Interactive Innovation

In a previous post, I had written about the notion of having to measure innovation. Innovation is typically viewed as being a highly fluid, creative and dynamic process, yet when done within a corporate R&D department, there is a need to place some quantitative metrics so as to be able to forecast whether an innovation that materializes has a chance of commercial success.

Yet upon reading the June edition of PM Network, which is monthly magazine published by the PMI geared toward the field of project management, the main feature article was on the 5 most important business trends anyone in the field of PM, or any business for that matter, needs to be aware of. The one that caught my particular eye was the trend of "Interactive Innovation". The claim is that the traditional R&D centers of corporations will become passe, as the so-called "crowd-sourcing" (I would also place the trend of "smart-sourcing" here as well) and social networking platforms of the new Web 2.0 ideologies take root.

As the article elaborates:

Tapping into that customer collective delivers powerful information to companies about market perception of their products—and where the Next Big Thing might be. In a survey conducted in December 2007 by the Marketing Executives Networking Group, 62 percent of the respondents reported using crowdsourcing to help them shape the future of their products. And while the majority of those surveyed rated crowdsourcing and consumer collaboration as an effective or highly effective approach to new product and service development, only 11 percent rated internal research and development staff this way.

Not so long ago, crowdsourcing was considered on the fringe, but these days it’s officially mainstream. U.S. computer manufacturing giant Dell, for example, uses its IdeaStorm website to identify new concepts and gauge consumer response to them.

Though I do tire of some of the hype and hyperbolie of the way in which Web 2.0 will change everything again (remember the dot-com hype and crash of the late 90s?), this is a real trend that will impact how companies do product and market research and it is going straight from a command and control structure of the industrial and maufacturing era to completely decentralized, collaborative and fractured information and concept driven era that we are now immersed in.

Thus what we have now is the need to balance the need to measure, predict and manage innovation, yet allow for the collaborative, dynamic and fractured nature in which it is now in part and will probably entirely be done in the future. It will be like one big, open sourced, multi-player interactive game of innovation that will be played between customers and companies for the benefit of all.

"Back of the Napkin" Business Visualizations

Found this very interesting blog called "The Back of the Napkin" by Dan Roam, which is same name of a book published by Dan on the importance of simple visualizations that are typically diagramed on the back of a napkin which can often times spawn new industries. One good example he provides is the simple triangle diagram developed on a back of a napkin by the founders of Southwest Airlines.

He talks about this in the video below:



This kind of "prototyping" of ideas in a simple hand drawn format is nothing new or novel, as I can cite numerous instances of "white boarding" that my colleagues and I engage in during meetings to flesh out complex ideas that cannot be described in words, and needs a diagram to flesh out.

In project management, using yellow sticky notes to lay out your initial schedule is (or should be) a common practice to build the initial WBS with your team members, so that you can re-arrange the stickies until it starts to makes sense before you formally build the schedule out in some software scheduling tool.

But as in all things in life, it may seem common sense but you sometimes forget and people such as Dan Roam pointing it out to you is a good reminder. Also not bad for individuals like himself to publish a book on it and get lucrative consulting gigs explaining it!

Guy Kawasaki on "The Art of Start"

I've always heard good things about Guy Kawasaki, and know he was responsible for much of the success of Apple in both it's early and later years. In addition, he is a noted author and venture capitalist and Angel investor for high tech start ups. So it was with good fortune that I came across the following video lecture:



One thing that is very apparent watching the video, is that the Guy is very articulate and intelligent and is no doubt why he held the role of chief evangelist at Apple. Though very inspirational, I'm very cautious of individuals who talk excessively of things like "innovation", "paradigm shifts", "out-of-box thinking", etc., because only a small percentage of entrepreneurial efforts result in the next Google, Apple, or Microsoft. For every one of these once in a kind successes, there are hundreds, if not thousands of failed efforts.

Nevertheless, its still motivating and inspirational to view, listen or read inspirational people such as Guy and makes me want to scratch my entrepreneurial itch... But, because of my past entrepreneurial pursuits and since I'm not getting any younger, I much more attuned to factoring and mitigating the risks a lot more then I was in the past.

I think its a matter of balancing motivation and inspiration with pragmatism and caution.

Everybody wants a cut...

Ran into this article reading my weekly subscription to The Economist about the rise of the secondary ticket market. It was especially interesting to me, because I lead the development efforts for a seat charting application prototype for Ticketmaster when I worked for an IT consulting firm, which was one of the more interesting projects I worked on.

At the time, StubHub was the major competitor and leader both in having the most robust internet seat charting application and market share for ticket exchanges. Things really heated up when eBay bought the company for $310M, which gave the company financial and infrastructure backing, equaling Ticketmaster, forcing them to change their business model and adapt to the new demand. As the article states:

This year ticket resales in America are expected to top $3 billion. Fans like online exchanges because many of them hold money in escrow, giving it to sellers only after the event to ensure that tickets are legitimate...

Even a company that once legally challenged the online-resale market is now on board. Ticketmaster, the ticketing agency in Los Angeles which sells roughly half of all tickets to big events in America, developed a creative legal argument in a bid to shut down resellers it felt were earning unfair profits on tickets Ticketmaster had originally sold. Buyers, the company argued, should not be able to resell tickets because they don't actually own the tickets in the first place: tickets are merely licences to enter a venue, and licences are not freely transferable. That argument did not prevail, and Ticketmaster now has its own resale subsidiary, TicketExchange. More than 50 professional sports teams have now negotiated a cut of TicketExchange's resale revenue.

And its on TicketExhange where I found an actual implementation of the seat charting prototype I helped build reside. Though the technology helped spur the growth of this new market demand, its really not as important as being able to understand and foresee how the technology can disrupt and change a market.

And it is this disruption that caused the music industry to hemorrhage so badly, and is now effecting the movie industry which culminated in the recent writers strike covered in the same magazine. With so much video content being siphoned off through non traditional media channels via the internet, the writers realized that they were not going to be adequately compensated for this loss, and the executives do not want to give concessions. The reality is that neither of them are going to win. As Patrick Goldstein, and LA Times writer states:

The WGA is fighting the good fight. But the glory days of "Norma Rae" are gone. Real change in today's world comes from the energy and ideas of entrepreneurs, not from labor negotiations. To take control of their work, writers have to cut out the middleman. Marshall Herskovitz and Ed Zwick, who just struck a deal with NBC to air their "Quarterlife" Web-only dramatic series, will reap most of the rewards, since they own the show. Not every writer has the clout of that duo to attract outside investors. But as the Internet has proved time and again, game-changing ideas are more likely to come from an unknown 26-year-old newcomer than a fiftysomething veteran.

THE models are everywhere today, especially in the music business, where economic upheaval has given birth to a new array of artist-entrepreneurs. Radiohead and Prince have both bypassed the soul-killing tangle of retailers and promotion people by releasing their latest records themselves (with Radiohead using the Internet as its distributor, even letting its fans set the price of the record themselves).

Unlike the music and movie industry, the ticketing companies seem to be aware that it was not in their best interest to try and fight against this force, but rather to find a way to profit from it.

What this indicates to me, is that industry executives are finally starting to realize this and reacting in a more appropriate manner, instead of ridiculously trying to sue some John or Jane Doe who simply wants to purchase and exchange goods and services, through a highly efficient distribution channel cheaply and quickly and on their own terms and conditions.

It has truly become a more user generated and customer focused marketplace, and its sometimes interesting to sit back and see how you contributed to it, no matter how small it was.

Rich Schefren's Business Building Presentation

Watched this interesting video on how to grow your business:



Initially I thought the presentation was going to be another "get rich quick" infomercial, but instead found a pretty engaging presentation on the pitfalls of trying to do too much of the work in running an online business. This of course, is applicable to on an offline business such as brick and mortar retail or other direct customer service business as well.

Much of the topics Rich covers were already covered quite well by the likes of authors such as Michael Gerber's "The E-Myth Revisited", a book I read some years ago which helped me tremendously to increase sales and profit while simultaneously cutting down my hands-on work load. The section in the video where he discusses the 3 archetypes of Technician vs Business Owner vs Entrepreneur comes straight out of Gerber's text.

My criticism of his presentation is the fact that you can only start delegating work and expanding your business AFTER you start becoming profitable and not from the first day you launch your business which is the impression Rich gives you in his talk. In all my business ventures I had to put in long, long hours and considerable work initially and only when I was able to achieve good revenue, sales and most important profits, was I able to start hiring people and delegating. You'll either need to start off with lots of cash initially or wait and build your business up first.

But the most interesting part of the talk was when Rich discussed the importance of project management skills for the business owner and entrepreneur. I'm currently studying for my Project Management Professional certification and it dawned on me in my studies, that much of the PM processes would have been helpful for many of the projects I engaged in such as store remodeling, marketing initiatives, and especially when I was building out two of the businesses I built from the ground up. That if anything is a major project!

This interesting series of blogs discusses the very same thing.