Paul Wallbank – Brilliant Communications

Category: Innovation

  • Kickstarter and ownership

    Kickstarter and ownership

    The purchase of virtual reality headset designer Oculus by Facebook has raised some interesting questions about crowdfunding sites.

    As the Wall Street Journal reports, many of those who contributed to the Kickstarter campaign that Oculus ran now feel betrayed by the company selling out to the social media giant.

    Founder Palmer Luckey explained the companies sale to the WSJ as a quest for more funds; “a lot of people don’t understand how much money it takes to build things — especially to build hardware.”

    Crowdfunding is tough

    That ties into what founders have told Decoding the New Economy about crowdfunding startups; it’s tough and it easy to underestimate the capital required to launch a project.

    Ninja Blocks’ Daniel Friedman told Decoding the New Economy last February that the main thing the company had learned from its successful Kickstarter campaign is that crowdfunding is a good way to raise funds for specific projects but a lousy way to fund a business.

    Moore’s Cloud wasn’t as successful as Ninja Blocks and in his Decoding the New Economy interview, founder Mark Pesce described how he’d “rather eat bullets” than crowdfund a hardware startup again.

    Startups are always hard, but it’s difficult not see how the high moral purpose often citing from Kickstarter project founders clashes with the ruthless moneymaking of Silicon Valley.

    Discrediting crowdfunding

    The criticism of Oculus also illustrates how crowdfunding lies between traditional investment and sales; those contributing to crowdfunding projects are true believers, not just customers and certainly not investors in a legal sense.

    In recent times Kickstarter has been discouraging hardware startups from using their service; mainly because of the high risk of failure and disaffected contributors. The unhappiness with Oculus vindicates that move.

    Oculus’ sale to Facebook may make many Kickstarter contributors doubly wary of Silicon Valley style startups trying to raise funds through crowdsourcing campaigns.

    Lords of the Digital Manor

    Looking at Oculus’ move, it’s hard not to conclude we’re seeing another cynical version of the Lords of the Digital Manor business model where enthusiasts are exploited by entrepreneurs looking for the big Silicon Valley pay off.

    For Kickstarter and the other crowdfunding platforms, this is a problem as cynicism about the motives of those posting projects is probably a greater risk than the fear of being ripped off.

    It may well be that Oculus marks a big change in the types of projects that get successfully funded, certainly the next hot hardware startup that tries crowdfunding is going to find things much harder.

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  • Apple’s long game

    Apple’s long game

    It’s always risky to make predictions about Apple, particularly when they are silly. The company plays a long game and isn’t known for panicked releases of me-too products.

    Time is ticking for Apple to announce an iWatch, say analysts is a good example of a silly prediction about Apple’s future products and something that’s quite rightly criticised by Daring Fireball’s John Gruber.

    As I’ve pointed out before, the watch market is tiny compared to the smartphone with the entire global wristwatch industry’s sales making up only one-seventh of Apple’s iPhone sales.

    Part of the problem with stories like CNBC’s is the tech media’s focus on consumer goods, particularly in the internet of things and wearable technology markets.

    Analysts like those quoted in CNBC’s story fall for this fallacy and overlook that the IoT market profits are going to come from the backend, B2B applications of the technologies.

    With Apple we’re already seeing this with iBeacon being deployed in sports stadiums and shopping centres – Apple’s recent partnership with United Airlines to provide inflight entertainment is another step towards locking up business deals.

    There’s no doubt those business deals will flow into the consumer market and an iWatch may well be part of Apple’s longer plan to lock customers into their products.

    However claiming Apple have 60 days to launch an iWatch is plain silly, particularly when you have a company with a track record of not being panicked into launching me-too products and playing the long game.

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  • An era of exponential innovation

    An era of exponential innovation

    “How do we move to an exponential approach to innovation” asks John Hagel, Director of Deloitte’s Centre for the Edge in the latest Decoding the New Economy video.

    The Centre For The Edge is Deloitte’s Silicon Valley based think tank that identifies and explores emerging opportunities related to big shifts that are not yet on the senior management agenda.

    John tells us how the cycles of change and innovation have varied over the last thirty years in the industry; “the biggest thing for me is that nothing is stabilising. I often go back into history and look at things like electricity, the steam engine and the telephone – all hugely disruptive to business practices.”

    “But the interesting pattern is they all had a burst of innovation and then a levelling off,” says John . “You could stabilise and figure out how to use all this technology.”

    “With digital technology there is no stabilisation.”

    That lack of stabilisation leads to what John has termed ‘exponential innovation‘ where he sees business and education being rapidly transformed as technology upends established practices and methods.

    Healthcare, financial services and “any industry that has a high degree of information content ” are the sectors currently facing the greatest challenges in John’s view.

    John sees the solution for businesses and managers in looking at the current era not as a time of technology innovation but of institutional innovation. That institutions, like companies, have to reinvent how they are organised.

    Reinventing well established companies or centuries old bureaucracies is a massive challenge, but if John Hagel’s view is right then that radical change to institutions is what is going to be needed to face a rapidly changing society.

    Bank image by Ben Earwicker, Garrison Photography of Boise, ID through sxc.hu

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  • Mortein and The Queen

    Mortein and The Queen

    A great little story from the Australian government’s research arm, the CSIRO, tells the story of how the Queen Elizabeth II lead the commercial insect repellent industry and how intellectual property has changed.

    The story tells how the original experiments were carried out in 1940 to see what substances were best in repelling mosquitos as part of the preparation for a tropical war against Japan.

    After the war, research continued and during the 1963 Royal Tour of Australia, the Queen was sprayed with the government repellant to keep flies off her while she played golf.

    Journalists following the Queen noted the absence of flies around the official party, and word about CSIRO’s new fly-repellent spread. A few days later representatives from the company making Mortein insecticides called Doug Waterhouse for his formula, which he passed on freely, as was CSIRO’s policy at the time and the rest, as they say, is history.

    It’s unthinkable today that any research organisation would give intellectual property away and a modern agreement would include hansom royalties for the formula.

    There’s an argument that giving away the intellectual property helped innovation and public health, but in these stingy and cash strapped days it’s hard to see how government scientific organisations could survive without royalty payments.

    It certainly is true that the past is a different country.

    Fly spray can courtesy of Wikipedia

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  • Driving out inefficiencies

    Driving out inefficiencies

    “We’re driving inefficiencies out of every single facet of life,” AT&T CEO Randall L. Stephenson told The World Economic Forum’s New Digital Context panel last month.

    The CEO panel at the Davos forum, which included Yahoo!’s Marissa Mayer, Salesforce’s Mac Benioff, Cisco’s John Chambers and Gavin Patterson of BT discussed how corporations of all sizes are being affected by rapid market changes.

    “All this bandwidth, all these connected devices, are as disruptive as anything this society has ever seen,” Stephenson said.

    “Companies that aren’t moving and driving the new technologies are companies that don’t stay alive.”

    Stephenson’s view was supported by Cisco CEO John Chambers, “if you look at big companies only a third of us will exist in a meaningful way in two decades.”

    Chambers cited Cisco’s experience from the past two decades to illustrate how business is rapidly changing, “my competitors from fifteen, twenty years ago – none of them exist or they’ve exited. From ten to fifteen years ago only one exists, from five to ten years ago only a few.”

    “If you don’t disrupt, you get left behind,” warned Chambers.

    Chambers’ advice to managers is that teams have to be empowered and encouraged to take risks and learn from failures, advice endorsed by Yahoo!’s Marissa Mayer.

    “The best thing you can an executive can do is play defense, not offense. Get out everybody out of the way and set up an evironment where they can really run and make a difference.”

    Yahoo!’s Marissa Mayer endorsed the change, describing a much flatter organization; “we try and run things really flat, really transparent.”

    That flat organisation is really the biggest risk to many executives in staid, safe organisations; it means fewer middle managers as the workplace is increasingly automated.

    As businesses adopt new technologies, the need for Executive Vice Presidents or Group General Managers is eliminated – along with the armies of assistants and underlings required to help these folk in their roles.

    In the past, those layers of management have isolated senior executives from their customers which Salesforce’s Marc Benioff is a luxury companies can’t afford in the current marketplace, “everything is going faster, companies have to change faster.”

    “Today if you’re not listening to your customers more deeply than ever before and not reacting to them more rapidly than every before,then you are probably making a mistake,” warns Benioff.

    Most of those in the room at WEF were the world’s top executives and government officials, how many of them take note of how business is changing will become clear in the very near future.

    There’s also a warning for those government leaders on how employment and government services are going change in the near future which a lesson that needs to be heeded as policies are developed.

    Now’s the time for every manager, business owner or executive to look at the inefficiencies in their workplace and whether it can be eliminated either through technology or business restructuring. It may well save you from being identified as an inefficiency yourself.

    Steam train image courtesy of Gabriel77 through sxc.hu

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