Innovation | Paul Wallbank - Communications Professional

Can the Internet of Things survive a tumble?

Can the Internet of Things survive a fall into the trough of disillusionment?

That the Internet of Things is posed to fall into the depths of the trough of disillusionment according to Gartner’s latest Hype Cycle should come as no surprise to those following the industry.

For the industry, such a fall might not be a bad thing. During the upswing to the Peak of Heightened Expectations technologies attract the hot, dumb money along with the motley collection of shysters and opportunists a gold rush always lured in by the prospect of easy returns.

When a product, technology or industry falls into what Gartner calls the trough of disillusionment it’s usually the time when its real value is discovered. Without the distractions of hype or dumb money distorting the market, the industry finds a way of using a product that’s become somewhat passe.

For the Internet of Things, it won’t be a bad thing if the sector tumbles into the abyss. The sooner it happens, the faster industry will figure out where the real value and benefits lie.

The only damage might be to some of the more prominent boosters’ egos and the hip pockets of some of the more over eager investors.

Electrocuting elephants – the cost of competing standards

We’re bad at setting standards but we have moved on from electrocuting elephants

A constant theme when new technologies appear is the inevitable war about standards that often sees bitter arguments over how the new methods should be used.

Over the centuries we’ve seen fights over railway gauges, video tape formats and even the shape of lighting conductors.

The struggle over lightning rods between the English and French camps in the eighteenth century was parodied by Jonathan Swift in Gulliver’s Travels where the two tribes fought over which end of a boiled egg should be broken.

Probably the nastiest dispute in modern times was the battle over DC and AC electricity transmission between Thomas Edison and George Westinghouse, a fight made worse by Edison’s former employee Nikola Tesla taking his patents over to Westinghouse.

The fight became so fierce that Edison actually electrocuted an elephant to illustrate how dangerous AC electricity would be to householders.

Tesla and Westinghouse eventually won the argument, but it came at a cost to Topsy the Elephant.

While we may draw the line at electrocuting elephants in these enlightened days, we aren’t much better at settling standards. That’s why it’s fascinating watching how technologies like the smart car and the connected home will evolve.

Spreading the good news – Canva’s Guy Kawasaki

The tools for building new businesses have never been more accessible says Canva’s Chief Evangelist Guy Kawasaki

“My job is to spread good news,” says Guy Kawasaki of his role as Canva’s Chief Evangelist.

Kawasaki was speaking to Decoding the New Economy about his role in popularising the online design tool which he sees as democratising force in the same way that Apple was to computers and Google to search.

Democratisation is a theme consistently raised by startups and businesses disrupting existing industries and Kawasaki continues this theme.

“The world is becoming a meritocracy; it’s not about your pedigree, it’s about your competence,” states Kawasaki.

Falling barriers to entry

What excites Kawasaki about the present business climate are the falling barriers to starting a venture. “Things are getting cheaper and cheaper, in technology you had to buy a room full of servers, have IT staff in multiple cities. Today you call Amazon or Rackspace and host it in the sky.”

“Before you had to buy advertising for a concert, now if you’re adept at using social media – with Google Plus, Facebook,Twitter, Pinterest and Instagram – you have a marketing platform that fast, ubiquitous and cheap.”

“What excites me is there are going to be more technologies, more products and more services because the barriers are so low.”

Creating a valued and viable product

For those businesses starting into this new environment, Kawasaki believes the most important thing a startup should focus on is getting a prototype to market; “at that point you will know you’re truly onto something.”

“If you build a prototype that works you may never have to write a business plan,” says Kawasaki. “You’d never have to make a Powerpoint, you may never have to raise money as you could probably bootstrap.”

Kawasaki view is the MVP – Minimum Viable Product – model of lean product development should have another two ‘V’s added for ‘Valuable’ and “Validated’.

“You can create a product that’s viable, ie you could make money, but is it valuable in that it changes the world?”

“Is your first product going to validate your vision? If it’s not then why are doing it?”

The story Kawasaki tells is the tools to deliver valued and viable products are more accessible than ever before; that’s good news for entrepreneurs and consumers but bad for stodgy incumbents.

Jumping the queue

Reservation Hop illustrates all that is wrong with the current startup culture

Reservation Hop is a good example of many of the current breed of parasitic startups that want to create a new class of middleman.

The hospitality industry is tough work and something guaranteed to irritate restauranteurs are reservations that don’t show up.

One startup that seems almost certain to attract the ire of the restaurant industry is Reservation Hop – “We make reservations at the hottest restaurants in advance so you don’t have to.”

Reservation Hop makes table reservations at popular restaurants and then sells them through their website.

We book up restaurant reservations in advance. We only book prime-time restaurant reservations at the hottest local establishments, and we mostly list high-demand restaurants that are booked up on other platforms.

This is probably one of the worst examples of the middleman culture that dominates much of the current startup thinking.

Almost certainly there’s a market need for proxy queue jumpers – although one wonders how profitable it is when the transaction fees are under $10 – but this service will deeply irritate restaurant owners and diners who are crowded out by these ‘parasite’ services.

In many ways, Reservation Hop illustrates the problems with this phase of our current startup mania; the rise opportunistic businesses that are more akin to parasites than services that add value.

The Reservation Hop website assures patrons that there’s a 99% chance their booking will be honored by the restaurant on the night, we can expect establishments to start messing with that statistic as they wise up to the business.

Many in the startup sector speak about how new technology improves the world, services like Reservation hop illustrate that not every idea is a step forward.

Demoting the newspaper

Newsagents are adapting to a digital world which is seeing every industry being disrupted

You know a product has problems when retailers start start moving it out of key retail positions. When the product was the retailers’ core business, you know the entire industry is in serious trouble.

Mark Fletcher describes in the Newsagency Blog how he’s moved his city’s number two selling paper off the main level of his newspaper display.

“Sales are not paying for the space,” Mark says bluntly.

Newsagents relegating newspaper fits nicely into Ross Dawson’s Newspaper Extinction Timeline, in the case of Mark Fletcher’s newsagency Dawson sees the Australian newspaper industry vanishing by 2022.

For newsagents the signals have been clear for some time that they have to adapt to a society where paper based products – newspapers, stationery and greeting cards – aren’t in demand.

The process of adapting isn’t easy or smooth – many experiments will fail and even the smartest business people will make expensive mistakes. That’s the nature of evolution.

Newsagents though are just one example of changing marketplaces, there’s few industries that aren’t being disrupted by the technology and economic changes of our times. All of us are going to have to adapt to a rapidly changing world.

The rise of the business digital native

Today’s new businesses are the true digital natives.

‘Digital natives’ has been the term to describe people born after 1990 who’ve had computers throughout their entire lives.

The theory is these folk have an innate understanding of digital technologies from being immersed in them from an early age.

It’s doubful how true that theory is; the generation born after 1960 were born into the television generation yet the vast majority of GenXers would have little idea on how to produce a sitcom or fix a TV set and the same could be said for the war generation and motor cars.

Digitally native businesses

For businesses, it may be the digital native concept is far more valid. Ventures being founded today are far more likely to be using productivity enhancing tools like social media, collaboration platforms and cloud computing services than their older competitors.

What’s striking about older businesses, particularly in the Small to Medium Enterprise (SME) sectors, is just how poorly they have adopted technology. The Australian Bureau of Statistics report into IT use by the nation’s businesses illustrates the sectors’ weak use of tech.

The most telling statistic is the number of businesses with a web presence; the SME sector lags way behind the corporate sector that has almost 100% penetration.

Many of the zero to four business can be disregarded as most of them are sole trader consultants who’ve had to register a businesses for professional reason, although there is an argument even they would benefit from a cheap or free web presence to advertise their skills.

The ABS statistics show small business is lagging behind the corporates in social media and e-commerce adoption as well so the argument that local businesses are ignoring the web and using services like Facebook, LinkedIn or Google Places to advertise their services doesn’t hold water.

Old man’s business

Part of this reluctance to use digital tools is age; many SMEs were born either in the era when faxes were a novelty or when Windows computers were first appearing on small businesses desktops. They are creatures of another era.

In the current era cloud, social media and collaborative services are running business. The idea of buying a workstation for a new employee and waiting for the IT guy to set them up on the network is an antiquated memory; today’s workers have their own laptops, tablets and smartphones to do the work – all they need is a password.

Those services offer a different way of organising a business and this is the most worrying part of the statistics – large organisations are slowly, and not always successfully, adopting modern management practices while many small businesses are locked into a 1970s and 80s way of working.

For businesses being founded today, this isn’t a worry – they are the true digital natives and are reaping the benefits of more efficient ways of working. Something emphasised by Google’s updates to its Drive productivity services announced overnight.

That’s something that should focus the plans of established businesses of all sizes as they adapt to working in a connected society.

Knocking at Silicon Valley’s door

Chasing the Silicon Valley model may be a mistake for cities trying to become modern industrial hubs

In opening Salesforce’s new London office yesterday, former BT CEO Lord Livingston described the city as “knocking at the door of Silicon Valley.”

Judging from the Computing UK article that description hasn’t impressed the rest of the British tech community as it confirms in their minds there is, as usual, too much focus on the capital and Livingston’s view also raises the question of whether London really wants to be another Silicon Valley.

Like all global industrial hubs Silicon Valley the result of a series of happy coincidences; massive defense spending, determined educators, clever inventors and savvy entrepreneurs all finding themselves in the same place at the same time.

Trying to replicate the factors that turned the region into the late Twentieth Century’s centre of technology is almost impossible – even the United States couldn’t afford the massive defense spending over the fifty years from 1941 that underpinned the Valley’s development.

Apart from the spending; the culture, economy, geography, markets and workforce of Silicon Valley are very different to that of London’s.

This not to say London doesn’t have advantages over Silicon Valley; access to Europe and relatively easy immigration policies make Britain a very attractive location for tech businesses. If the local startup community can tap The City’s banking resources then London could well be the next global hub.

If London is the next global tech centre – history will tell – it will almost certainly be very different to Silicon Valley.

Strangely, the event Lord Livingston was speaking at reflects how the Californian tech sector is evolving; Salesforce is a San Francisco company and represents a shift in the last five years from the suburbia of San Jose and Palo Alto to the quirky city life of SoMa and the Tenderloin.

At the same time Silicon Valley itself is evolving into something different, just as it did in the 1990s with the switch from microprocessor manufacturing to software development.

That shift illustrates the risks of trying to imitate one industrial hub; by the time you’ve build your replica, the original has moved on.

If you spent your life trying to knock on the door of heroes you want to imitate, it would be shame to finally make it only to find they’ve moved.

The high cost of failing fast

There can be real human costs to failing fast as the history of Twentieth Century aircraft shows

It’s fashionable to talk about innovation and failing fast but exploring new technologies has always carried a great deal of risk as a BBC feature on failed aircraft design shows.

Aviation, like automobiles, was a wonderful opportunity for early Twentieth Century tinkerers. With the added impetuous of two world wars, the development of aircraft saw some strange experiments.

One of the things that drove aviation innovation was the evolution of materials science and manufacturing methods, sometimes with tragic results as we saw with the Comet jet liner’s fuselage failures and the DC-10s defective cargo door latches.

In many ways, the early days of airliners was not dissimilar to today’s experiments with smart materials and 3D printing.

Tragedies like the Comet and DC-10 should remind us that in some field the cost of failure is high.When a widget breaks, people can get hurt.

As we experiment with new materials and manufacturing processes, we will make mistakes just as the aviation pioneers did. It’s an ethical aspect of innovation we need to keep in mind, there can be real costs to failing fast.

Image of De Havilland Comet by Clinton Groves through Wikipedia

Tesla and the open patents

Tesla’s Elon Musk open patent announcement might be good for the future of both electric cars and patents.

Imagine the car steering wheel had been patented at the beginning of the Twentieth Century and that it was only top end vehicles or French cars that were steered that way?

That’s the situation we’re currently facing in the tech world as almost every conceivable idea, however silly, has a patent slapped on it in the hope it can help the business either defensively or as a revenue generator.

Yesterday’s announcement by Tesla Motors’ CEO Elon Musk that the electric car company would be opening it’s patents for ‘in good faith’ uses is a welcome change.

For Tesla it encourages the growth of the electric car industry making the sector deeper and more attractive to consumers who are tightly suspicious about being locked into proprietary technologies.

It’s interesting too that the motivation for taking up so many patents was to prevent the established motor companies grabbing Tesla’s inventions. As it turns out, that wasn’t necessary.

At Tesla, however, we felt compelled to create patents out of concern that the big car companies would copy our technology and then use their massive manufacturing, sales and marketing power to overwhelm Tesla. We couldn’t have been more wrong. The unfortunate reality is the opposite: electric car programs (or programs for any vehicle that doesn’t burn hydrocarbons) at the major manufacturers are small to non-existent, constituting an average of far less than 1% of their total vehicle sales.

So opening up the patent portfolio means Tesla might see more companies enter the space which in turn may create economies of scale.

No end to the patent wars

Although Tesla’s move doesn’t mean all patents wars are over; Musk’s statement that technologies used in ‘good faith’ will be immune from legal action leaves plenty of potential for disputes.

There’s also the problem of cross-licenses with many of Tesla’s invention being subject to agreements with other companies, not to mention technologies bought in from outside.

As Sun Microsystems showed during a previous round of the patent wars, it’s still possible for innocent users to be sued in the event of a dispute.

IBM and open patents

In the wake of that debacle, which fatally damaged Sun’s reputation, IBM made 500 of their patents available to the open source community in 2005 showing Musk’s move isn’t the first time this has happened.

History will tell us if Musk’s announcement helps build the electric car market, if it does it may be an indicator for the future of patents.

Uber’s Travis Kalanick on the highly valued business of disruption

Uber’s Travis Kalanick speaks on his company’s $17 billion valuation

For a four year old business, hire car service Uber is certainly causing a lot of trouble.

Bloomberg Businessweek’s Brad Stone has an interview with the company’s founder and CEO Travis Kalanick on his plans after announcing a 1.2 billion dollar fundraising that values the venture at $17 billion.

Seventeen billion dollars is a hefty valuation for the business and many believe it marks the peak of the current tech bubble, although many of us though Facebook’s billion dollar purchase of Instagram two years ago was that marker.

Kalanick’s views are interesting in his take on that valuation – as he points out the San Francisco taxi market alone turns over $22 billion each year, so Uber’s valuation isn’t beyond the bounds of possibility.

Uber and Logistics

Also notable is Kalanick’s view on the logistics market, something that this blog has maintained is the real business of Uber. In that field, Fedex’s stock market value is $44 billion although Kalanick is discounting the company’s potential in that field.

Right now Uber is on a high, and regardless of any set backs they may get with their ride sharing services, it’s hard to see how the company isn’t going to grab a healthy slice of the global taxi industry and possibly disrupt the logistics industry as well.

Even should Uber end up being the poster child for today’s tech sector irrational exuberance, the company is a stunning example of how businesses we once thought were immune from global disruption are now being shaken up.

Television in an age of context and the mobile internet

Ericsson’s head of broadcast, Thosten Sauer, sees context as key to using mobile video as telcos struggle with exploding internet traffic

One of the great changes to the telecommunications industry is the rise of video. As part of the Decoding the New Economy video series we had an opportunity to grab a quick chat with Torsten Sauer, Ericsson’s Vice President of Broadcast services.

Video is the great challenge for telecommunications company, broadcasters and consumers with Cisco Systems predicting by 2018 over 50% of internet traffic will be videos.

As designer Gadi Amit told this website a few weeks ago, the problem is compounded as the broadcast world evolves from a three or four screen environment to an almost infinite range of screen sizes and devices.

With most of that traffic being over mobile devices, Sweden’s Ericsson has been adapting to the the industry’s change to mobile video with a series of acquisitions in the broadcast production space. Sauer explained some of the motivations and strategies behind Ericsson’s moves in the industry.

Red Bee Media

Ericsson’s acquisition of British content house Red Bee Media earlier this year is one of the areas where the company is looking at growing its services.

“Consumer behaviour is changing and that represents a huge transformation for the industry,” Sauer says. “We want to be a catalyst for that transformation through providing the right services.”

Along with more traditional fields like basic production services, Sauer sees the company’s opportunity in building the metadata into videos making them more accessible over the very crowded internet.

A multitude of screens

The other key opportunity Sauer sees is that by creating richer content, it becomes easier for creators, broadcasters and advertisers to serve appropriate content to viewers depending upon both their interests and the devices they are using.

“It’s a great opportunity for broadcasters to address new opportunities and revenue streams on different devices and in different locations.”

Sauer’s view ties in with Gadi Amit’s in that the proliferation of ways to watch videos is going to create great opportunities for broadcasters to find different ways to show their work.

The innovation race

With the proliferation of channels, the field isn’t just left to the incumbents with Suaer seeing the entry of new broadcasters as one of the great opportunities.

“There will be a lot of opportunities for a lot of new players, that will create a healthy innovation base. It’s a very exciting time to be in this industry.”

With video marketing exploding, Sauer sees it’s important for non-broadcast businesses to experiment with video; “It’s now the time, business models are not all set and technology models are not all set.”

Just as businesses have to deal with a more mobile marketplace and workforce, we’re also seeing video becoming more important. It’s a great opportunity for businesses to develop new channels.

Too far in front of the curve

Even the best technologies can fail if they are too far ahead of the marketplace

Today Telstra’s CEO David Thodey launched the company’s new public Wi-Fi network that the telco hopes to roll out to two million locations across Australia.

In using Telefonica’s Fon service, the idea is to equip customers on landline connections – ADSL, cable TV or Fibre – with a public wireless hotspot. The telco can then offer public Wi-Fi as a service.

With well over half the country’s Internet market, Telstra can deliver reasonably good coverage with such a network in the same way BT does with their Wi-Fi that’s already providing this service in the UK with the same technology.

Today’s announcement isn’t the first time Telstra has launched a municipal Wi-Fi service, five years ago they launched a product that quietly slipped into obscurity.

At today’s launch, David Thodey mentioned that previous service and put it down to the immaturity of the technology.

Several generations of Wi-Fi technology later, it may be the new product is more reliable and stable than the last failed attempt and sees far better take up rates.

Which leads us to a truism in the technology industry – everything old is new again.

In fact, most of the technology we talk about today such as cloud computing, social media and citywide Wi-Fi has been around for years under different names.

What makes say cloud computing today more successful than software as a service a decade a go is that the current technology makes the products more reliable and accessible.

That’s another affect of the Gartner hype cycle, that as one technology recovers from the trough of disillusionment it gets renamed and spawns the adoption of a bunch of other neglected concepts or ideas.

As with much in businesses, the adoption of technology is as much a matter of timing as it is expertise.