Tuesday, February 11, 2014

Why its all about Bill Buxton

Check out this great MSN video - Bill Buxton: advertising’s future technology

In 2009 I was working with Microsoft advertising division as a consultant helping them create and sell products to media agencies. I was lucky to get the winning seat at lunch at their imagine conference. Typical advertising people chatting about advertising stuff, I was one of them so I fit right on. Until Bill Buxton comes along and says something that stuck with me ever since.

'If you want to know what is going to be big in 10 years time then look back to what was created 10 years ago.'

He said eBay was the best place to find what will be big. He should know as he has one of the biggest collections of technology objects known to man. On the day he pulled out a bunch of touchscreen technology created in the mid 80s.

5 years later Im half way through a masters in innovation and one comment I saw in the video above from him is the basis of my view of innovation.

' ….anything that is going to impact your life in 10 years is already 10 years old now that changes the nature of innovation from one of alchemy, starting some great idea out of scratch to one of prospecting and discovery, insights and relationships'

thanks Bill

Sunday, February 02, 2014

Why Google is the ideal innovator

I have been researching innovation for the past 18 months as I have been doing my masters in innovation management at Central Saint Martins in London. A lot of people, friends and companies have been asking me what is it all about so I thought I would give an example combining some things Ive found as well as 14 years experience in advertising and personal obsession with technology and subcultures.

When I started this blog 8 odd years ago it was a scrapbook of thoughts to throw out there converse with others and hopefully build on or help articulate my point of view. I have been particularly bad at using it during my masters but I thought I would return here to try to simplify it all especially in light of Google’s recent spending spree which everyone is questioning. Here we go

The simple concept is that innovation is a strategic tool for growth. There are other ways to grow such as expansion into new markets, resource optimization for efficient delivery of you current market but it seems that innovation tends to get the headlines. What type of growth depends on where you are coming from financial for companies, understanding maybe for governments (I understand I shouldn’t smoke) or behavior change (social innovations if I buy a RED iPod money goes to Africa). There are a few quick categorisations of innovation we need to clarify first.  Growth for today is known as sustaining innovation it has a more short term approach. Growth for tomorrow is known as disruptive innovation with longer term metrics looking at what could potentially throw the market dynamics as they currently stand. Innovation as a process for me comes down to three simple steps Identify, Create, Exploit

Identify: is to find opportunities. In the short term they tend to be insights about the customers needs. In the longer term it is about patterns that lead to future needs.
Create: a product or service that addresses those needs. Then test, iterate and validate the product / service as well as the customer need.
Exploit: is to drive market adoption understanding.

Lets have a crack at how it works using Google as an example.  

How do you innovate for today.

The concept of sustaining innovation is the idea that you take an innovation already created (search) and you add additional benefits to it to gain more revenue from an existent market or customer. This approach consists of a lot of the innovation we currently see. Product extensions, add ons etc. An example would be that Google created google+ not to ‘disrupt’ or steal audience from facebook they did it purely to gain more data for their search terms to make more targeted ads to gain more revenue from their current audience.

Google Identified an insight using data from current customer’s past behavior that the more personalized search suggestions are the more likely people are to click.  Then Created a new platform, Google+ to gain additional data from their current audience’s online behaviour and interests. They then Exploited that platform through different approaches such as Chuck Hack a collaboration between Google Creative Labs + Converse + other creative companies including TechnologyWill Save us (in an act of transparency I am an Investor and advisor for TWSU and HirschandMann who helped with the project). This campaign looked to push smaller creative subcultures (or communities) to use the platform in a fun way.

In summary sustaining innovation is a pretty simple approach. Identify insights using data from past or current behavior of your or other current customers in your market. Create something new that offers more benefits to a current product but enables you to gain more revenue. Google have done this over and over again, maps, gmail, android, chromebooks etc . Last time I looked Google’s quarter financials on 1st of February were up 17% so the short term sustaining innovation approach for growth seems to be working for them.

Another example I give is O2’s current Priority campaign. They Identified an insight that its current customers and customers within their market spend considerable money on entertainment. They Created Priority which added the benefit of early tickets to top events at O2 places as well as others to drive more usage from current customers as well as switching from others in the market. Then Exploited it with campaigns for Lady Gaga, English Rugby Union team etc.

How do you innovate for tomorrow.

Here comes the fun more interesting part. How does one innovate for tomorrow ? Everyone is questioning Google’s recent behavior of buying NEST that makes thermostats, Artificial Intelligence companies and what did they do with Motorola. Lets look at our model in the future innovation sense. ICE

Academic and ex editor of Harvard Business Review Ed Levitt came up with the concept of the marketing myopia in 1960s which is the idea that companies create products and technologies that don’t link closely with the wants and needs of their customers. The reality is technology advancement is so fast companies can create the next technology way before any customer even hints they need such a thing. Therefore it all becomes a matter of timing.

A number of years ago I met Bill Buxton Microsoft’s head of design research (hilarious guy reminded me of Doc from Back to the Future). Bill left me with something I will never forget. If you want to know what is going to be big in 10 years, look back 10 years to what was invented then. He explained the concept of the Long Nose of innovation he found in his research that from invention to market traction took ten years. He has one of the largest collections of technology objects in the world as validation for his research as what he found is that it takes a number of years for refinement and augmentation of the technology itself, then there is the need for market traction. He said his job at Microsoft was to go and find all the awesome invention in house and shrink that process. Surface was their first example of shrinking that process they cut it to 6 years. One approach to innovation I believe is the use of engineers who invent, refine and augment technologies to make sure they work. The designer / engineer combo takes that technology to the next level Creating (or designing) something that is user friendly. It is then the job of the marketing or other teams to Exploit it to the masses or gain traction through understanding their needs.

The problem with innovating for tomorrow is people don’t know what they want in the future and past data will not project 5- 10 years into the future. So identifying insights about peoples current articulated needs like I explained in sustaining innovation from online behavior, surveys, buyer or economic data isn’t sufficient.  There needs to be a more interpretive method that looks to people's future unarticulated needs. You need to Identify patterns that could drive those future needs. Levitt also asked an interesting question of train companies at the time who were later disrupted by airplanes. Which business are you in ?Are you a train company or a transportation company ?. So the question for Google is what business are you in ?? Search or Data.

Google is a data company and Google+ is just one way they show that in the short term. In the longer term they have identified patterns in the concept of the internet of things and the data it will create. Currently the only way the average person believes Google gets data is from the screens we interface with. PCs, Laptops, Phones, tablets which are closed interfaces behind the box we make changes to by touching screens, keys or our mouse. Google (as well as others) accumulate data from our online actions but that is only the beginning of what is available. Every action in the real world we do more and more will accumulate data. The term ‘smart’ is not new you may have seen the Smart Cities concept from IBM or smart fridges from Samsung or quantified self with market adoption of wearable technologies. This is the idea of interfaces everywhere creating data. Top IT analyst company Gartner forecasts 26 Billion devices connected to the internet by 2020. That is 6 years away.  So what did Google do?

Google Identified the pattern of the growth of devices creating more data and the need for more advanced computational methods to analyse all that data. Google was built off the back of an algorithm that made data into something of value for people. The idea of “Big Data’ is being thrown around businesses and governments as the future. The bigger question is who has the computational power to deal with that sort of data ?? Artificial intelligence has already shown promise in turning large amounts of data into value. You’ve seen Minority Report, the new film HER gives you a more emotive view of the concept. (If you want to see a fun example of AI objects reacting back to humans check out my friend Katrins conceptual piece ).

Secondly they now have one of the best design / engineering teams in the world in house to start to Create (or design) the best interfaces possible to create more data which is what Nest currently does. It is a way to create data about someones home and their energy usage. Google’s Project X Created Google Glass as a new data interface that they are testing and evaluating whilst testing an Exploitation approach through a game of scarcity. Have you got one, look at that weird guy on the tube with one. Have you seen the stupid things they have come up with. The reality is they are working to help translate what I have found in my research in Exploitation phase as a language gap between great technology that is created and great technology that is adopted. Have you ever seen a technical person try and explain what their technology does to someone who isn’t technical. My research has found that technical people will talk about what the technology does, early adopters are more interested in what the big change does for them or in other words the change in benefit, the early majority are only interested in how it makes their lives slightly better the late majority and laggards are sheep and will just follow. Giving the product to people to use and build on is an interpretive method that shows Google not just being myopic in its engineering or design approach that focuses on making a great product to a more interpretive approach to understanding what the customer wants to Exploit it at a later stage. One thing that has emerged from the Google Glass experiment is when people give the heart symbol with their hands in digital photos and Google's attempt to patent it. They are trying transfer a technical language images with data to a more human language where a human action becomes like a #.

What I have also found in my research is that you do need a completely separate business to create disruptive innovations for future use. As their metrics of success and timeframe  are much different to sustaining innovations. An example would be O2’s Priority vs O2’s disruptive innovation giffgaff. Priority’s first year targets were 1.5 million new customers paying £60 pm whilst giffgaff took 4 years to get to 1 million subscribers at around £15pm.  Including disruptive innovation in your daily business process will only get all projects cancelled before they identify an appropriate market and understand any value that could be created in that space. Do you remember when Sergey returned to Google shut down all those additional projects this was because they sat within the day to day business (some weren’t that good also). But he didn’t stop their innovation he just realized the need to separate short and longer term, sustaining and disruptive. Google X became the future space with different metrics, more money and more time. (also being public about the future innovation pipeline doesn’t hurt your share price even if no one understands any of it)

What is the role of Motorola ? Google has sped up the 10 year process by buying the already made patents or technologies. Keeping Motorola would’ve led to an expensive war in an already ridiculously competitive smartphone market (although Motorola teaming up with PhoneBloks is the future of technology and an example why I invested in TWSU but thats for another post). They will pass those patents over to Tony Fadell his new hardware team from NEST and Google who will start creating user driven products as interfaces for the world to add more data to the machine. Combine that with best computational technology or artificial intelligence to analyse the data to turn it into value. Google will then use what they have learnt from previous Exploitation methods from Google Creative Labs and others things across the world to begin to drive market traction for products.

Innovation is a strategic tool for growth that must look at identifying, creating and exploiting for today and tomorrow. Google have done a great job using previous and current data to Identify insights to Create new products and then Exploited them in fun to gain more data ways to sustain their current innovation of search. It is hard as today seems much clearer, when tomorrow is such a haze. Google's future pipeline looks even brighter by Identifying the pattern of IOT devices as new interfaces to growing available data. Gaining the technology to analyse that data and putting the best team together with a bunch of inventions to Create the future interfaces of data and then no doubt by then Google Creative Labs and other departments of Google will take Exploitation to the next level. They have created a very strategically strong duel approach to innovation that has an eye on the customer of today but never takes their eye of the customer of tomorrow.

Next post I will attempt to look at Amazon and why they are a bit one sided as they only focus on Disruptive or future innovations not sustaining ones in the short term.  One easy check is to look at their growth in revenue vs their loss in profit %'s in the past 5 years. 

Tuesday, October 22, 2013

Why hipsters are important for democracy

How can you not love that video. I have shown it to friends from Hackney to Kreuzberg to Williamsburg and everyone gets a chuckle. Everyone loves to laugh at the hipsters but I think we need to look past what they wear, their attitude and their constant screaming for attention and think about why its important for democracy.

Its important because hipsters in their truest sense stand for the counter culture. A culture that stands up and says no I will not stay in on sunday night and watch a bunch of untalented opportunists sing to a crowd of people on their phones wasting money texting through votes. No I will not spend my life following whoever the next ridiculous reality TV star is, their clothing line, books and exercise DVDs (other than themselves on youtube obviously).

This is important for democracy as their drive is to always go against the mainstream. In whatever dramatic fashion they do it at least they provide a counter voice.  Hipsters that are worth their weight in gold are the designers, musicians, directors, artists and writers that actively engage in culture, constantly questioning it and using their talent to create alternative views to the mainstream. They have created their own media to express their point of view being fed by their creativity from events to walls to social media to alternative publishing.They arent sitting at home like the majority of the country  amusing themselves to death as Neil Postman media critic and cultural theorist wrote about in the 80s'. He believed the move to television as a medium would cut off a major part of knowledge creation that the reading of text was vital for and would lead more intelligent debate. He believed that television's strive to amuse its audiences was in fact an amazing stroke of oppression. I guess that is why the Daily Show has hours upon hours of material from their friends at FOX 'the home of amusement'.

Any group that gains popularity will create an entourage of hangers on, which ruin it for everyone. The ones that can grow an awesome moustache, wear skinny jeans, have an amazing quiff and critic everything about life with no skill to share. (Im a bit of a hanger on... dont do the moustache, dont fit into skinny anything but I do have the skill of analysing them and writing about it ..ahah) But look past those hangers on to the culture that is created. The culture that is created around the east of London is something else with examples like the amusing food and bar scene continues to be driven by this counter culture.  No you dont need a huge restaurant space on the strand. We just need a food truck thanks or a hole in the wall. No I dont need to dress like a page 3 girl, pay £30 pounds to get in and flirt with some rich out of towner  to buy me a bottle of vodka. Id prefer to here some music in the basement of a pub. No I dont need to get my beer from some far off place I can brew it around the corner thanks. No I dont need to pay some exuberant amount to see art in Regents Park. Id prefer to go an old building thats has free beer on a thursday.

With every culture there should be a counter or in fact I dont believe you can say you have a democracy. If we are supposed to be practicing the free and equal practice of political self determination then I want someone to throw in an alternative view to the blatantly obvious occasionally. Surely only one point of view (or two between the leading two parties) is not enough to open up a legitimate debate about how a nation should facilitate the appropriate ways to maximise the lifestyle's of their citizens.

So next time you see a hipster dont just laugh and walk away. Smile ask them about a social issue you find interesting. Even if they are a hanger on they will probably have an alternative view they copied from their real hipster friends and if that doesnt work.

Then its not all bad if 'we all make synth'

Wednesday, September 18, 2013

If you want insight, get out of the building

One of the things I found weird working for different agencies and with marketers is that they always talk about understanding the customer. Yet they never leave their building to truly experience their audience. A pitch comes in for an FMCG brand and the first thing they do is organise focus groups. What about just walking down to the local supermarket and just standing in the aisle for a while.

Quite a few years ago now I did a brand planning course where at the end we had to create a strategy, creative brief and creative concepts for a chocolate bar that had no fat. I did some data analysis and detailed that the bar should go after the chocolate bar market not the health bar version. I also did two particular pieces of research that stood out. I walked around a supermarket watching women in the chocolate aisle. What I found was that women would be less likely to grab a chocolate bar in the aisle and more likely to grab it closer to the counter. This insight around 'shame' felt like fertile ground. I then created some concepts and set up a movies night at my girlfriends house with a group of girls in the target audience, the perfect environment for chocolate. I let my girlfriend run the session as I thought the depth of understanding of that 'shame' would be harder to say to a guy. They not only validated a concept but built on it making the language more feminine and more specific.

I topped the class on the assignment and the teacher highlighted the amazing effort I'd gone to mixing a strong analysis of the market and a deep understanding of the audience. Building it all into a great concept and good creative work. That act of observation, creation and validation was very simple and all of it cost me not much more than a couple of chocolate bars and making dinner for my girlfriend. Yet I've sat through piles and piles of expensive research and got very little insight to that depth that can truly be successfully used for any advantage.

If you are in the business of understanding people why not get out of the building and actually experience those real people. There is something very human and empathetic about interacting with people in reality not just reading about it. Not just treating a situation like a test subject just being a human being in a human space. Then having the ability to truly pull out what matters to whomever you are studying is still a skill that is hugely undervalued.

Wednesday, July 17, 2013

Innovation could learn alot from bike messengers

I think innovation could learn a lot from bike messengers. The constant speed in which you work. You never have a chance to really stop. Also you pick yourself a line and think its safe and the best option until a number of different barriers and issues get in your way. I love her example of zooming out, but zooming back in on what matters.

Tuesday, July 09, 2013

Prediction or Precaution

One thing I have noticed in reading theories and engaging in uncertain situations is that we tend to spend our time trying to predict outcomes which inevitably don't come to fruition. The growth of risk analysis has become a necessity of business today in any way shape or form. But the thing that gets me is that supposedly we have the ability to predict the future. You've all been a meeting where a group of highly trained professionals have done all the analysis and stood up their with confidence to say if you did this .. This will happen. Look the data told us so. Yes but that is from the past and how do we know that it is right for the future.

A lot of the time it never ends in what we assume either good or bad, cautious or overtly positive . Maybe we should try to assess the risk beyond just using data from the past with a right or wrong, black and white type attitude. Why don't we look at possibilities, not just definite outcomes. Looking to create scenarios of possible outcomes using our imaginations a little more and functional data from the past a little less makes a team more open to outcomes that weren't expected. It will automatically broaden your anticipated outcomes. This can lead to a broader more cautious approach that enables a team not to focus on being either be right or wrong according to predictions. But to be agile enough to adapt to whatever outcome to successfully exploit the situation. Not sit there scratching their heads wondering where it all went wrong . 

Next time you are sitting in a room planning for the future. Just throw in a couple of … what would we do if this happened ??. Pick the two extremes, no one bought this or we have people lining up for months. Then throw in a weird one like 'Our brand ambassador got busted on a drug charge'. At least having the conversation begins to work towards developing your abilities to adapt to unpredictable situations not just be right or wrong depending on past occurrences. 

Wednesday, June 05, 2013

What is the point of art school ?

'Creative Curiosity is always intellectually restless, its always 

lateral against the linearity of rationality' 

Jeremy Till, Pro Vice Chanceller of Central Saint Martins

I have been attending Central Saint Martins doing my masters in Innovation Management for around 9 months now. I have been particularly bad at writing here. Which is ironic as a key thing they continue to teach you is to reflect on your work which was kind of the point of this blog 7 years ago. One thing I have particularly loved moving to London and now even more so at CSM is the creation of cultural capital. 

Art, design, film all this cultural capital that expresses itself in a multitude of ways is one of the reasons I would struggle to return to Australia. Everyone jokes about the lack of culture in Australia but it was never more evident than when I showed my father an article in Monocle magazine about CSM and a project I was working on. 'Oh you go to an art school'. Its what a lot of people think. But I feel the opposite. I was educated in a linear rationale way that I never understood. I always struggled with a world that was created around assumptions. Why do we do that. Just because we do. That makes no sense. I used to say to my father when I was younger. I was exceptionally curious and that has never faulted as I got older. I then got to the UK where a huge history built a structure of even more assumptions. But the interesting thing was that their was an alternative. An alternative for people that didnt just want to live one way just because. That wanted to explore beyond that for themselves but also for a greater purpose.

The problem now is that the opportunity and environment in which you are encouraged to open up your point of view is being controlled. It is being held back by those rational people who dont see the value in art. CSM ran a conference recently called 'Whats the point of art school?'. It would take me too long to write my point of view and to be honest its still a prototype. But I have seen the value not just for myself but for the wider construct of the world in which we live. I think a key component of this argument is talk in the language in which the rationale's will understanding. I have been looking at the list of Alumni from CSM recently. What if you picked the top 100 CSM alumni and compared it to a business school like Warwick. Then compared the value they have brought to the economy but also other elements of society. Also look to minus the bad elements like money pulled out of the markets. This maybe would start to see that in order to get out of the mess that the rationales got us into. That the business school model of looking at previous casestudies to better establish what to do doesnt work.That you are going to need some pretty bloody creative people to get us out of it.