Mental Broadband

I really like good metaphors. Here is one from Tom Haskins comparing our minds to laptops and the internet, where our conscious mind is the laptop and the 24/7 internet is our unconscious mind.

Most conscious minds rarely access the unconscious mind for solutions, inspirations, and intuitions. They are like laptops that search their hard drive, but do not go online to search the Web. The unconscious mind can guide us into perfect timing so we are in the right place with the right idea in mind to make the right difference. If we ask, we can receive what we need to know, learn what we need to do next and change what we need to upgrade.

Very thought provoking. Many people in business only ever access their own hard drive. Entrepreneurs and innovators strive to get to this level of thinking, but struggle in getting there. Tom provides some ideas in his post on knowing when to access, but to me the hard part is knowing how to form the question to run the correct search? First, I believe it is about finding your creative place. Second, you need to surround yourself with others at work or outside of work who are also trying to get to this level of consciousness or are possibly already there. Third - give it some time to process. The unconscious is vast, and it will take time to draw some conclusions.

Innovation at the Intersection

I have referred to the Medici Effect in a couple recent posts (here and here), and figured I should post a review/summary of the book. The term Medici comes from a banking family by that name in 15 century Florence Italy. This family and a few others began to sponsor creators from a vast array of fields, which caused people with wildly different skills to come to Florence. Their they found each other, learned from each other and broke down barriers between disciplines and cultures. Together they created a new world based on ideas generated, which became known as the Renaissance.

The author Frans Johansson, does an excellent job looking at intersection innovation and how it can be applied to todays innovators. For me the difference between a good book and a great book is how much it keeps me thinking after I put it down. This was one of those books. I kept a notebook with me as the concepts actually caused me to think about things differently generated new ideas on concepts I have been mulling around in my head.

Everything is connected in one way or another. The trick is seeing how these things connect and how to use it. It actually goes against the grain suggesting specialization in a given field is not the best way to produced breakthrough innovation. Field specialization will produce directional innovation. In many fields directional innovation is drying up. All the relevant variables have been combined. We actually have a great chance of achieving ground breaking innovating by not specializing in just a single field of study/work.

If you have two different fields (A, B) and each field has a number of variables to play with your innovation potential in each field is

Innovation potential of A= x1*x2*x3*xn
Innovation potential of B= y1*y2*y3*yn

If you take two different fields of study and combine all the possible variables, your innovation potential has grown dramatically. You now have A*B possible combinations many of which have likely never even been thought about together.

Its not that you can just know a little about many fields - you still need to have some level of depth, but the key is applying concepts from one field to another, and then another etc. How do you do this? Well the book has many suggestions, but one simple way is to begin exposing yourself to different industries. Possibly take a job in a new field, or minimally just studying across different fields and begin to draw parallels with your current specialty areas.

Once change you will see on this blog going forward is that I will begin injecting books into my reading list that will hopefully expose me to other ways of thinking, learning and fields with which I have less knowledge, even though it will likely have nothing to do with my current job or expertise. My current reading list will start to contain titles that don't typically blend with my standard business titles.

In the meantime, if you are looking to find new ways of stretching your thinking, pick this book up and read it. I guarantee it will spawn some creative thinking.

Failure and Innovation

Failure in most companies is a bad word. Some more innovative companies have leaned that failure is part of innovation, but most of what people hear is fail quickly or don't repeat the same mistake which are both good things to keep in mind, but not the whole story. Entrepreneurs are acutely aware of the concept of failure, and it is often equivalent to a badge of honor in the startup community. What else should an innovator (company or person) keep in mind with respect to failures?

Frans Johansson in the Medici Effect says that mistakes and false starts are part of the process for making ideas happen in unknown spaces, and must be factored into the equation in three ways:

Try ideas that fail to find ideas that won't
So how do you create that type of environment?

• Its not just enough to be accepting of failure, but output whether generating success or failure should be rewarded.
• Failure to execute ideas is the greatest failure, and be punished
• Be suspicious of low failure rates. Maybe not enough risk is being taken or people are hiding mistakes
• Hire people who have made intelligent failures, and let others know about it

Reserve resources for trial and error
One thing to note about innovations in new directions are that many assumptions you make during development of the idea will be wrong. This is the primary reason why many internet startup companies in the late 90's failed. They thought they were going to get it right the first time. You need to keep an agile mindset in your team and company.

• Be prepared to change your plan of execution
• Give yourself the time for several attempts
  
• Spend your money carefully and try and keep reserves for more than one try
• Be extremely careful if your reputation or goodwill is riding on success the first try

Remain motivated
Probably the most important, but you must find ways to keep motivation high. Essentially you need to build passion in your business.

• If intrinsic motivation is high, and we are passionate about what we are doing, creativity will be free flowing
• People who are driven to perform do so based on internal drive - not external incentives. They want to do a good job.
• People in new innovation spaces must believe that they will get the reward they deserve for their efforts, even though at the start no one really knows what the reward will be.
  

Clearly it is important in new innovation spaces that failure is expected, but if you are in this space, make sure it goes deeper than that. It must be supported with the appropriate culture and incentives, allong with appropriate expectations, planning, resources to have many 'do-overs' in order to find the right solution.

Using 'Free' To Grow Your Business

There is a series of posts on techdirt (see list at the end of the linked article) that have culminated with a summary article about using the concept of free to grow your business.

The article raise two important points regarding the use of free in your business model. The first is that if done correctly, you can increase your market size greatly. The second is that if you don't, someone else will do it correctly, and your existing business model will be in serious trouble.

The author defines 4 steps that in theory can be applied to any market with respect to the economics of free. (The author admits that some markets might be more challenging than others)

1. Redefine your market based on the benefits.
2. Break the benefits down into scarce and infinite components.
3. Set the infinite components free, syndicate them, make them easy to get - all to increase the value of the scarce components.
4. Charge for the scarce components that are tied to the infinite components.

This sounds very straightforward, and I suggest you try it against your market or any market you have some familiarity with. I tried this with a few different markets and it was much more difficult than you might think. Probably the most difficult part for me was breaking down the benefits into infinite and scarce. In markets where the product is related to content, the concept of infinite is much easier to define.

For this post, I chose to try the post-secondary education market through this lens: (feel free to disagree or add on)

1. Redefine the market: The benefit is innovation potential
2. Break the benefits down: Infinite - course content, research results;Scarce - Field experts, facilities/equipment, thought diversity, idea diversity, degrees/certifications, talent pool
3. Set the infinite components free: Make research results publicly available to companies and possible users of the research, (but track who is looking at it). Make all course information materials, book lists etc available online. Include sample or all video lectures. This supports the redefined market/benefits.
4. Charge for the scarce components: Access to professors becomes more valuable, getting the certification and the schools reputation become more important, people who are serious about education will see higher value in that others who are there are serious about learning (while still allowing anyone with internet access to learn and see what the institution has to offer), getting the university to partner with a business to do R&D work (sponsorship).

Yes, I am sure you can shoot holes through the above idea or possibly have other ideas to make it better, but the point is to think about your business in a different light. The economics of free isn't just about giving away your product for free, but being smart about what can be given away and still be used to grow your business.

The Internet Technology Dip

I just finished listening to The Dip by Seth Godin. A short and too-the-point read. It got me thinking about the technology dip that occurs with internet startups. This dip used to be very deep, and difficult to push through.

Tools and hardware were expensive, proprietary, and had very low interoperability. You had to have people with very speicalized skills in house to operate it. Now, tools have become democratized, they are cheap or free with the open source movement, there are many available API's and expertise can be found easily often in the form of online communities. Also, you can typically procure enough hardware to with a very low budget to get any project to market. The technology dip has been flattened.

This shows up of course in the market, with the explosion of startups that have anywhere from a small technical component to those focused solely on technology. Now basically anyone with half an idea and access to basic development skills (even self taught) can attempt to enter the market with an internet based product. The dip has been drastically flattened and easily passable producing many half-baked and me-too products. The barrier to quitting at least on the technology front has been drastically reduced.

As an internet startup, if you are planning on using technology to differentiate, you need to understand this change. If you want to be exceptional, you have to move to the next technology dip or dig new deeper technology dips to rise above the crowd. No longer can you throw together a basic e-commerce sight, social networking site, bookmarking tool, or video sharing site and call yourself an exceptional, stand out from the crowd business. Any good VC/angel will see through this as well.

Basic web apps become commodities extremely fast. You need to take your technology to the next level of intelligence creating or entering the next generation dip that your average weekend web programmer will not be able to climb out of forcing them to quit. You need to take existing tools and combine/evolve them into truly value added products that support a need that people are willing to pay for. How can you make your application smarter than every other offering out there? How can you create new innovation by combining business needs with technology?

The Intersection of Business and Technology

At the intersection of business and technology, people often get very excited or tense, optimistic or worried, challenged (in a good way) or frustrated. Frans Johansson in The Medici Effect talks about intersection innovation - a place where two fields collide and divert along a new innovative path. The collision between business and technology has been a slow moving one over a very long period of time, but companies, are starting to realize, what many or most entrepreneurs already know - the endless number of new paths that can be taken when you start looking at these two areas together instead of separately. We are now at a point where one field can rarely exist for any length of time without the other.

John Hagel has now joined Deloitte & Touche USA LLP and will be heading up a new research center to focus on the business issues created at this intersection.

He poses a number of intriguing questions around this topic of business/technology interesection here with some thought provoking commentary that is worth a look by any reader interested in the topic of this blog.

Foundational

• What if there is no equilibrium?
• Can the firm survive as the action flows to the edges?
• Are all ecosystems created equal?
• If the world is so flat, why are spikes becoming more prominent?

Strategy

• Is adaptation all there is?
• Can we escape the Red Queen effect?
• As “L curves” replace “Bell curves”, what are the most promising routes to the head?
• We have a growing realization that stocks of knowledge are diminishing in value relative to flows of knowledge, but what is required for effective participation in the highest value flows of knowledge?
• What are the opportunities for the bottom of the pyramid to attack the top?
• How do we measure success when so many of the rules are changing?

Technology

• When is self-organizing not enough?
• How are pull platforms likely to evolve?
• What is the next generation of IT architecture?

Being at this intersection is to me what makes these two fields interesting and exciting for some while scary and daunting to others. It is the combined knowledge of these two areas that is driving much of the disruptive innovation we see today in the new economy. Knowledge and innovating down one side without considering the other will not produced viable results that will be able to compete in the current and future marketplace.

New Economy Problems

In 1973 H. J. Rittel and M. M. Webber came up with the idea of the 'Wicked Problem' as it related to social planning. The original definition of a wicked problem included 10 components, however Jeff Conklin later proposed 4 defining elements to wicked problems in 2003:

1. The problem is not understood until after formulation of a solution.
2. Stakeholders have radically different world views and different frames for understanding the problem.
3. Constraints and resources to solve the problem change over time.
4. The problem is never solved.

Although the concept started with social planning, and now more and more applies to computer science problems, I think it is now expanding well into other part of business. As business becomes more complex, there are more wicked problems. As business and technology become more intertwined, there are more wicked problems. At Balihoo we are in the vertical search business. Search is a perfect example of a business-technology wicked problem.

How do these types of problems impact conventional thinking?

- Defining goals & expectations becomes a problem
- Defining tests or methods to validate results becomes a problem
- Decision by consensus becomes difficult
- Results are no longer correct or incorrect, but better or worse
- Project time-lines are difficult to define

In addition to driving your traditional project managers crazy, it generally disrupts the framework around how business's determine progress. However, it is something that everyone in the new economy will have to adjust to. What wicked problems do you have, and what is your approach to solving them?

Work Life Balance

This weekend I headed up after work on friday to the Sawtooth Mountains north of where I live with 3 others to climb a great route called the Chockstone couloir on a peak called Grand Mogul. It was a short trip, tiring but extremely satisfying, creating great memories. I get out as often as is feasible, but with a busy job, and a growing family its important to make your free time count.

Recently we have been having a lot of discussions about what our company values are and should be. Values are important no matter how big or small you are. Values create the guardrails by which you work, and make decisions, just like your personal values guide life decisions.

One of the values that many companies speak to and try to have is 'Work Life Balance'. I never really liked this term because of its ambiguity. It seems straight forward, but it isn't. Its the term balance that bothers me. Balance is in the eye of the beholder. What is balance to one person is imbalance to another. Balance implies evenness, but we all know that is never the case with any business in the new economy. Work effort volumes eb and flow like tides of the ocean, and just like weather patterns there are periods of calm as well as hurricanes. In my experience, I find that this term of 'Work Life Balance' is often a buzzword thrown in for appearances, with little thought to what it means, nor how different employees will perceive it. In the end most people are unhappy, because their perceptions of what it means is different from everyone else's.

We wanted something in the same vein as WLB inside our company, battering around terminology such as work life control, and others. We eventually settled on 'Work Life Passion'. Not a huge departure, but subtle enough. The term passion might almost be considered more ambiguous than balance, but to us it says better what the culture of our company is and what we want it to be as it grows. People need to be passionate about their work inside the office and their pursuits outside the office, and strike a balance that makes sense for the company as well as for them. It in no way implies a perfect 50/50 split, and thats ok.

Stowe Boyd often talks about the concept of flow, and your time being a shared space. In the new economy that is often the case. The line between work and home blurs for most, but for most that is better, allowing for a more full life (ie - going to your daughters school play mid day) Also with his definition of flow, time is not constance - it moves faster or slower based on situation. Think about when people talk about being in the zone with sports and time almost slows down as the ball approaches. This flow time is what passion is all about.

Time across work and life is never balanced, but with passion and good use of the time you have allows you to create the balance that is right for you.

Enterprise 2.0

Enterprise 2.0 derives from Web 2.0, and refers to social software application that sit behind or are used behind the corporate firewall. Wikipedia has a good entry on the topic, and I just came across this slide deck about Enterprise 2.0 by Scott Gavin. It is very well done and told as a story, that may help you convey the concept in a more understandable way to peers in your organization. Have a look.

More True Than Ever Before

Flipping through some old notes came across this quote. Even with all of our technology, I feel this is more true than ever before. Probably even more so because of technology.

"A business is best considered as a network of conversations"

- Gregory Bateson
Steps to an Ecology of Mind (1972)

Photo Credit