Filed under: Context for Innovation
Seth Godin has a thoughtful response to the wonderful Fast Company story “The Un-Tipping Point” by Clive Thompson.
Unleashing the Ideavirus didn’t spread because ‘important’ people endorsed and promoted it. It spread because passionate people did.
There are many ways to interpret the story, which covers Duncan Watts’s research, which discounts the roles of the super-influentials that many marketers try to reach to make their products tip rapidly. My interpretation is that marketers often over-simplify the definition of an influential, not recognizing that different people will be influential for different types of ideas or products. For example, Slashdot is a hugely influential audience for open-source software. It’s almost irrelevant when you have a new digital audio player to sell. This level of nuance has been left out in most efforts to create an influentials strategy, and that’s why the Tipping Point isn’t the panacea marketers hoped it would be. Just my two cents, you should read the story.
Filed under: Context for Innovation | Tags: advertising, facebook, godin, hotmail
Seth Godin today diagnosed Facebook’s problem as it grows up and gets overvalued. He says they don’t have an effective business model, because its advertising isn’t connected to the activities people use Facebook for, the problem with Hotmail in his mind:
When someone goes to FaceBook, they’re not looking for stuff. They’re looking for people. But people don’t buy ads, stuff does.
That’s a problem.
Any platform that makes ads a distraction or a cost is always going to fail compared to a site where the ads are a welcome part of the deal.
Yeah, not sure I follow, but OK. Let’s assume this is true. How, then, does Google make any money? Because, let me be honest, I have never looked at the ads it serves, however relevant, as anything other than a distraction or cost. Same with ads on TV, radio commercials, newspaper ads, streaming video, and everything else that includes advertising. I recognize that it’s possible to deliver sponsored content that is useful, but if it’s truly paid for and ad-based, it’s going to be a distraction, in large part because the frames people hang on advertising — we resist it instinctively.
Moreover, Hotmail’s inability to profit has more to do with the fact that it never created a business model appropriate to its use. Seth says that using opt-in newsletters (up to a thousand!) would have made huge money for Hotmail. I doubt it. Being a member of several non-advertising driven opt-in newsletters that I can never bear to read, I can’t picture how dozens or hundreds of the monstrosities focused on selling stuff would work better. Hotmail blew it because the company figured out how to get viral — the program provided a link at the bottom of every e-mail it sent to register the recipient for Hotmail. Next thing you know, everyone has a free Hotmail account. Those same principles didn’t get applied to ads — Hotmail was too focused on replicating itself. By delivering additional ads in truly tangential locations, Hotmail missed the opportunity that Gmail has nailed.
Facebook has its model down — every time I browse a friend’s profile, it seems to inevitably pop up details about local real estate. I haven’t bought a home yet, but I’d kind of like to, and that’s an ad extremely tied into my life situation and age. I’m engaged, I live in a high-income and high-priced market, and I’m always curious. I might never buy a home in San Francisco, but I’m interested in the idea. Only Facebook really gets that.
The problems aren’t the same — and neither are the solutions.
Filed under: Context for Innovation
Stay tuned at http://www.twitter.com/cultofmac .
Conrad and I are speaking on Wednesday morning, but there are lots of other interesting folks there. I’ll keep you posted and share my thoughts…
Phew. On the couch at my apartment, wiped out from the first full day of learning, thinking, and occasional (no, copious) partying at Connecting ’07, the IDSA/ICSID Congress in San Francisco.
Synthesizing such an absurdly large undertaking (there were literally up to 12 sessions running at a time this afternoon) is impossible, so I’m going to keep this post brief and point to my biggest takeaways.
- Great data visualization can show the world as it really is, not as we imagine it to be. Hans Rosling of Gapminder officially blew my mind this morning. Click through to do likewise.
- No one has good answers around sustainability. I attended multiple lectures today about using design to effect change around sustainability, and they all left me unsatisfied. Some were very materials- or efficiency-oriented, others were focused on depressing statistics, but no one offered real hope for change. Alex Steffen from WorldChanging was an incredibly inspirational speaker, but his presentation didn’t provide concrete direction for designers. Shared property business models work very well for certain kinds of goods — cars, videos, homes — and really poorly for others: computers, TVs, furniture. They aren’t everything. And he implied they were. I hope someone has something more actionable on sustainability to say this week.
- Students are awesome. I had the pleasure to meet a young man named Joshua from Auburn’s product design program. He was so inspired and excited by everything around him, and he was also incredibly professional and put-together. Reminds me that I need to up my own game sometimes.
- Design is not design strategy. It’s easy to believe, based on the current discourse, that design is a unified field that applies to everything from the very front end of exploration to the final look of packaging, the ad campaign, and logos. Having talked with a lot of other people at the conference, we come from very different places. They really value the final artifact and the aesthetics above almost all else, and I come from a position about growth and moving the needle for the business — through the products, services and businesses that it gets into, the platform strategy, the overall portfolio. Just interesting.
- Designers view intuition differently from anyone else. I was at a good presentation this afternoon from Susanne Gibbs Howard of IDEO. She’s an anthropologist, and shared some case studies about the companies current process, which began with a fairly familiar process of ethnographic research, but then took a very odd turn. Essentially, designers at IDEO have complained that doing Human-Centered Design impinges on their creativity. They would rather be designing. So she’s created a practice called “Sacrificial Concepts” to bring design back to the front end and then gather feedback from people out in the world based on those concepts. We work this way, too, though we call them Pre-emptive Solutions, and the point is to surface assumptions about the area we’re exploring and move past them, not to constrain the area being considered. This Sacrificial Concepts notion was described as adding intuition to Human-Centered Design. I have to say, if you think intuition isn’t critical to Human-Centered Design, you have little business doing it. Intuiting people’s needs and walking in their shoes to know what’s a good idea and a bad idea in their world? The essence of good design in this realm. Just because the artifact doesn’t necessarily just represent whatever seems like a good idea to a designer at the time doesn’t make it lacking in art.
Phew. I’m bushed. Good night, and I’ll be back tomorrow!
Filed under: Context for Innovation
Chrysler just lured away James Press, the president of Toyota of North America. It’s a huge coup in terms of its symbolic meaning — Toyota’s growth under Press has been stunning. He’ll be vice-chairman and co-president of the new Chrysler Group. It’s certainly the first hire that new owners Cerberus have made that give me hope they won’t just make the company lean as heck and dump them.
On the other hand, hiring Press is a Hail Mary from the brain trust at Chrysler. Bringing in a rival’s chief executive signifies low confidence. A lot of high-profile CEO and business leader hires go poorly — like new Chrysler CEO Robert Nardelli’s record at Home Depot — when they come from fundamentally different cultures of business.
This is my concern about Press: Toyota has grown through Kaizen — incremental improvement. Chrysler has always been at its best when making interesting cars that really resonate with people, like the 300, the PT Cruiser or the original minivan. If Press tries to fit Chrysler into a Toyota mold, the results won’t please anyone.
But fingers crossed, eh? I’ve got a huge soft spot for Mopar muscle cars.
Filed under: Context for Innovation
Photo by Stephanie Kuykendal for The New York Times
A week ago, the New York Times profiled William A. Wulf, a former president of the National Academy of Engineering who wants to restore the American culture of innovation. It’s a good profile, and a conversation we should be having, but I have trouble getting inspired by it, in part because Wulf seems to be under the impression that all innovation is driven by engineers. And while engineers are very good at solving problems, they often aren’t the best at figuring out which problems to solve, are terrible at marketing, and don’t tend to approach individual problems as small reflections of a systemic riddle requiring an approach that goes beyond a single solution.
Wulf has a fundamental bias toward engineering that is causing him to explicitly focus on their needs, even to the exclusion of pure scientists and other researchers. He also likely wouldn’t distinguish between inventions and innovations, which would be a point of departure. Inventions are anything that you create using new knowledge. Innovations are inventions that have a social or economic impact. In this light, the American moon landing program was a whole series of innovations – a lot of space technology became American consumer and commercial goods. But the hovercraft, nearly as complex to make as the whole of the space program, still doesn’t have a real reason to exist. On the other hand, disposable diapers were a major innovation with wide-reaching impacts, both positive and negative.
Engineering is really its own thing, and it’s pretty far outside my domain. Plenty of great innovations come from engineers, but someone has to tell them what they’re working on and keep a focus on people’s needs and the big strategic picture, which are more critical for making sure innovations find their audience. Plenty of great engineering ideas never got through corporations because the stage-gate systems were set up to reject ideas that were too new, for example.
I think it’s even a little naive to blame a cut in R&D budgets for a perceived lack of innovation. Apple’s R&D budget is currently half or a quarter of what it was in the mid-1990s, and everyone’s all over their jocks right now as innovators. It’s rarely just about dollars spent – it’s almost always about which questions to explore, which problems to solve. That’s why Gillette’s research lab on shaving yields huge returns all the time, while Bell Labs and Xerox PARC never made any money for their parent companies.
On the other hand, this is hardly the first article I’ve seen that is concerned with a culture that has forgotten how to innovate. What’s going on in the U.S.? Why are we freaking out right now, at a time when American companies are doing stuff here that we couldn’t have believed possible a decade ago? What is at the root of our fear?
Filed under: Context for Innovation
When people think about innovation, they tend to take a very technology-centered view of the world. If an idea could have been executed 50 years ago, it just isn’t innovative, so far as most of the population is concerned.
Even otherwise rational companies who should just be creating new ways to grow often find themselves caught up in such hype: “This one product will save the company – and its specs are really large numbers!”
But as Jess McMullin notes, a lot of the time, innovation looks much more humble – it can mean taking a good idea from one context and putting it in another one. He calls it Sideways Innovation: Finding a new use for an existing idea in a new market. And he’s worried that not enough companies try it. I disagree. Plenty of people do Sideways Innovation – but it doesn’t sound as sexy as designing something from scratch, so we don’t hear about it as much.
Great examples of this phenomenon are all around us. The pair of Shure headphones in my ears right now are based off of professional in-ear stage monitors. The great Crest SpinBrush in my bathroom was developed using the same technology as the CapToys SpinPop way back in the day. The entire Starbucks empire sprang from the introduction of centuries-old Italian coffee culture to the United States. I would argue, in fact, that Sideways Innovation is incredibly abundant in the business world, but it doesn’t make for great stories in the press most of the time.
After all, the SpinBrush has been a tremendous success for P&G, as has the Swiffer, another product the company found elsewhere in the world (in this case Japan), but the acquisition, launch and iteration of existing products doesn’t sell magazines or get design consultancies work. I don’t know how many times I’ve heard experienced designers tell me that IDEO came up with the Swiffer. They didn’t. Continuum did. And even then, it was an adaptation of an existing product P&G bought the rights to. The consultancies have done great work extending that product line, but the essential insight began overseas.
But none of this fits the story about innovation that Americans want to hear or that the media wants to tell. Too often, we expect innovation to be about Americans inventing things and being smart. It’s a story that makes a rough economic period tolerable.
What we know down deep is that innovation is a global concern, and what really matters is sustainable growth, not wacky inventions. But until the American public is ready for a serious business story, the press is going to delight us with novelty, even if other methods for creating new ways to grow work better in certain contexts for certain companies.
Image via Spinbrush