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Polar Bears – Nature’s Astounding Innovations
By Shlomo Maital
Nature is our supreme innovator. Over many thousands of years, random mutations occur, most of which fail, but a few succeed in helping species to survive to procreate – and became permanently embedded and reproduced in their genes. This evolutionary innovation is slow but highly effective. Variations of it work in human innovation, too. A study in Israel shows that of some 10,000 startups launched between 1999 and 2008, only about 4 %, or around 450, are still alive, growing and profitable. As with evolution, ideas are tossed into the air, and only a few prove truly viable. Entrepreneurs that I spoke with believe firmly that to get 440 viable firms, you do need to launch 10,000.
Consider the Polar Bear. It is currently endangered by global warming and its numbers are falling. This is a great tragedy. The polar bear is one of Nature’s supreme innovations.
How does the Polar Bear survive in the long Arctic nights, in freezing cold?
Its fur. Its fur hairs are actually not white (they just appear so, because they lack any color). Each hair is transparent, and has a key property – it reflects (rather than absorbs) all wave lengths of light, including infrared. Why is that helpful? The body of the polar bear radiates heat, as infrared radiation. But when body heat reaches the transparent hairs, it is reflected back into the body, rather than radiated off into the air and lost forever. No warmer fur coat exists.
Has anyone thought of creating a synthetic fur jacket or sweater, on this principle?
What else has Nature innovated?
Active hibernation. Bears hibernate in winter, when the food supply declines. Hibernation is a state where the body cools, heartbeat slows and energy consumption is minimal. Polar bears hibernate in summer, when food is very scarce…. But remain awake. How? Their body metabolism goes into hibernation mode, and energy is recycled to maintain muscle tone – but still the polar bears are awake, lest they miss some food, however scarce. As far as we know, this amazing stage of wakeful hibernation is unique to polar bears.
Nature indeed is an incredible innovator, and evolution is its mechanism.
If we allow polar bears to decline and perhaps become extinct, due to global warming and the melting of Arctic ice, it will be an enormous crime to future generations, who will not get to know this remarkable animal.
Innovate Your Business – Not Just Your Product
By Shlomo Maital
Psychologists sometimes use a ‘word association’ approach. Say a word. What comes to your mind first?
Say, “innovation”. Do you picture a gadget? A product? Most of us do.
But what about all the other areas, where fresh ideas are needed? What about the way you make things, the way you sell and market them, the way you motivate your workers – and in general, the way you design and run your business.
Business design and operations are, for many innovators, a dark corner. No light shines there.
Among experts, there is controversy. Guy Kawasaki, the marketing guru of Apple’s Macintosh, founder of garage.com, and author of Art of the Start, claims that creativity is vital for innovative products but when it comes to designing the business to implement them, stick to conventional white-sliced-bread methods.
We disagree. Business design innovation can bring bigger dividends that product innovations, which often fail. If you can build a unique innovative business design around an existing product, you can win big.
Here are four examples.
* Mobileye is a Jerusalem-based global company selling warning systems for vehicles, founded in 1999. Founders Amnon Shashua and Ziv Aviram raised money innovatively, unconventionally, by avoiding venture capital and appealing to a list of wealthy people interested in high-tech. Those investors proved far more patient than VC’s and enabled Mobileye to take nearly 8 years to develop its product, ready in 2007. Mobileye now has annual global sales of $350 m., and a profit margin of some 60 per cent.
* Netscape provided the world with one of the first browsers and its IPO in 1995 led off an enormous dot.com boom. Netscape’s business design was ‘give it away’ – charge zero for the browser. This innovation has since been widely imitated. Netscape’s browser was a powerful marketing device, used by millions, to advance sales of its software products.
* El-Op: this wholly owned subsidiary of Elbit, a market leader in electro-optics, uses a unique approach to innovation – bottom-up. Workers are encouraged to submit ideas to a website, and they are quickly passed on to mid-level managers and the head of operations. In many organizations, innovation is confined to product innovation emerging from R&D departments. This often leads to a false assumption, that ONLY the R&D department has innovation in its job description. At El-Op innovation is part of the job description of every worker. Moreover, research has shown that process innovation – innovation in operating procedures – is far more profitable and pays a far higher ROI, return on investment, than product innovation, because new products often fail when introduced to the market. At El-Op, many hundreds of ideas emerging from line workers have saved the company millions of dollars over the years.
* Toyota: This leading automobile company introduced just-in-time in its manufacturing process. Until then manufacturers stockpiled mountains of components in advance. Toyota asked, why? Why not have the components delivered just in time to use them in production? Why not eliminate costly component warehouses? The cost saving and efficiency gains were enormous. This innovation was based on challenging a conventional assumption.
What we learn from this is simple. Innovate everywhere, everything, all the time. Make fresh new ideas part of the job description of every worker. Listen carefully especially to workers who are “at the coal face” (where the coal is mined), because they are the ones who really know what is going on and what needs to be changed. Make sure that each fresh idea is acknowledged, read, studied, tested and either implemented or shelved for some future date, and that the person who proposed the idea is updated at every stage. And create an award ceremony for innovators. Just recognizing the creativity is often enough to stimulate it tenfold.
Life After Silicon:
The Age of the Cup-holder
By Shlomo Maital
Most of us are blithely unaware of how much we owe to a law – Moore’s Law, named after Intel co-founder Gordon Moore, which says in simple language that every 12 months or so, the number of transistors in a given area doubles. In a 1965 paper, Moore used 4 or 5 data points to show that this had happened up to 1965, and he said it would continue for the foreseeable future.
And it did..and how! We now carry more computer power in a chip barely 3 sq. mm. than the 1976 room-size supercomputer designed and built by a genius, Seymour Cray.
But what if Moore’s Law is about to be repealed? What if the future ends? As Francis Fukuyama wrote, in 1992, we are at “the end of history”; are we at the end of the history of silicon?
Yesterday I heard a brilliant lecture on this subject by Prof. Mark Horowitz, on Innovation in a Post-Moore’s Law World. Horowitz is a former Chair of Electrical Engineering at Stanford and is visiting my university, Technion. He delivered the annual Hershel Rich Lecture.
Here are some of his key points:
* As we move down from IBM’s path-breaking one micron chip in 1974, to today’s 20 nanometer chips, 50 times smaller, we have reached the limit of Moore’s Law, mainly because the heat generated by these tiny powerful microprocessors is very hard to dissipate. Cooling limits further transistor doublings. Mathematically: “computing power” = energy per operation x operations per second. If we want to boost ‘operations per second’, we need to lower ‘energy per operation’..and we’re reaching the limit on that one.
* Result? “In future, success will no longer be about technology development. It will be about finding the right applications of the existing technology”.
In other words: We have loads of computing power. Now we need to find ways to adapt it to create value. The so-called Internet of Things is misleading. There is no “internet of things”. It is in fact a broad collection of devices, and each device needs its own application, its own software, its own microprocessors, to enhance its value.
Horowitz noted that ITRS (International Technology Roadmap for Semiconductors) has for years done roadmap predictions of future technology, based on Moore’s Law. They have now stopped. No more roadmaps. The end of history.
What does this mean for entrepreneurs and innovators? In future, there will be a huge premium for IT engineers who understand the technology, but who also have deep sensitive knowledge of business, customers, preferences and markets. Only this will enable us to have life after silicon. I think every engineering school should have a required course on Startup Entrepreneurship. Silicon will no longer be a rapid-growth industry, it will become like steel and plastics, notes Prof. Horowitz — big, but stable.
Sure, there may be a huge technological breakthrough. But Horowitz notes, it is unlikely, because developing it will take enormous resources, more than governments can afford, and more than private investors are willing to risk.
Prof. Horowitz has a powerful metaphor. In future, he noted, successful products will include many “cup-holders”. A cup-holder is a place to put your coffee or soda, in a minivan or car. German carmakers started the idea. Today some vans have 16 or 17 such cup-holders. They are low-cost, and are highly appreciated, because they show the car-maker is aware of, concerned about, the lifestyle of drivers.
Innovator: Can you use existing computer power, to create small low-cost add-ons (incremental innovation) that create great value? Apparently, this will be our innovation lives – after Moore’s Law expires.
Innovation – by Marcel Proust
By Shlomo Maital
Valentin Louis Georges Eugène Marcel Proust was born on July 10 1871 and he died on the 18th of November 1922. He was a very eccentric French novelist, best known for his monumental novel In Search of Lost Time, better known as Remembrance of Things Past, published in seven parts between 1913 and 1927. His novel is not easy to read, but is highly innovative, on a par with Joyce’s Ulysses in its creative structure.
My wife and I visited the lovely Descano Gardens, in Pasadena, California, today, saw the amazing California Redwoods (they are so stately, so wise and dignified, it is really hard not to hug them — tree huggers, I understand you!!) …. and in the art gallery in the gardens, saw this quote by Proust:
The real voyage of discovery consists not in seeking new landscapes –
But in having new eyes.
Entrepreneurs and innovators simply see things others do not. But how do we acquire new eyes? By really REALLY looking at things. By asking questions about what we are seeing. By asking dumb basic questions. Why? How come? How? When? By taking the time to pause the reflect on what we see.
Let’s all get new eyes. Or, train the old ones to see new and wonderful things. Let’s try to see each other more clearly, and see new ways to help others with new ideas. If we all did that, or even if a few of us did it, the world would be more Proust-like.
Europe’s REAL Problem: Innovation!
By Shlomo Maital
Innovation: Only the Dark Green is “Innovation leader”
The EU has a lot of headaches – more than an ocean-full of Tylenol can assuage. Brexit, and copycat exit movements (including Austria, Catalonia, parts of France, eastern Europe); Greek debts that can neither be paid off nor written off (owing to stubborn German banks); a banking system that has an EU central bank but fragmented country-level banks, that can neither be integrated nor freed and opened; and many more.
Some of these headaches are being (badly) addressed. But one key issue is utterly ignored, as the Washing Post recently noted. * In an EU report, EU Regional Innovation Scoreboard 2016, it is claimed that:
The continent’s most creative and productive regions are in Germany, France, Britain and the Nordic countries. Southern England, northern Denmark, southern Germany and Paris are particularly successful — whereas Romania, Poland and Spain have disproportionately more regions that lack innovation. But as a political and economic union, all of Europe should be worried. Europe is becoming less innovative overall.
Why is this worrisome? One of the main points of a single market is that by creating a huge market, the world’s 2nd biggest economy, you open huge opportunities for entrepreneurs, whose path-breaking ideas can now reach 510 million people (EU), $20 trillion economy (2nd in the world) and per capita GDP of $37,000. But the opposite has occurred. Europe is becoming less innovative, as the report shows.
In Belgium, Greece, Ireland, the Netherlands and Romania, performance declined in all regions,” the report’s authors note. Germany — often considered the economic powerhouse of the continent — was also unable to improve performance.
I taught in France for many years. France has some of the world’s most talented creative engineers. But they don’t start businesses! Why? There are a hundred reasons. Risk, bureaucracy, lack of finance, rigid labor markets…
You can’t solve a problem until you face it. Europe is preoccupied with other problems, and is not even beginning to face its innovation problem. Alas.
* Rick Noack “Where Europe is most and least innovative, in 6 maps,” Washington Post. 2016.
Entrepreneurship: How to Overcome Barriers
By Shlomo Maital
Antoni Baszczeski, from Poland, has been taking one of my courses on Coursera, the on-line platform. (3 courses are currently running there, comprising a Startup Entrepreneurship specialization). In one of the Discussion Forums, Antoni notes:
“Some time ago, I participated in a “Design New Learning Environment” (DNLE) course project at the Venture Lab Edu platfom (@ Stanford University) : Rethinking Vocational Education in the State of Massachusetts:An Entrepreneurship Imperative for the 21st Century. http://www.slideshare.net/Gribbenslide/final-rethinking-vocational-education-in-the-state-of-massachusetts-1569106
We tried to identify Barriers to Entrepreneurship, and It looks that a majority of them are driven by cultural / mindset / attitude components. And they are root causes of the problems with creativity and innovation.
- Internal :
- lack of self-confidence •lack of critical thinking skills •fear of failure •passivity•lack of experience with fundraising and managing money •ack of credibility among adults that would fund the venture, due to the young age of entrepreneur
- External : •education •schools are providing exam preparation courses today and kill kids/students creativity and desire to innovate •entrepreneurship is not taught nor promoted in schools •there is a lack of understanding of the important role entrepreneurship has for future generations at the level of decision makers – Ministry of Education and Superintendents of Education •cultural – society (including parents and teachers) is not tolerant of young people who think differently than those that have gone before them. • bureaucratic and administrative – including lack of transparency •financing is difficult to acquire due to the lack of faith in the youths’ ability to execute the ideas
Antoni asks Forum participants about their own countries, and the barriers they perceive to young people starting and growing businesses.
So blog readers: What about your country? What do you think are the main 3 obstacles that keep young people from becoming startup entrepreneurs? What are the obstacles that keep YOU personally from doing so? How can these obstacles be overcome?
Thank you Antoni!
Innovator: Learn from Fermi!
By Shlomo Maital
Enrico Fermi 1901-1954
One of the key problems innovators encounter is validation. You have an idea. You love it! You’re full of passion to implement it. But, hold it. Take a moment or more, and make sure you’re meeting a real unmet need. Validate the need. Don’t be like so many entrepreneurs who “fill a much-needed gap”.
But how? How to validate? Talk to people? Sure. But will chatting with 1, 2 or even 10 people do the trick?
I’ve just learned about an interesting method that may help. (See: Philip Tetlock, Dan Gardner, Superforecasting: Crown, 2015; see Fermi-ize Your Problem). It comes from the Italian physicist Enrico Fermi, who died young at 53; he was an exceptional scholar, both a theoretical and experimental physicist (very rare to do both), and invented the first nuclear reactor, Chicago-Pile 1, in Chicago. He won the Nobel Prize in 1938, and has an element named after him. (Fermium, element 100, symbol Fm).
Here is how Fermi taught his students to tackle tough problems. I’ve slightly changed the context.
Suppose you want to create an Android app for tuning pianos. Suppose you want to sell it in Chicago. How can you validate the need? How can you predict how many you will sell?
Size of market: How many piano tuners are there in Chicago?
No possible way I can find that number on the Internet. Impossible task. Dead end.
Not according to Fermi. Take a hard question. Break it down into pieces. And this will enable you to come up with a very good guess that will be surprisingly accurate.
For instance: 1. How many pianos are there in Chicago? Well, the population of Chicago is 2.5 million. Let’s say, one person in 100 has a piano. (about 1 household in 25 or 30). That means: 25,000 pianos. But schools, etc. also have pianos. That could be, say, another 25,000 pianos. So there are 50,000 pianos. 2. How often are pianos tuned? Let’s say, once a year. Reasonble, right? 3. How long does it take to tune a piano? Roughly, two hours. Remember: each note has to be played, tested, checked. And a piano has 88 keys, 52 white and 36 black. 4. How many hours per year does a piano tuner work? Let’s say, 40 hours a week, for 50 weeks, or 2,000 hours. But take off 20 per cent for travel time: so, 1,600 hours.
Final calculation: Total piano tuning time: 50,000 pianos times 2 hours = 100,000 hours per year. Divide by 1,600 hours per tuner: You get about 60 or so piano tuners.
Does that comprise a sufficient market for your app? Chicago alone, no. So you need to be nationwide or global. Can you be? How will they know about your app?
This is called Fermi-ize Your Problem. Take a really hard problem. Break it down into pieces. Tackle each piece.
What if your assumptions are wrong? Well – if you’ve written them down, you can check them. So – instead of giving up from the outset when tackling a hard question, you break it into pieces and tackle each piece, and when you solve each piece, you chalk up progress and gain momentum. And move one step closer to an answer.
Innovator: Try to Fermi-ize your problem. Fermi did this regularly with his students. I think it helped him win a Nobel Prize. If you get good at Fermi-izing, you become more willing to tackle really tough problems..and change the world. And you may avoid investing years solving a problem no one really cares about.
Global Trade: More Information Than Goods
By Shlomo Maital
McKinsey Global Research points out a remarkable fact about global trade: “Soaring flows of data and information now generate more economic value than the global goods trade.” According to McKinsey:
“…. although the global goods trade has flattened and cross-border capital flows have declined sharply since 2008, globalization is not heading into reverse. Rather, it is entering a new phase defined by soaring flows of data and information. Remarkably, digital flows—which were practically nonexistent just 15 years ago—now exert a larger impact on GDP growth than the centuries-old trade in goods, according to a new McKinsey Global Institute (MGI) report, Digital globalization: The new era of global flows.”
So, what does this key fact mean for innovators and entrepreneurs?
Here are a few important implications:
- “Individuals are using global digital platforms to learn, find work, showcase their talent, and build personal networks. Some 900 million people have international connections on social media, and 360 million take part in cross-border e-commerce. Digital platforms for both traditional employment and freelance assignments are beginning to create a more global labor market.”
- “….not all countries are making the most of this potential. The latest MGI Connectedness Index—which ranks 139 countries on inflows and outflows of goods, services, finance, people, and data—finds large gaps between a handful of leading countries and the rest of the world. Singapore tops the latest rankings, followed by the Netherlands, the United States, and Germany. China has grown more connected, reaching number seven, but advanced economies in general remain more connected than developing countries. In fact, each type of flow is concentrated among a small set of highly connected countries.”
- “…over a decade, all types of flows acting together have raised world GDP by 10.1 percent over what would have resulted in a world without any cross-border flows. This value amounted to some $7.8 trillion in 2014 alone, and data flows account for $2.8 trillion of this impact. Both inflows and outflows matter for growth, as they expose economies to ideas, research, technologies, talent, and best practices from around the world.”
Bottom line? Innovator, wherever you are, if you have an Internet connection (true, 4 billion people, or over half the world, do not), you have access to the New World of trade in information data and knowledge. Perhaps trade in goods is lagging, owing to the Great Recession, but globalization of knowledge is alive and well.
McKinsey: Testing for Innovation
By Shlomo Maital
McKinsey Global Research April 2015 has circulated a lovely article on Innovation: “The eight essentials of innovation” by Marc de Jong, Nathan Marston, and Erik Roth. It includes a short self-test for you and your organization. Their key point: (often repeated in this space): “Since innovation is a complex, company-wide endeavor, it requires a set of crosscutting [and at times paradoxical] practices and processes to structure, organize, and encourage it.”
Here are the eight questions you should ask:
- ASPIRE Do you regard innovation-led growth as critical and do you have cascaded targets that reflect this? Yes/No
- CHOOSE Do you invest in a coherent time- and risk-balanced portfolio of intiatives with sufficient resources to win? Yes/No
- DISCOVER Do you have differentiated business, market and technology insights that translate into winning value propositions? Yes/No
- EVOLVE Do you create new business models that provide defensible and scalable profit sources? Yes/No
- ACCELERATE Do you beat the competition by developing and launching innovations quickly and effectively? Yes/No
- SCALE Do you launch innovations at the right scale in the relevant markets and segments? Yes/No
- EXTEND Do you win by creating and capitalizing on external networks?
- MOBILIZE Are your people motivated, rewarded, and organized to innovate repeatedly?
Score yourself and your organization. Six out of 8 or above? You’re an innovator. Five and below – you need to make some urgent changes.