Category Archives: general

Building a business case for innovation

Yesterday morning I got out of bed at 4AM Sydney time to attend one of a series of free webinars on innovation run by Stanford center for professional development. 10AM in California doesn’t seem to be good for anywhere else as far as I can tell, yet there were 600+ people in attendance.

Being free, these are (as you might expect) not terribly deep – being aimed at recruiting students into the paid courses by offering a brief intro to the course, however they do offer good insights into the topic, and also of Stanford itself. Particularly impressive is the calibre of the presenters and guests.

The topic of “business models for innovators”¬†was kicked off by professor Haim Mendelson, quickly moving to introduce the perspective of VC Howard Hartenbaum who described what, for him, makes a venture interesting enough to invest in, and also some of the indicators of a less interesting new business venture. Some of these seem a bit obvious (requires a lot of investment is a turn-off apparently), whereas the suggestion that click-based business models, or those in industries where acquirers don’t place a lot of value (services-oriented or relying on integration to legacy systems) were less obvious.

The case study on RelayRides from CEO Andre Haddad caught me out as it is already a step ahead of what I thought was the quite new innovation of short term car rental (such as Goget in Australia). The business model – leveraging off the Sharing Economy, and increasing tendency of young people to not buy cars – cuts through the traditional car hire model by completely removing the need for RelayRides to own any cars at all. Very smart, and successful.

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I’ve recently been having first-hand experience in integrating what started out as a skunkworks – a separate, autonomous business unit put together for a specific project – back into an existing business. After getting over wondering why my pet project was suddenly having such a hard time – it felt like the skunkworks was under attack – I realised that there must have been 1000 other similar projects, in 1000 other companies which have had the same experience.

The scenario is something like this :

  • Existing business processes are perceived to be bureaucratic, slow, unwieldy and conservative
  • A senior manager successfully lobbies to establish a special project/innovation team/skunkworks
  • The skunkworks is formed, upsetting everyone in the existing business because it brings up a mix of emotions … disempowerment, lack of recognition of the successes that existing processes can produce, the feeling of being sidelined or left out, anger, and everything else on the spectrum

If the skunkworks is successful, the problem becomes assessing whether its success is because of its autonomy and different approach, or whether the skunkworks approach just happened to be suitable for the project in question.

Sometimes the skunkworks is successful, but under cultural pressure starts to meld into the original business, taking on the attributes and more conservative approach of the original.

In some instances, it may be desirable to merge the skunkworks back into the original company. If the skunkworks has been in existence for some time, this may prove difficult as the culture of the two business units will by now be quite different, especially apparent if the skunkworks has been setup to be physically remote from the original business.

Any way you cut it, the setup of a skunkworks in the first place needs a lot of drive, and huge persistence to make it successful. Disbanding or merging it back into the original business can require just as much effort.

Apple uprising

Apple just released changes to their pricing structures, and are receiving a heavy backlash from larger publishers and from some smaller app creators who are crying “not fair”.

In essence this change restricts publishers from selling access to any portions of their app outside of the app store, and ensures that 30% of the sale price goes to Apple.

In the US there are rumblings of an anti-trust investigation, which I think I’m right in saying would be the first time that Apple have received this sort of attention.

I’m sure Apple are going to take this in their stride, and that publishers of all sizes will eventually just quieten down/roll over and accept the might of Apple, but there’s another long-term scenario that I imagine could be starting to play out here…

If you squeeze your eyes tightly closed, you could picture an Apple without Steve Jobs at all, and someone else at the helm who is not quite so controlling, and possibly still believes in Apple as the challenger brand, the benefactor, the champion of User Experience and friend of the niche markets. This new boss could start to be swayed by the weight of press and popular opinion and start to cave on some of these less popular issues. Maybe losing Jobs will have less impact on the inspiring products, but more impact on the business models that Apple chooses to put in place, resulting in a less powerful, more altruistic Apple over time.

Just maybe.

Nokia <3 Microsoft

The news that Microsoft and Nokia are to form a strategic partnership has been met with a fair bit of derision over the last few days, even though everyone knew that Nokia couldn’t continue to be so far out of the race, and could’t continue to confuse the developer community by dithering on platforms and technologies.

In my view this could be an excellent outcome both for Nokia, and for Microsoft, bringing a fresh and stable OS in the shape of Windows Mobile 7 (the experience on an HTC Trophy is excellent) to what is after all the best connected and organised handset makers on the planet. All Nokia has to do now is to hire some better industrial designers and scrap the legacy design ethic (see the N8, E7 for how bad they can make things) and they’ll be off and running.

Of course, handset manufacturing does not happen overnight, but if I was Elop and Ballmer I’d be planning a launch of a new device before Christmas – maybe reworking the ID of a chassis which is already in the works, layering WinMo 7 over the top.

The experiment with OVI is dead I assume – hopefully Elop will have no qualms about giving it the bullet as well.

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