Every now and then I look back to understand how the world thought of new innovations. I see some unexpected failures, which no one had expected. I, for one, did not anyhow. Think of Google Glass. Where are the hordes of people walking around with this sophisticated pair of glasses on their nose? They are nowhere to be found, as the device meets a strongly negative reaction from the audience. Consumers fear that their privacy will be violated by others. What does this mean for the year ahead? Forget for a moment the calibrated success stories of smart watches or life-prolonging wonder drug C60 that shook the medical world, but look at the innovation dilemmas that are coming our way. For there is the greatest uncertainty.
I find a dilemma more interesting than a prediction because it means being at a crossroad and making choices is difficult. The dilemma’s I cover are in the field of innovation management, sharing economics and the use of technology.
Innovation by startups or corporates?
Startup Slack has been in the news a lot lately. The company focuses on communication in teams that combines implementation of archiving, chat and instant documents.
Let’s say, Dropbox meets Google Apps, meets Yammer...;-) With an investment from Google Ventures and the world’s famous venture capitalist Kleiner Perkins, comes a valuation of the company at US $1.12 billion. With only 268,000 users that is a lot of money for a startup which is just one year old. Grist for the mill of the gurus of Silicon Valley who say that startups are the only answer for innovation in the world. Such valuation is a confirmation of their message.
And as one can see, even faster growth in January 2015…
Startups also provoke interest because they are all the underdogs starting with a business model or technology that is quite different from the existing norm. Take for instance a subscription model, whilst the whole industry is still on sale of individual units.
A good example is the publishing industry. There has been no one in the industry to propose things to be done differently and to make a business model for this. Through initiatives such as the Correspondent and Blendle, that sector has been awakened. Blendle creates an opportunity to pay only for the article you want to read. Correspondent is an ad-free medium that delivers the so called longreads. People are joining the movement for quality journalism. Both examples are in conflict with the business model of a traditional publisher.
Still startups seem to work well. After such a wave of disruption, think how many other sectors can follow the example of startups in the publishing world. Many executives in corporates have lost trust in their own marketing and IT departments that are able to realize digital innovation across companies. Too slow, not commercial and too cumbersome. Innovation must be fast and disruptive. Logically, then follows the idea to cast off and move to Silicon Valley to invest in technology startups. So instead of investing in their own people and capacities, attention is focused on initiatives outside of your own organization. Go West! Step into the next Facebook!
But then again? Is it wise for a company to take on anything that comes from the startup scene?
I recently read an interview with Ralph Hamers, CEO of ING. Like many bank managers, he puts the emphasis more and more on investing rather than self-innovating. In my belief system, this is a too rosy picture, mainly because of all the great company valuations of few leaders. Currently, there are so many startups out there, I start to feel overwhelmed. In the financial world alone, there are more than 3,000 initiatives that have reinvented the wheel. Crowdfunding, payment options and money transfers back to your home country, in every part of the financial value chain there are at least 50 new parties to substitute the banks. With all these different disruptors, it has become more of an art to assess a startup on the basis of their pitch and website.
I recently did my own research into a competitive startup, because I was amazed by their customer growth. I called some of the managers who worked with the organization, to ask why they were working with this startup. Guess what? They had only agreed to an interview, but their logo was there for building trust among customers. You see this a lot. In the battle for attention, many startups take the freedom to underline their customer base and technological superiority. And so messages of the potential hazards emerge. Chances are that as big corporate you may become blinded if you're focused on startups alone and not to talk to your own IT department. And the government sees this too, just think of the City of Amsterdam as the new Silicon Valley of Europe, which it wants to be. It sounds so easy. The moment you cannot solve your problems internally, find the solutions outside.
An alternative route may be that large companies start investing again in solving internal problems. Many good methods from the startup scene like scrum and lean startup, launching projects faster rather than testing in a laboratory are well known by managers. If they provide space for their employees to carry out their dreams within the organization and start a dialogue that can stimulate the internal vision and business model, that produces an interesting mix.
A familiar example of a big business innovation is the world famous Tinder freemium dating app that is 'just' a part of the media company IAC, which also has the two largest paid dating websites in the world. Or take Watson, IBM. A real breakthrough innovation of a large company that was the first to create a triple helix for different data techniques. In the pharmaceutical world, this means that a doctor using Watson to treat a symptom of a patient will always get the latest insights and can prescribe the best possible treatment. That is fundamentally different from searching on Google. Still, these examples are relevant because corporate innovation is not dead. Who dares to follow their example and join the internal discussion? Or as a manager to take the huge risk to not listen to Silicon Valley?
Sharing economy or trusted economy?
Last year, we read a lot about new business models. Parties like Airbnb and Peerby are new, sexy and idealistic. This also fits in with the image of the world of startups as sharing, peer to peer and the so called collaborative consumption. It’s all about the same thing: do well by turning to the unused capacity. A bonus for you and good for the environment by avoiding all additional personal consumption. So I was excited about the trasport-app Uber. 'Was', because ideologically it is not anymore. Eight billion euro turnover in a year, 20% of which lingers as revenue in the company instead of with the drivers. That is not a small part, but the dominant force in the market! The images I associate with it as good for the environment or sharing is not such, because I do not share my Uber cab. They are often professional drivers, who are also struggling to keep afloat by the lack of employment by Uber. Also, companies like TCA and Connexxion already tried similar initiatives. Think Taxi Bavaria with one national phone number, bookings-app TaxiID, TomTom Taxi or Cabster. These initiatives never really got off the ground. The competition is therefore limited. It’s that Uber understands marketing much better, but is not radically different or technologically more advanced. The shift to sharing economy primarily means that the money goes to the few hundred men who are in a startup. I have nothing against money or deserving what is earned, but I do not see them as idealistic or cute anymore. It's just hard business. If I still want to pursue that ideal of cooperation and less waste, old models such as cooperative and credit unions are at least as relevant, because in the DNA of these organizations sit real idealistic principles.
Will 2015 be more about sharing, and thereby hip and happening, or about dull but familiar revival of cooperatives? Tech or no-tech?
The previous two dilemmas were dealing with technology. Within that world there is a vanguard of supporters of singularity that now has become a movement for everyone who believes that technology is the answer to the world's problems. The exponential growth of computing power and developments in genetics, nanotechnology and artificial intelligence, humanity will soon overcome the biological limitations. The singularity momentum will be in 2028, when the intelligence of a robot will go beyond the human’s. This has implications for almost all important areas of our lives, such as the environment, education and health. This means infinite decision speed and increased accumulation of knowledge by using technology. So says the technology church.
On the other hand, you hear the opposing views. Take Elon Musk, the creator of, among others Tesla cars. He warns us of a world where super computers and robots decide what is good for humanity. Are we then in the world of 1984, am I a Robot or part of the Matrix? How much technology is enough?
Technology will undoubtedly bring much good, but my needs of involvement, commitment and attention will not change. Internet was once promoted as it would allow me to have more time for my neighbor. Everywhere I go, I see people fixated on their screens. We are hooked, and the singularity smacks into me more drugs to sustain my addiction.
I believe that technology has ensured that we can do things easier or faster, but there is just so much fuss and distraction that it might not always be for the best. Indeed, the truly priceless things in life are not on the technology side. Isn’t adding value for customers more important than adding technology? Or looking for what people desire?
A friend of mine was unreachable for the entire month of August. Emails, Whatsapp messages went straight to the trash. Why is that? He wanted to have time to read, talk and actually live. Attention to give to his neighbor because he deserves it. This person is not a renegade, but a tech guru. I think that many opportunities lie in no-tech solutions, but as an innovator, can you sell something that the rest do not even believe in?
My thoughts on 2015
The past ten years have been dominated by technological connectedness. Many can no longer imagine a world without all this wonderful technology. I myself use it every day and earn my living as an Internet entrepreneur. However, I do not think this will necessarily remain so. There go my dilemmas too. When I look at 2015 I notice that people desire for more people with emotional wisdom rather than technological wisdom. Those are the people who inspire me.
I see a new dichotomy: On one hand people who can afford to be cut off from the world itself. Offline can be for the upper class. On the other hand, the working underclass that are addicted or are obliged to stick to their devices as a rat in a wheel because of their bosses.
Technology is becoming less relevant to me because it has become a commodity. Take for example, all those programming classes at school. However, a world full of technology will make something non-techie like social studies and creative education truly distinctive. For one, I am impressed by my father, who still uses a simple Nokia. It is quite curious that those phones still work, but also impressive because he actually gets in contact and meets people without having to use newer social technology.
I expect a new wave of innovation in which humanity is paramount, in both large trusted companies and a number of startups. This undoubtedly means that new business models emerge. Being human means also limited scalability. Technology is scalable because of its zeros and ones, which can simultaneously have the same quality everywhere. Being human brings fluctuations in the quality, and also has locality. If I'm with you I cannot be elsewhere. But this may not be bad. This is also not love. And there is a lot of money to be paid. Call me a romantic, or naïve, but I expect that the future of innovation can go up as much as a technological wonderland.
Have a lot of innovation fun in 2015!
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