple has done it creates a awesome opportunity and one that Apple is still managing to grow globally.  But when everyone has one it is not that cool or exciting anymore and people eventually look for something to differentiate themselves.  Tim Cook could grow the business immensely and in the end be perceived like Steve Ballmer.  A sharp businessman but not a visionary. I don’t envy Apple, yes they have changed lives, in fact they have added to history.  But to come up with new innovations every three to four years that have a significant cultural and social impact is no simple task.  Especially when the man who drove so many of those changes is no longer alive   What we are left with today is more or less the status quo.  Events, New features, product launches, etc..It is tried and true and rather boring.  Apple is going to continue to expand as there are still many untapped markets, but that is just business as usual for many companies and just results in another stale MBA program lecture.  It is hard to stay sexy especially as you hit middle age.  For every George Clooney there are at least a hundred George Wendt’s.  What was once a sharp blade is now becoming dull as time and use catches up with it.  Can Apple reclaim it’s glory?  Only time will tell but as of now I am rather bored.

Good Night and Good Luck

Han sHenrik Hoffmann September 18, 2013