Category: Innovation

Three business lessons from the New York Times

The New York Times Innovation study has important lessons for all business owners and managers.

“The New York Times is winning in journalism,” starts the newspaper’s much discussed internal Innovation Report. Then in great detail it goes on to describe how the audience is being lost to upstarts like the Huffington Post and Buzzfeed.

Given the number of digital forests that have been felled discussing the report in the last week, it’s not worthwhile giving an in depth analysis of the study – particularly given Nieman Labs’ comprehensive dissection of the document.

What does stand out though are a number of over-riding themes that apply to almost any business, not just struggling traditional media outlets.

Being digital first

A constant mantra in the NY Times report is about being ‘digital first’ – if you’re thinking about that today, then you’re probably too late in your industry.

Every industry is now digital: If you’re designing widgets, you’re doing it on CAD system; if you’re selling real estate, you’re listing online (one of the great killers of the old metropolitan newspaper model) and if you’re selling doughnuts, you’re placing your suppliers’ order electronically and maybe 3D printing your icing patterns in the near future.

There isn’t one industry that isn’t being radically changed by digital technology.

Breaking down silos

One of the areas that’s been most resistant to digital change, and yet is the most threatened, is management.

Silos within organisations are a triumph of management power and make it difficult for a business to be dynamic when it’s necessary to negotiate with different fiefdoms just to change the colour of paperclips.

Those silos are fine when industries are cosy and there’s little competition but when disruptors enter the market those management empires become a dangerous, and expensive, weakness.

The New York Times study spends a great deal of its pages discussing how to break down silos within its own organisation and this is something every business owner or manager should be exploring.

With modern communication, information management and workplace collaboration tools many management roles are no longer needed.

For smaller businesses, this is the greatest strength when competing against larger corporations as Huffington Post, Buzzfeed and Business Insider  have shown in stealing the market from the New York Times.

You need to be found

One of the toughest conclusions from the NY Times study is that the quality of content actually doesn’t matter in the marketplace; The Huffington Post and Buzzfeed do an excellent job of taking the NYT’s work, repackaging it and redistributing it in a way readers prefer.

That might be a transition effect – it’s hard not to think that should original content creators like the NY Times be driven out of business then Buzzfeed will have to start employing more journalists and Arianna paying her writers – however right now gloss beats quality.

Buzzfeed and the Huffington Post are attracting audiences because their stories are easy to find online and their headlines almost beg you to read them.

For non-media businesses, the lesson is you need to be found; you may be the best restaurant, electrician or accountant in town but if you’re on the fifteenth page of Google in search results for your industry and suburb then you’re doomed.

The New York Times faces its own unique set of challenges, as do the publishing and media industries, many of the lessons though from the NYT  Innovation paper though can be applied to many businesses.

Leading the disruptive wave

Uber’s fight with taxi regulators is part of a broader business disruption

I’ve a story up on Technology Spectator that pulls together Uber’s fight with taxi regulators around the world with the Australian government’s Commission of Audit.

While the story is written in an Australian context, the key message about business disruption is universal; as barriers to entry fall, no incumbent can assume they are immune from having their business upended.

For Australia, this is a particularly important message as the affluent economy is kept afloat by consumer spending underpinned by a favoured and protected housing market.

The economy though is nowhere near as untouchable as it looks; along with being way over invested in property, Australia’s industries are hopeless uncompetitive and have a cost base similar to Germany’s.

It’s an entire country ripe for disruption, it will be interesting to see if the Lucky Country’s luck holds in the 21st Century.

4D printing and the quest for elegance

Many of us are still getting comfortable with the idea of 3D printing, but MIT’s Skylar Tibbits is working on a fourth dimension.

Many of us are still getting comfortable with the idea of 3D printing, but MIT’s Skylar Tibbits is working on a fourth dimension that he hopes will move us into a more elegant era of design.

Ahead of Skylar’s visit to Sydney for the Vivid Festival in June, Decoding the New Economy had the opportunity to interview him about what 4D printing is and his quest to create materials that can build themselves.

What is 4D printing

“We called it 4D printing because we wanted to add the ability for things to change and transform over time,” explains Skylar. “Time is the fourth dimension.”

Skylar’s mission at MIT’s Self Assembly Lab is to create materials that assemble themselves. In a TED presentation he demonstrates how these materials may work and the philosophy behind them.

Part of that search involves developing techniques for building large and complex structures from small components. “People know and utilise this in biology, chemistry and material science domains and we’re trying to translate that into larger scale applications.”

Avoiding big machines

“We don’t want to build bigger machines than the things we want to build, we want to build distributed systems,” Skylar continues. “If you want to build a skyscraper, you don’t want to build a skyscraper sized machine.”

Not only does this philosphy offer benefits for manufacturing and building but it may also save energy, transport and labour costs as things can automatically build themselves once they’re delivered to a customer.

“Materials should be able to assemble themselves or at least error correct or respond to active energy. There’s a whole application of packaging and minimising volume after manufacturing and transforming on site.”

Over time they could also adapt to changed conditions Skylar believes: “There’s also how products themselves can transform and be smarter adapt to my demands or adapt to the environment as it’s fluctuating around.”

Redefining the makers’ movement

Worldwide we’ve seen the rise of the makers’ movement as affordable 3D printing and cheap electronics has made it possible to build new things; Skylar sees the Self Assembly Lab as being part of, but slightly apart from this group.

“We make machines that make things, we’re integrated into that theme. We’re arguing that people can collaborate with materials and materials can be collaborative. It’s not just us making stuff and forcing materials into place, it’s materials making themselves.

“A lot of methods are top down, big machines force materials into place and we’re trying to argue you can have bottom up applications in manufacturing.”

So more than just simply printing components, Skylar sees the opportunity for embedding the intelligence into components so they can assemble themselves; the real task lies in programming the materials.

 The internet of elegant solutions

Similarly, Skylar sees the internet of things as being a far more passive, perhaps even friendlier, field than that dominated by machines and plastics.

“It’s not about the number of sensors and electronics and motor and things so that we can make these smart devices, we’re interested in how materials and fundamentally elegant solutions responding to external energy can have the same capabilities.”

“We certainly believe in a connected internet of things, but it’s more a material based internet of things.”

“I think that any solution in the beginning you throw a lot of money, technology and motors at it but over time you find more elegant solutions where materials can do more for you.”

“The wearable space is a good example where people don’t want to wear electronics all over their bodies, they don’t want bulky things that are expensive and hard to assemble and clunky to wear.”

“You want materials that you want your skin to touch, so we’re trying to find elegance in the solutions with smart devices.”

Seeding the forest

The challenge for Skylar, the Self Assembly Lab and those looking at changing the worlds of design and manufacturing is – like many other fields – funding.

Material sciences, particularly those being explored at the MIT, have long lead times that aren’t suited to the current Silicon Valley led model of innovation and Skylar believes we need a different model.

“We need to invest in super, long term radical innovation, to seed the economy and global technology development. We gained substantially in the Silicon Valley model with short term wins – with apps and simple technologies with incremental progress.”

“It’s sort of like we need to seed the forest, we can’t just keep taking all these things from the top like low hanging fruit we need to create a forest effect so that we create many new technologies.”

What comes out that forest of 4D printing and smart materials is anyone’s guess; but if Skylar Tibbits has his way, it will certainly be elegant.

NASA and the five technologies that will change business

The Chief Technology Officer of NASA’s Jet Propulsion Laboratory discusses the technologies that will change business.

What will be the next five technologies that will change busines? CITE Magazine has an interview with Tom Soderstrom, the chief technology officer at NASA’s Jet Propulsion Laboratory on what he sees as the next big game changers for business.

The list features many of the topics we’ve discussed on this blog; data visualization, the Internet of Things, robots, 3D printing and new user interfaces.

NASA’s Jet Propulsion Laboratory is a good place to start when looking at what technologies will become commonplace in business as the organisation is testing the limits of modern engineering.

A life in photojournalism

Photographer Charles O’Rear talks about wine, Windows XP and the future of photography

The latest Decoding the New Economy video is an interview with wine photographer Charles O’Rear.

Charles was on tour with Microsoft to promote the end of Windows XP, it was his photo of a Napa Valley hillside that became the background feature the system’s default ‘Bliss’ theme.

The interview is a long ranging discussion on how photojournalism has changed over the last four decades along with the evolution of both the art and science of photography itself.

Kickstarter and ownership

Has Kickstarter funded startup Oculus discredited crowdfunding with its sale to Facebook?

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.

Apple’s long game

Apple are playing the long game with their internet of things strategy so they aren’t panicking into a smart watch

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.

An era of exponential innovation

Deloitte Center for the Edge founder John Hagel talks about our 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

Mortein and The Queen

The story of Queen Elizabeth II and fly spray tells us much about modern scientific research.

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

Driving out inefficiencies

Inefficiencies are being squeezed out of business and corporations are going to have to adapt, warns the World Economic Forum.

“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

Lowered expectations – What is the future for Apple?

Where to next for Apple in an era of lowered expectations?

Last Friday I had a story in Business Spectator on the future of Apple in light of the company’s warning of a 20% fall in revenue next quarter.

The clear message from Apple’s executives was that the company is facing a terminal decline in iPod sales and the iPhone – it’s most profitable and highest selling product – is facing slower sales.

So the search is on to find something that will replicate the iPhone’s success, with the biggest candidate being the iWatch.

The problem with that is the entire wearable technology market is only forecast to be $6bn which is a seventh of Apple’s $42 billion profit last year, so the iWatch can never replace falling iPhone sales.

It may well be for Apple that the period of massive profits and growth is drawing to an end, it doesn’t mean the company is dying – for a start they has nearly $200bn in cash reserves and a healthy $150 billion in sales each year.

Short of Tim Cook unveiling something similar to the iPhone, the future for Apple is probably going to be a bit modest than past few years of huge growth, that’s not a bad thing.

Rather than being the end of Apple, it’s more a revision to the role the company has held for most of it’s existence – a high profit, niche business that sells on quality and brand rather than fighting in the commodity markets.

Milestones of the personal computer industry

Steve Jobs marked most of the milestones of the PC industry’s rise and fall

“There have only been two milestone products in our industry to date,” Steve Jobs told the Boston Computing Club in 1984. “The first was Apple II in 1977 and the second was the IBM PC in 1981.”

Jobs at the time was announcing the third breakthrough – the Apple Mac – which turned 30 last week.

Looking back over the four decades of the PC industry, Jobs’ claim that the Apple Mac was the sector’s third milestone stands up to scrutiny, however the greatest milestone of all for the PC was the launch of Window 3.0 in 1990.

The rise of Windows

Windows 3.0 changed the business model of the industry, it established software vendors – particularly Microsoft – as being dominant over hardware manufacturers, that shift nearly killed Apple and eventually sent most PC builders to the wall.

Microsoft’s advantage over Apple, IBM, Atari and dozens of other systems, was that users weren’t locked into one vendor’s products. It was possible

The Windows 3.0 milestone was even more important in that it forced a shakeout in the software industry as well, many of the incumbent vendors – most notably WordPerfect – though the Windows Graphic User Interface (GUI) was a flash in the pan and that most office workers would prefer to use keyboard instructions rather than mouse clicks.

WordPerfect was horribly, horribly wrong in judging the market and by the time they released the Windows versions of their product Microsoft had captured key market share for Word and the bundled Office suite that dominates the business world today.

Going mobile

So things were good for Microsoft until the next milestone, which again was marked by Steve Jobs, the launch of the iPhone genuinely did change the smartphone industry and was the first inkling of mobile would eventually destabilise the PC sector.

It’s interesting comparing Jobs’ iconic 2007 iPhone which sets the standard for product launches with the somewhat rough at the edges 1984 Boston presentation although both show how Steve Jobs was a master salesperson and a passionate believer in his products.

The PC’s final milestone

Three years later Steve Jobs delivered the milestone product that marked the beginning of the end for the PC industry, the iPad finally delivered a mobile computing device that businesses and consumers wanted.

Apple’s iPad also marked a fundamental shift in the computer industry – no longer did the software companies control the market, power had shifted back to the manufacturers.

From that moment on the PC, and Microsoft’s Windows business, started a terminal decline.

The rise and fall of the personal computer is a great illustration of a transition technology. That Steve Jobs bookmarked the beginning and the end of the PC industry is an interesting note about a technology that changed the home and workplace.