The Trap of the Better Mousetrap

April 15th, 2014

5G Press ConferenceThe “better mousetrap syndrome” is where a basic, cheap, functional and familiar product is reinvented with something that does the same thing, but is potentially better and costs more. It’s a recognized trap for product designers and companies, and yet it still occurs.

Here are two examples of this syndrome that I recently experienced:

1. I was assisting an associate respond to a request for tactical marketing support for a new product from a relatively established company entering the fiercely competitive mobile space. The more we discussed this the more it became apparent that this company had a solution but didn’t really know the problem they were trying to solve. Their solution provided certain advantages /benefits but they hadn’t found out if these were something that their mainstream customers really needed or wanted.

Having been actively involved with a startup that offers a new technology solution to an age old problem, I have spent much time exploring the benefits of minimum viable products and the use of business model frameworks to best test and define customer needs and value propositions. It is therefore mind blowing to see that companies don’t learn from this process before rushing blindly into product development, market extensions or new products; or more significantly, close their ears when being informed about the folly they are about to commit.

2. During a 2009 visit to Mobile World Congress (MWC) in Barcelona the following astute observations were made about the mobile business by a colleague from outside the industry:

  • There’s a tendency to start with a technology and build it into a product, instead of starting with consumer behavior insight and creating a product to serve it.
  • This industry tends to approach development in a sequential manner: firstly, system and network decisions are made to accommodate long infrastructure lead times. Then devices and user interfaces are developed, next applications and services are developed and, finally, a consumer proposition is made – but this is often late in the development cycle when critical decisions have already been made.

These perceptive observations returned to me as I attended a press conference at this year’s MWC in Barcelona, when the EU sponsored initiative to create 5G was announced. At this same conference, and indeed over the past 12 months, I have heard and read nothing but moans and groans about the sorry business situation of mobile operators as voice revenues decline, data volumes increase and over the top providers piggy back on their networks, providing the messaging services that consumers want instead of operator provided expensive text and picture messaging services.

Has this industry learned nothing over the last 6 years? The OTT and software startups see the need to create a product and are, in the main, testing and refining their product and pivoting in accordance with lessons learned from consumers. The mobile industry, on the other hand, seems hell bent on creating a better mouse trap without checking that it’s something that the customer wants or, more importantly, is willing to pay for.

There are mechanisms that can bring consumer understanding to the forefront of the product development process; there are also business model frameworks that force holistic thinking about the solution, value proposition, and customer experience across all the business touch points. In some cases they are freely available and in others they are proprietary, but they are there for companies to explore. In today’s connected world, solutions shouldn’t be continually created for no known problem or for no identified customer need.

To learn more about effective approaches to more successful product development, contact us at info@keysoglobal.com

Steve Bell, President, KeySo Global

International CES 2014: A tipping point for the Internet of Things?

February 18th, 2014
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Cisco’s shopping cart

As predicted, the 2014 International Consumer Electronics Show simply overflowed with examples of IoT finally becoming a marketplace reality – from the connected home to the connected automobile to digital health – as well as large companies vying for the opportunity to merge cloud and mobile technologies with sensors and MEMS technology.

In his keynote presentation John Chambers, CEO of Cisco, predicted that “2014 would be the transformational pivot point for IoT” and that the total cost benefit going forward could be as high as $19 trillion for both public and private sectors. He foresees retail, for example, gaining at least $1.5 trillion in benefits from the implementation of smart shopping carts that both assist and track customers.

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FootLogger demo

The pace, scale and potential impact of IoT emergence has drawn attention from multiple interested parties associated with policy and regulations. During a panel discussion on this subject, FTC Commissioner Maureen K. Ohlhausen encouraged governments to better understand the effects and benefits of innovation on society, and to assess whether existing laws or regulations in the market place can right any potential threats. Adam Thierer, senior research fellow with the Technology Policy Program at the Mercatus Center at George Mason University, warned against the “precautionary principle” model which curtails innovation until it can be proven to not be a serious threat to society. He sees the EU as following this worldview in its approach to privacy and IoT, and he strongly endorses the principle of “permissionless innovation” fostered by the U.S. which deems that experimentation with new technologies and business models should generally be permitted by default. In reality, evolution of IoT will most likely be a combination of all three due to the explosive growth and diversity of the technology globally.

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FashionTEQ notification ring

In another session on MEMS and sensor fusion, Mike Luna, CTO of Jawbone, pointed out that technology on its own is not the key to success. Luna believes that the real challenge for companies such as Jawbone, Nike and Fitbit with their new wearable products will be ensuring that they seamlessly fit into consumers’ everyday lives. Key to this is making sure that they do not adversely react with bodily or external substances, so that they can just be worn and forgotten. Only then can consistent and reliable data be obtained from them and used in such areas as health, sports or general lifestyle enhancement. These new wearables not only communicate with smartphones but with one another and, according to Luna, are in effect creating the Internet of Me, where they become hubs for connection and exchange of data. For wearable technology to really take off I believe that people need to feel socially comfortable with it, and I was interested to see the large number of European, Asian and American companies pursuing the fashion vector for wearables, whether it was notification jewelry such as pendants and rings, or watches that blended style with technology.

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Multiple eyewear options

Rival eyewear products were also abundant at this year’s CES, some incorporating cameras that stream everyday life or automatically take pictures to create an individual’s video blog. Others focused on the industrial space, creating safety glasses with video streaming capability that can be used for training, diagnostic or quality assurance purposes, for example on a production line when a video recording of the process could prove useful. Add to this the increased use of augmented reality, as seen in Googles Glass, and the production and education environment of the future looks very different.

Judging by the technologies on display at this year’s CES, the future is closer than most of us realize. Conference speaker Rob Nail, CEO and Associate Founder of Singularity University, warned, however, that humans are not educated to cope with the exponential technology growth curve that we are currently experiencing. Worse still, he presented evidence that we have limited capability to forecast it. The good news is that, when we finally accept what’s happening, we apparently adapt very quickly! Over the next year it will be interesting to see if the Internet of Everything turns out to be the fundamental tipping point that keynote speaker John Chambers predicts, or if it’s merely one of many on the accelerating exponential technology curve referenced above.

Steve Bell, President, KeySo Global

Has Google Seeded the Future of Mobile?

February 10th, 2014

This past week’s news was dominated by Apple struggling to fulfill Wall Street’s expectations, Samsung’s proposal to reinvent itself as a software company and, the coup de grace, Google selling Motorola to Lenovo. All of these events reveal an industry in transition.

Smartphones, as we know, have transformed the mobile experience for consumers but have hardly changed since the iPhone was introduced in 2007. They have become faster, bigger and have more sensors but they remain square, slim screens that in developed markets cost around $400. In this scenario Samsung and Apple have thrived, sucking out 90% of the industry profitability.

ARA Motorola projectClearly, the future for smartphones lies in the emerging markets where the next 2 to 3 billion devices will be sold and the price point will be closer to $100. So will these two giants still dominate or will Chinese players such as Lenovo, Huawei, ZTE, Coolpad and an army of white label manufacturers take over this space? Is the smartphone/mobile industry about to enter the commoditization phase?

Against this background it was interesting to see that Google is holding on to the Advanced Technology team that is developing the Ara endoskeleton phone design system, which was revealed late last year. Also revealed was a partnership with Phonebloks with the intent of creating an ecosystem of hardware developers to work with the software developers that support Android. The initial offerings will probably not be successful but the following should be taken into consideration:  for the past few years chip manufacturers have been producing ever more capable systems on chip designs, two examples being Qualcomm’s Snapdragon that dominates the smartphone space and Intel’s Edison for the M2M and Internet of Things space. With the advent of 3D manufacturing and ever more capable components, the concept of a spine that acts as a connector may be the catalyst for a fundamental rethink of devices.

Eco-mobIt is no coincidence that ZTE presented a concept design, Eco-Mobius, at CES 2014 that uses a sliding track enabling users to assemble and disassemble screens, core processors, memory, camera and battery; here the concept of “customize your own device” seems to coincide with a growing interest in wearables. The future may well see the fusion of these two trends with fashion styling enabling devices to fit seamlessly into peoples’ lives.

Discussions around the Internet of Things, Internet of Everything and the Internet of Me are all about the future pervasiveness of mobile connectivity across multiple industries as well as the “always on” digital world we live in. These modular architecture concepts that Google and ZTE are experimenting with will help facilitate this. But, more importantly, since Google excels at building ecosystems, if they succeed in creating an ecosystem of hardware developers to fuse with software companies, the future of mobile will see a complete change. Google may well have seeded the future direction of the industry in a way that only a few of us have foreseen.

Steve Bell, President, KeySo Global

2014: The Year of Digital Renaissance?

December 31st, 2013

Digi Renaissance firework 2013As fireworks fill the skies tonight and 2013 comes to a close, it seems a good time to reflect on the current state of the telecoms and ICT industries, and what has changed in the last five years. Having just participated in the 2013 ITU Telecom World Conference in Bangkok, this gave me the opportunity to assess whether the Digital Renaissance that we at KeySo Global have being predicting has in fact transpired.

In 2009 the world was reeling from 12 months of global financial turbulence and anxiety levels were high. WiMAX was causing angst for U.S. carriers and the iPhone was forcing the rethinking of how Wi-Fi and cellular could effectively inter-operate. Data congestion on overloaded 3G networks designed for voice was reaching critical levels as operators adjusted to the realities of YouTube video upload and downloads. The European markets and technology suppliers were firmly in control of the industry, with Nokia the dominant handset supplier controlling 38% of the 1.1 billion phones sold that year. Apple, on the other hand, was gaining credibility and achieved a respectable 2%. ICT was the main theme of the conference as cellular held center stage with 67% market penetration, having enabled 4.6 billion people globally to have access to personal communication capability. In 2009 the prime discussion, therefore, was around internet connection and the role that mobile could play here.

graphic oneFast forward to the 2013 conference in Asia and the global economy, having experienced five years of unprecedented instability, is still in a volatile state where virtually every treasured economic rulebook has been proven ineffective in controlling a 24/7 interconnected digital world. This has been facilitated in part due to cellular penetration reaching 96% and 6.8 billon people having access to cellular – 3.5 billion of whom are in the Asia Pacific region. More significantly, the number of people now online has increased from 26% to 39%. The single biggest contributor to this has been mobile broadband access which has grown from below 10% in 2009 to 30% penetration this year. This growth is closely tied to smartphone growth as well as the availability of lower cost data packages.  In 2009 smartphonesgraphic 2 accounted for approximately 10% of handset shipments, whereas in the 3rd quarter of 2013 smartphones totaled 250 million units, over 55% of total phone shipments that quarter. The biggest loser in this dramatic shift in emphasis towards smartphones and operating systems has been Nokia, but others such as Sony Ericsson, Kyocera, Sharp, Rim, HTC and Motorola have been damaged along the way, to greater or lesser degrees, by the shift to an Android world.

In conclusion, we are living in a far more connected world than we were five years ago. However, the extent to which the interconnection of this increasingly complex human digital and physical world is understood is limited and the ripple effects of these technologies on industry structures have only just started to appear. Telecoms and ICT are certainly not immune to these, as we have seen, but within the next five years we will see the boundary industries of automotive, medical, retail, utilities and manufacturing become increasingly subject to the transformative effects of the mobile internet.

Of greater interest will be the unanticipated consequences that will undoubtedly emerge from the mobile internet and Internet of Things blending with big data analytics, and the unavoidable impact this will have on digital life and behaviors. As an increasingly urbanized planet adopts these technologies to facilitate ever smarter cities, the opportunities for ICT to make a difference to societies are colossal – but the question is how to bring the people along with these changes, and instill trust in them that technology will be used for good and that ethical government will prevail? Clearly, the recent Snowden revelations on the NSA and other agencies have given everyone pause for thought.

As we enter 2014, it is clear that the Digital Renaissance is technically well underway but the structural and behavioral implications are only just beginning to emerge and, when they do surface, I suspect that the predominant challenges we face will be societal. In shaping the future of this brave new world we need to engage its citizens, understand their needs and manage the “Faustian bargain” that will be a fine balance between a surveillance state and the right to privacy. None of these challenges are unsurmountable but they are ones that will need careful monitoring, open conversations and perseverance on the part of governments, industry and citizens around the globe.

Steve Bell, President, KeySo Global

Can Innovation Survive in the Telecoms World?

November 27th, 2013

From an innovation perspective, I have always been convinced that “the language we use defines the horizons of our imagination” and so it struck a chord with me when I read in a recent ITU document that “voice calls are no longer the preferred communication mechanism between people”.

This phraseology implies peril for the telecoms industry and a golden opportunity for the internet world. Voice is, however, still the preferred mechanism of human communication but voice calls via a fixed or mobile telephone system are now not the only option available.

This glass half full, myopic misperception leads me to suggest that the business models of telcos are overly focused on the delivery of “coms”. While this has been a highly successful strategy throughout the 20th century, it is rapidly running out of steam as the internet world and telecoms collide to create the new mobile cloud world of today.

Maybe we should learn from Max Frisch (1911-1991), the Swiss author and critic, who said: “We live in an age of reproduction. Most of what makes up our personal picture of the world we have never seen with our own eyes—or rather we have seen it with our own eyes, but not on the spot: our knowledge comes to us from a distance, we are tele-viewers, tele-hearers, tele-knowers”.

So is it time to pivot this focus? Given the colossal change that convergence has forced within a concatenated time frame, the answer should most definitely be “yes”. The challenge for the telecoms industry is to shift its mindset to focus less on the delivery of “coms” and innovatively focus on “tele”literally meaning “at a distance”.  This demands a focus on innovation that leverages the assets already in place, the layered technology developments of the last 5 years as well as the new ones that are emerging; most importantly, a focus on the evolution of global consumer and business usage needs and patterns. It means combining capabilities and services to “enable engagement over distance”. Now the question to ask is: what is it that tele-consumers and tele-enterprises really need in this 3.0 world?

As an entrepreneur, I have learned much over the past five years about the concepts and practices of lean startups, and I realize that some of the challenges they face are very often closely aligned to those of the telecoms companies: namely, having to pivot and adopt a change in strategy without changing the vision, as well as creating multiple iterations of minimum viable solutions to solve customers’ real problems. In essence, getting back to what mobile operators were doing naturally in the early days of cellular. This may require smaller out-boarded organizations but, more importantly, a return of the visionary leaders and problem solvers to replace the accountants and managers before they succumb to the same fate that awaits many startups – running out of resources!

In conclusion, the panel on innovation that I moderated at last week’s ITU Telecom World 2013 conference in Bangkok was about the need for new mindsets and a reevaluation of the telecoms landscape, chiefly because the current map and strategy no longer accurately represent a territory that has been ripped up by the convergence forces of the last five years. I have no doubt that innovation will thrive in the converged industry but the questions still remain: who will the players be and where will this innovation come from?

Steve Bell, President, KeySo Global

Technology Scouting and the Catch 22 of Innovation

October 14th, 2013

I came across what I would call the “catch 22 of innovation” the other day while working on a project that’s tipped to disrupt an entire industry.

Every major city now has the desire to become a smart city and to use digital technologies to provide better services and products for its citizens. However, as anyone who reads the news understands, the majority of this innovation in digital technologies is coming from small startups, not from the larger more established companies. One of the services that KeySo Global provides is technology scouting to large companies and for exactly this reason; they are not innovating broadly or rapidly enough, and are beginning to recognize the urgent need to partner with smaller startups that have the technology capability to enhance their more traditional offerings.

So the “catch 22”, as we see it in this context, lies in the request for proposal (RFP) / request for quotation (RFQ) process that cities use when looking for new technologies and solutions to meet existing needs. In most RFP’s and RFQ’s there is a statement that says “we are open to new ideas and technologies that will provide services to enhance the process or reduce the cost of providing those services”. However, buried deep within the RFP, under terms and conditions, is a sentence that also states “any company proposing a solution must have been in existence for at least 3 years, provide a list of existing clients and show financial capability to support the project through its anticipated life.” How many startups do you know that can meet these criteria?

The real drawback of this is that true innovation is unlikely to come to a city near you at any time soon. Of course there are ways around this dilemma but most of these are not straight forward. The technology scouting service we provide at KeySo Global can help by offering new and innovative startups the hybrid solution of partnering with more established companies so that together they can leverage the digital components needed for a thriving smart city infrastructure.

The process of scouting, filtering, evaluating and on-boarding technologies is crucial to an organization’s future success but it can be challenging as well as time and resource consuming at a time of restricted budgets. The option that we offer is to partner with a team that has successfully performed similar roles and created transformational processes at Motorola, Sony Ericsson and TRW. We offer a unique blend of experience, insight and proven processes to achieve this outcome. Our strategic review process and implementation framework enables us to rapidly partner with clients to successfully find, evaluate, acquire and on-board innovative technologies. A significant aspect of our approach is to help the startup and the established company understand one another’s’ mindsets. We use the “two weeks analogy” to help frame the fundamental differences in perspective of the two:  two weeks to a startup can mean life or death whereas to a large company it’s just a meeting!

Contact us  for more information and to find out how we can help accelerate innovation.

Steve Bell, President, KeySo Global

 

The Value of a Global Mobile Mindset

September 26th, 2013

Over breakfast the other morning with a former Motorola colleague, we reflected on how we had both been part of teams and companies that had created two exponential growth industries:  cellular and, most recently, the mobile internet – both technologies and industries that have drastically changed and still are re-shaping lives, societies and economies today.

Being part of this transformation can’t help but influence and shape you as an individual; to have lived through an era where the rate of growth outstripped supply of components and capacity on a global basis was no trivial experience.

As a result of this, having a “global mobile mindset” has become part of my DNA. I believe that I intuitively think differently, and deliberately look for the inter-connections and the multiplier effects. Boundaries and borders between business, industry and nation states are historic and do not reflect the flows of knowledge and trade that are enabled in a digital mobile world.  I look at how humans interact with systems, things and other people whilst in motion. Nothing that used to be static or fixed remains that way any longer, and the systems and business models that support the current status quo are subject to continuous disruption.  I tend to assess each situation that I encounter with this broad and open minded approach, and pose the question “how can mobility fundamentally change current assumptions or remove existing constraints?”

As part of my consultancy practice, I now apply this honed intuitive capability and process to help traditional companies and industries look at how the mobile internet, as well as the emerging Internet of Things, can create seismic opportunities for growth. I have translated over 30 years of international experience and best practices into an adaptive solution to client needs. However, there are only a handful of companies that are readily open to this approach; the reason being that strategic innovation requires venturing away from familiar ground into uncharted territory – and that requires courage and leadership.

As a manager, do you consider yourself to be a strategic visionary or digital leader of change that intuitively senses the impending shifts in your industry? If so, you are our natural client and we can help. What we bring are unique insights, frameworks and valuable experience that can help you reshape the way you perceive your industry, and an adaptive methodology to accelerate the strategic innovation plan needed to drive your company into the digital age.

Steve Bell, President, KeySo Global

The Challenges of a Digital Artisan in the 21st Century Workplace

September 11th, 2013

A recent article on top technology trends talks about “wiki-work”, which describes today’s seamless internet-facilitated creation and distribution of work, and the “porous workplace” where mobile technology enables work to be carried out in any location and at any time. Trend spotter, Howard Tullman, believes that these and other trends will contribute to a future where more people will piecemeal their workloads, working multiple freelance jobs instead of one full-time position. “By 2020”, Tullman claims, “40% of the U.S. population is going to be acting as free agents.”

This projection aligns with the concept of the “digital artisan” that we have defined in our previous blogs; an individual who is adept at leveraging digital capability to create, enhance and deliver high quality products or services in small quantities, tailored specifically for select customers and markets. In other words, it’s the antithesis of today’s world of mass-production and mass-markets.

For me, however, Tullman’s forecast arouses some concerns and prompts me to pose the following questions: if 40% of the population becomes freelance by 2020, what will the overall economy look like? Will large companies still dominate the economic landscape? Will mass-production and consumption still be the drivers of economic growth? What will be the role of Wall Street in this new world? How will labor law and human resources operate? How will people transition into these new roles? And how will society and the ecosystem evolve to support them?

I’ve also recently been reading about the new Catch 55 – a derivative of the famous Catch 22! Catch 55 refers to the requirement for employees to now work beyond the traditional retirement age, primarily due to dwindling pension funds. This is becoming complicated, however, at a time when companies are being forced to ease the 55+ year olds out of their positions as the younger generation – which is cheaper to employ – push for promotion and the top jobs.  Again, this is something that we have written about – with the loss of the older, more experienced worker goes a wealth of tacit or aggregate knowledge that corporations traditionally hold so close to their chest as proprietary capability. This loss of know-how is effectively released out into the collective where it can, potentially, become fuel for the fire of competitors or new entrants.  The question then arises – how do these 55+ year olds transition into a new world where the corporate workplace considers them too expensive to hire, even though they invariably bring valuable experience-based capabilities and a keen desire to continue working for at least another 10 to 15 years?

Having been one of those 55+ year olds who made the transition from corporate life to free agent / freelancer / consultant, I can attest to the challenges that this brings, and in particular the acquisition and application of new and practical skills. Aspects such as learning how to sell and market yourself,  building a pipeline of work, ensuring that projects are in various stages of completion and execution to maintain a continuous cash flow, dealing with large companies that often delay projects, don’t pay or delay payment – all these are taken care of by others in a corporate environment. There is clearly an opportunity for a new type of agency to emerge – one that seeks and feeds jobs and projects to this select group of freelancers, and leverages their talents to meet corporate requirements. In a report by Vistage “The Future of Work”, this concept is referred to as “Going Hollywood”,  where in movie making today a different set of actors, directors, screenwriters and producers are brought in each time to fill the necessary roles, versus the days when large movie studios controlled the whole process.

One final thought that comes to mind is that, if 40% of the working population is going to become free agents with no guaranteed employer or income, then credit bureaus, mortgage companies and banks will have to drastically rethink and readjust their perspectives on how they assess people for loans and mortgages, or otherwise the future implications for home ownership and wealth creation, as well as the building industry, appear pretty grim.

Since collaboration is now the name of the game, the social networks and communities that have rapidly emerged over the last 5-6 years should now be evolved into broader learning and support mechanisms for today’s digital artisans, to ensure that this group of individuals acquires the necessary skills, support and training to make a smooth transition into the 21st century workplace.

Steve Bell, President, KeySo Global

BlackBerry and JC Penney: Two Giants That Have Lost Their Way?

August 26th, 2013

What do BlackBerry and JC Penney have in common? Possibly more than you might realize.

1. Both missed the shift in their industry.

2. Both changed leadership.

3. Both implemented radical change.

4. Both achieved less than impressive results after this change.

5. Both implemented change following agitation from Wall Street – even though Main Street reacted neutrally or negatively to the change.

JC Penney even went as far as to hire the retail guru from Apple, Ron Johnson, as its new CEO to turn the company around but, in so doing, the needs of the customer were ignored. The introduction of tablets at point of sale, a relaxed dress code for the sales staff and the removal of coupons and store cash registers confused the target shopper – a very different shopper to the one found at the Apple store. The application of technology in this case was not the issue. The crucial question overlooked was whether the benefits of that technology outweighed the resistance to adopting it; in the case of JC Penney they did not. Not only was there resistance from the customer but Ron Johnson failed to gain the collaboration of staff and management, which proved to be a critical mistake.

Sales of the new BlackBerry 10 operating system based products – the Z10 and the Q10, and most recently the Q5 – are down as BlackBerry has lost significant market share to Apple, with its sleek and easy to use operating system and beautifully designed product. It was BlackBerry’s misconception that its superior new operating system and good design would enable it to reclaim its former position in the market. The reality was that BlackBerry started as a technology but developed into an experience. In the early 21st century the device became widely known as a “CrackBerry”, referring to the excessive and obsessive email-checking by its owners, for both business and personal use. The technology was convenient and secure and, most importantly, BlackBerry had become a trusted household name.

BlackBerry’s demise, however, was not just related to the fact that the operating system did not evolve; it put too much focus on the consumer and lost sight of its valued customer base, the corporate IT customer, whose growing desire was to access both their corporate digital networks and their social media networks on the same device, but this was ignored by BlackBerry. The infamous “BlackBerry outage” was the final straw and violated the trust that former loyal consumers had in the BlackBerry experience. RIM, as it was, was an engineering company that had no idea how to continue to design experiences and now, as “BlackBerry”, does not have the marketing knowledge or clout to rebuild consumer trust in the brand.

Both companies tried to emulate Apple in a classic “best practices” way but failed to understand that the Apple store and its devices were designs that embodied feelings and experiences, and created by a man with exceptional vision; someone who posed questions such as “how do we reinvent the store?” and “how do we do things differently on a phone?” Steve Jobs never just produced a “me too” product.

So, what’s the walk away? Wall Street hates failure but, more than that, it’s terrified of change. Both however are essential for innovation and creativity which are cornerstones of modern day business success. Wall Street’s demands for continuity of performance can ultimately result in giants being brought to their knees. What’s more dangerous is that when Wall Street sees these giants falling they demand a change of leadership. This new leadership is then faced with the challenges of innovating and risk taking to enhance performance when, in reality, all Wall Street wants is to preserve the status quo. JC Penny and RIM, as well as Motorola and Nokia, are prime examples of this. Apple looks as if it is unassailable at this point of time but calls by Wall Street activists to withdraw cash from the company will ultimately weaken its ability to take the risks that are necessary to sustain it going forward.

Steve Bell, President, KeySo Global

The Entrepreneur’s Paradox

July 3rd, 2013

The macro picture

Most people associated with business strategy and the challenges of cultivating innovation are familiar with a classic business book by Clayton Christensen called “The Innovator’s Dilemma”. In this seminal work, Christensen examines the impact of new technology on existing industry incumbents and the dilemma that they face in sustaining current business at the same time as embracing disruptive technology.

A recent business magazine article identified that the pace of disruption was accelerating as multiple technologies come together and as innovators constantly try to leverage these technologies for new goods and services. In most cases, the implementations fail but these failures have a significant benefit as they enhance the collective learning of both the innovators and the customers with each new product cycle. This learning aspect for customers is critical because they are becoming familiar with new experiences and technology. Consequently, when the right combination of experience and technologies is eventually created, the market is more receptive as customers are already familiar with it, meaning that the concept goes viral faster and becomes disruptive more rapidly.

In past blogs I have talked about the concept of “boundary blurring” between industries as the impact of combined ICT technologies changes the value propositions and business models of industries such as banking, health, retail and automotive. We have also described a phenomena we call “digital life” which is the osmosis-like process of digital technology absorption into people’s everyday lives. Most individuals do not recognize the degree to which they have adapted to the new technologies around them. However, the stage is set for the emergence of viral disruption in multiple industries in the next couple of years as entrepreneurs, small startups and companies within ICT see the opportunity to apply these new technologies.

The micro picture

Against this macro picture that I have been sharing through my consultancy work over the past 5 years, I have witnessed several opportunities for businesses to cross boundaries and create disruptive new products, services and business models. Together with a partner, I am now in the process of creating a new startup that applies hardware and software technology, systems thinking and creativity to an industry ripe for disruptive innovation. In developing this venture, however, I have stumbled across what I call the “entrepreneur’s paradox” which is the corollary to the innovator’s dilemma.

The paradox occurs because of the above mentioned macro aspects necessary to create ripe market opportunities: the customers are ready, the industry has old and established business models and market perspectives, and mobile and technology startup companies are winning early adopters.

To enter this industry it requires considerable time and investment to develop the product and value proposition. It also requires the exposure of the idea/product to investors, customers and potential partners in order to test the idea and to prove it can create a sustainable business model. Angel and VC investors are notorious for not signing confidentiality agreements in early stage discussions.  In other words, it requires putting the idea out into the public domain, which is the nub of the paradox, because it works against the other desirable attribute of a tech startup – namely, a patented product or idea.

In order to submit a provisional or full patent filing, and claim “first to file” status, it requires no prior public disclosure. So how do you know that what you are filing justifies the cost in terms of being able to create a viable business? And how do you know that the time you spend developing your invention isn’t going to be preempted by someone else fast-cycling a product concept with target customers? The paradox here is: should you file first or seek customer feedback first by creating a prototype product but, in the process, run the risk of the idea being stolen or preempted?

There is no simple resolution to this but as cycles of technology, learning and consumer adoption accelerate, they are bound to challenge the fine balance between the need and desirability for patents versus the finite market opportunity that may exist and needs to be proven. Not an easy decision to make!

Steve Bell, President, KeySo Global