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When I was on vacation last week, I read John Bogle’s book Enough: True Measures of Money, Business, and Life. In addition to be a superb book, it had a bunch of tasty little nuggets in it. One of my favorites was “the three i’s – innovator, imitator, and idiot” that was attributed to Warren Buffett.
I thought of this nugget this morning when reading Fred Wilson’s post When Government Funds Business. In it, he concludes “When government funds business, it messes everything up.” One of his examples is the delicious irony that Citi – which just got more government money – is running traditional print ads in the NY Times.
Fred’s wife Joanne’s reaction to this is "We are paying for that ad. In a newspaper that less and less people read every day. No wonder they are in trouble". Yup – I’d put that behavior in the idiot column.
However, I’m aware of some things going on at Citi that I’d put in the innovator column. They aren’t public so I don’t think I can talk about them, but I’m amazed at how forward looking, innovative, potentially transformational, and relatively inexpensive these activities are. They are the kind of fundamental investments that you’d hope major companies are making to stay relevant in the next decade.
While most people aren’t innovators, that’s ok. Many American’s understand the importance of them and – when the innovators take leadership roles – they motivate the non-innovators to follow them. In a twist on Buffett’s line, I’d suggest that if you apply it to leadership, you can segment leaders into three categories: innovators, imitators, and idiots.
When I think about my experiences with large companies, I see Buffett’s quip all over the place. Their leaders include innovators, imitators, and idiots throughout the organization. Same with government. The challenge is the innovators – especially when they are in a culture that is playing defense or simply trying to survive – often get drowned out, discouraged, or marginalized.
I believe that one of the key foundations that America has been built on is the innovator. At all levels of society, throughout history, the innovator has led, created change, and inspired greatness throughout our history. People love to follow the innovator. While the innovator is willing to take risks that might result in failure, not taking the risks often results in even greater failure.
My appeal to all leaders in big companies – and in government – is to innovate. Play offense. If you don’t know how to do this, look around for the innovators in your organization and team up with them. Challenge the imitators to step up their game. And don’t tolerate the idiots in any way, shape, or form.
On the eve of the passing of the massive “economic stimulus package” (I was really hoping it was going to be more than 1 trillion so Dr. Evil could start saying “1 trillion dollars”) we are hearing “broadband broadband broadband.”
I’m going to be spending the day tomorrow at the Silicon Flatirons Conference titled The Digital Broadband Migration: Imagining the Internet’s Future and I’m speaking at 9:45 on the panel titled Overview Panel: The Internet’s Challenge to Policymakers. It’s clear that I’ve been set up as my co-panelists are:
- Kathryn C. Brown, SVP of Policy, Verizon, Former Chief of Staff FCC
- Kathleen O’Brien Ham, Vice President of Federal Regulatory Affairs, T-Mobile
- Dale Hatfield, Adjunct Professor, University of Colorado, Former Chief Engineer Federal Communications Commission
- William Kovacic, Chairman, Federal Trade Commission
- Bryan Tramont, Silicon Flatirons Senior Adjunct Fellow, University of Colorado, Partner, Wilkinson Barker Knauer, LLP
I guess I’m the dude that gets to say “telcos – please get out of the way.” Coincidentally, as I was catching up on my email this morning, I ran into a note from Bob Frankston (of Visicalc fame) pointing in response to this conference pointing me to his post titled The Broadband Internet? It’s a brilliant post that is right on the money. The punch line:
“Today people know that they want more “Internet” so they ask for more of the same by saying “broadband”. Our future lies in universal connectivity and simplicity. We can do better than living in the past glory of telecommunication.”
I really hope “Broadband” and “Internet” don’t get conflated. Our friendly neighborhood policy makers need to make sure they know the difference.
Fred Wilson has a magnificent post up this morning from Berlin titled Bits Of Destruction. In it, he nails a critical point about innovation.
“This downturn will be marked in history as the time where many of the business models built in the industrial era finally collapsed as a result of being undermined by the information age. Its creative destruction at work. It’s painful and many jobs will be lost permanently. But let’s also remember that its inevitable and we can’t fight it. Technology and information forces are unstoppable and they will reshape the world as we know it regardless of whether or not we want them to.”
Go read the whole article – he gives several real examples (publishing, banking, retailing, and auto). Then come back here to finish up and hear my punch line.
I’ve been living and working in and around innovation and entrepreneurship my entire adult life, starting with my first company and the research I did as a masters and Ph.D. student at MIT Sloan School under Eric von Hippel. My life experiences, along with all the history I’ve studied, come back to the same notion.
Innovation is a continual process of creative destruction of the norm.
People talk about economic cycles and waves of innovation. These are intersecting forces that drive each other. But innovation is not just limited to business, technology, and science – it impacts all of our existence on this planet. Think about innovation in religion, philosophy, art, architecture, social structures, forms of government, urban planning, economic theory, expression of human sexuality – whatever you want.
In the late 1990’s, there were a bunch of people, myself (and Fred) included, who believed that the Internet would have a dramatic impact on the way our world works and we live our lives. After the Internet bubble burst in 2001, there were a lot of people in “the established business world” who said something akin to “see – that was just a fad.” Anyone who has clung to the idea that the Internet was a fad is in a world of hurt right now, as the premise, functions, and implications of the Internet revolution of the late 1990’s becomes deeply instantiated across the global economy.
The next 20 years are going to be awesome. We inevitably will have lots of challenges and pain along the way as the waves of creative destruction pummel existing norms. But that’s just the way innovation works – and has always worked.
In May I made a request for images for a presentation I was doing at my 20th MIT Sloan School reunion. The presentation – titled Software Innovation — Do You Think the Last 20 Years Were Exciting? The Next 20 Years Will Blow Your Mind is now up on the web. If you don’t want to watch it, read the summary below:
In a trip down memory lane, Brad Feld regales us with the pre- and recent history of electronic innovation, with a rapid-fire delivery that achieves vaudevillian pitch.
Via a slide-laden PowerPoint presentation — and, by the way, Feld claims to hate PowerPoint, because as a venture capitalist “I’ve only received about 6,723,000 of them” — he narrates landmark moments in the evolution of the computer age. He touches on the room-size ENIAC computer, and pays tribute to the Jetsons cartoon as embodying his view of the future as a child. He cites his first programming language (APL, 1976), and first computer (Apple II, 1978). Feld speaks sentimentally of the familiar A> prompt as a quaint relic of the DOS operating system era.
Jump to the late ’80s, when Hypercard on the Macintosh was a pre-web foreshadowing of distributing data through multiple applications…“a major breakthrough.” Windows 3.0 heralded the ’90s and subsequent leapfrogging of Microsoft and Apple on the personal computer frontier. He cites the renegade Linux operating system (1991), then the ignoble Michelangelo virus (1992)…“the first time the mainstream media got crazy about computer security.”
Feld detours from history to recount naming his software consulting firm Feld Technologies; whenever anything went wrong “people called up and asked for Mr. Feld.” Therefore, he warns “lesson #1 of entrepreneurship is don’t name your company after yourself.”
In the mid-’90s, the emergence of the Internet in mass culture made ubiquitous such terms as Mosaic, Yahoo!, Java, Explorer, and other iterations of web browser, search engine, and email protocol. In 1999, E-commerce and the Y2K scare entered common parlance. Around 2000, OS X and iTunes burst on the scene, in spite of post-Internet bubble depression. Feld credits Apple with changing “the way we think about digital content.” Catching up to recent times, he invokes social networking, the astronomical Google IPO, and the notion of Web 2.0.
As a venture capitalist, Feld seeks new paradigms in software development as investing prospects for 10 to 20 years – “the next big thing.” He is interested in “immersive experience” that alters human interaction with the computer. His attention is also drawn to decoupling mouse and keyboard from control of the computer toward methods requiring no tactile input. Lastly, he speaks of “cloud computing” where “everything is disconnected from what is on your desktop” and “you don’t have to worry about…data storage and equipment.” Then, elliptically, he reprises a slide of a 1960s room-size computer, suggesting it resembles a latter-day incarnation of a server farm. Full circle.
As a special bonus, the speaker who preceded me – Professor Roberto Rigobon – did an incredible job on his lecture The U.S. and the World’s Recession which feels particularly relevant and prescient today.
Irving Wladawsky-Berger – IBM’s VP of Technical Strategy and Innovation (and one of the few “must-read” IBM employee blogs that I’m aware of) has a good post up summarizing Eric von Hippel’s work on Democratizing Innovation. Eric was my doctoral advisor at MIT (I didn’t finish) and has built 30 years of really important academic research (and a worldwide research community) on the idea he stated around 1978 that “innovation comes from users, not manufacturers.” Today we might say something like “yeah – uh huh”, but in 1978 this was a radical thought.
There was plenty of discussion about “users” and the importance of them – especially in the product development cycle – at Gnomedex last week. Wladawsky-Berger does a nice job condensing von Hippel’s ideas down into a few paragraphs. Eric’s latest book – Democratizing Innovation - is full of examples that build out his framework (and is available as a free PDF and licensed under a Creative Commons License.)
As a wise man once said to me when I was a young student, “wouldn’t manufacturers be irrelevant without users?”