Friday, January 14, 2011

How do you time the introduction of disruptive technology?

How often does a farmer plow their field?

I know very little about agriculture, but my guess would be either once at the end of the harvest or once at the end of harvest and once at planting time. Why? - because plowing is DISRUPTIVE. If you plow during the growing cycle you gain no benefit from the growth of the stuff you plowed under – unless it was meant as fertilizer!

The same applies for new disruptive innovations in a company. You don’t want to plow under a crop that is going to earn you money. Because of fear, the big argument is that in the end you may never disrupt the growing because a short growing cycle remains and your disruptive innovation won’t have time to mature enough. This is the real meaning of disruptive. You need to have to guts to see your field producing way more value with your new crop than with your old one. And it may take more than one growing cycle. (That’s why corporate strategy is hard and making the tough decisions is why the CEOs get paid so much!)

Probably the intelligent thing would be to follow a portfolio strategy, to do is divide your field in two and plant one with your core money making crop and the other with your disruptive crop. A definite amount of stable cash flow is always necessary to incubate a disruptive crop. Then as your disruptive crop gains in value over the years, you convert more of your field to produce it and you eventually stop growing the other stuff.

This idea is entirely similar to the Boston Consulting Groups Growth-Share Matrix. The idea that the cows aren't growing but they bring in the cash, the dogs are just a waste of time, and the stars grow their market share and bring in the cash.

To summarize: timing is important in introducing disruptive technology, but it takes guts on the part of the CEO to introduce it when it appears to be the wrong immediate choice.

Good Luck CEO!

Thursday, January 13, 2011

3 Business Ideas that May be Big Soon

The following three ideas have been around for some time. They have been incubating until the right amounts of fertile customers are available for them to spread past the prototype stage into the adoption stage. Two are convenience and one is just the application of reducing information for accurate business intelligence.

1. Paying by Mobile Phone

In the North American Market, a typical mobile phone bill is between 30 to 100 dollars. While that is not a big portion of someone with a car and home, for teenagers and people in their 20s, this might just be the biggest outflow of money if they are living at home. This also is usually their first entry into the credit market: starting a credit rating and a long-term payment agreement with a mobile phone company.

So now, Mr. Mobile Phone operator, why don’t you let these guys buy a pack of gum at the store and put it on their next phone bill? They do have a debit card for sure, but you want to keep them for life. If you offer this service – people will stay forever! (Anyway that’s the way I’d sell this to the phone company.)

I think that micro-payments, using the phone company as a mini-bank will happen sooner than later. But the issues are several:
• What interface will the store owner use?
• Existing debit/credit one?
• A new software interface over phone lines?
• How will the transaction work?
• Will phones have chips in them or will it be done by sending an SMS or making a phone call?
• What charges will the seller/buyer incur?

2. Mining Social Networks

This goes back to yesterday’s post about finding trends, but it also goes deep into finding key ideas, business influencers, and product information. We are already mining social networks today, but there is a lack of unification between the Psychological understanding of groups and the higher level of what this data means.

The business model must answer:
• If this solution can this be used by a third party on an open business network or does it need to be used by the host of the business network?
• Who is the user, an individual looking for information about another individual or about an organization?
• Will the product be used for spying on the competition?
• How can the accuracy of the conclusions being made about the mined data be tested against the facts existing in the brick and mortar world?
• What benefit does this give a company in pursuing its strategy?

3. Connected Home Healthcare

People are aging; their access to healthcare is not only limited by their ability to pay, but also by their ability to get someone to help them to the hospital. What if a heart rate monitor, blood pressure cuff, thermometer and stethoscope could be connected to an Internet-connected laptop or phone-line. The information would be sent to a virtual clinic (could be anywhere, India, China, or Cincinnati) and the doctor could prescribe medicine, monitor a treatment plan, or call emergency services for the patient.

Wouldn’t the hospitals be happy that the emergency rooms would be filled with less “Emergencies” because they were prevented? Plus this would offer some people actual health services that may never choose to go to a doctor at all. Plus it would benefit the medical provider because they would not need to maintain a clinic.

Questions that arrive with this business idea:
• How would the devices be tested by the doctor if they never left the patient’s house?
• How would payment be made?

• What laws surround malpractice and remote diagnosis and treatment?

• How would insurance know that a treatment occurred?
• Could these digital records (video conference even) be stored and accepted under national and international health records laws?
• How would you distribute the devices to the patients?
• Who would manufacture them?
• Would this solution work more developing countries or rural communities than for the United States?

Wednesday, January 12, 2011

Finding the Next Big Thing! (Part I)

If you are like me, expending energy on finding the Next Big Thing is much more fun than working at creating the Next Big Thing. Why work hard when you can march in front of a popular revolution and then install yourself as its leader?

I’m being a little facetious here but, it is true that The Next Big Thing is never just one person’s idea. The history books say Calculus was invented by two men simultaneously; that the phone and light bulb were invented by many independent teams as well.

Some people think it up, some people adopt it early, others improve it, others promote it, others commercialize it, etc. People outside the organization touch it and use it. The idea though is for you as a leader in innovation for your company to know in what industry, product, price-point and value proposition to be in based on what the trends say. So the Next Big Thing has everything to do with trends.

I use the Internet to find big trends. I would not use the Internet to discover if a local vacant parking lot was used more on weekends than weekdays. But then, a local vacant parking lot may not be part of the Next Big Thing - just part of the Next Small Thing. I might be able to see if vacant lots around the city or North America where used more, but then I would have to go to a distributed data gathering tool, like the Internet, for more information anyway. Have I mentioned I like using the Internet to find big trends?

So what (free) tools and data sources are out there to find trends?

  • The first tool is Google Trends (it is simple and gives you some basic statistical answers to some basic questions: when do people search for “flu”? are there more searches for “snow blowers” from Los Angeles or New York over a similar period?)
  • Another neat tool is Alexa. It’s a company that uses really big browser search numbers to project activity across the whole Internet. They can tell you what topics are hot, what websites are active and becoming more active, and even what products are hot. But these are basic and the ability to ask a more complicated question is not possible in this free tool
  • Yahoo Buzz! Is another trend monitor. It’s divided into news, business, entertainment, etc. It’s basically a way to find the top “information” pages being read on the Internet found through Yahoo sources.
  • Other, but poorly organized storehouses of information would be: Twitter, Facebook, Wikipedia, Slashdot, YouTube, Blogger and Baidu.

There are even some meta-sites like that put a few of these free tools side-by-side on the same web page. The problem with these tools is that they really talk about what is hot now, and not what is a large underlying trend. For this you need to be a little more clever in how you analyze the data you read and how you monitor the hot trends over time.

Tuesday, January 11, 2011

Note Taking and Supporting Inventions in the R&D Department

(from a letter to the R&D Dept.)

Note Taking

Dear Inventor!

Documenting inventions and innovations is simple and straightforward. Having things documented can save a patent from being declared void, can be a source of information in later research and can help other researchers understand, use and improve your invention.

Keep notes.

In Canada and the United States we usually follow a first-to-file rule at the patent office, but some patents have been overturned and granted to other parties based on dated lab books and invention documentation during the “interference process”. Now isn’t that a powerful statement to make about the scribbling of an engineer with poor penmanship! So one company files the patent, but another says “we have a note in a lab book that shows we invented it first!” Keep notes (with dates)!

So how do we suggest you keep these notes?

• We have a bunch of hard-spine notebooks in the storage room from the stationary store.
• Please check that you take a book with numbers on each page
• Follow the guidelines below
• Full books should be given to your manager
• The I.T. group can install a program on your computer called blogger.
• You basically type in your ideas and activity for that day into a web page. This becomes searchable immediately and will allow others to comment on your work and hopefully improve on your ideas.
• A digital snapshot of your work is stored at the end of the day in the backup program, and we always have last week’s information if there is a catastrophic loss of information.
• Follow the guidelines below
• Please review the printouts of your digital work

Guidelines of types of notes:

1. Do it daily (this can prove diligence in many cases which is an important financial and legal quality)
2. Use the system to record a concept, drawing, purpose, description, data collected etc.
3. Each entry needs to be dated and continued page to page (don’t jump around pages)
4. Write from the upper left side of the open book to the lower right side (standard European way) – please don’t try to be clever on us with Leonardo Da Vinci backward writing
5. Use ink (preferably not invisible ink!)
6. Do not erase or white-out anything (we will actually be checking this on a regular basis)
7. If there are blank spaces between dates and ideas, etc. draw a line through them so nothing can be put in that spot at a later date
8. A certain amount of neatness counts, but it’s more important to capture everything in some organized fashion
9. If you have to glue some data or a picture in, do it on a full page with no writing under it. Refer to the drawing or data in some way explaining it, close by the pace where it is glued.
10. A big data dump needs to be stored electronically, and some sample data needs to be printed out
11. Tough part: all entries need to be signed and dated and witnessed by at least two people at the time they are written. The witness should not be involved in the invention process. If you can’t do this daily, at least have these notes read and witnessed weekly.
12. Take your notes, during or shortly after you are doing something, making sure there is enough time before you leave for home.

Other stuff that needs to be recorded

Dear Manager!

While inventors are busy inventing, you are not off the hook either. In addition to making sure the note taking process is going smoothly, that witnesses are available, and inventors have enough time to write in their books or blogs, you need to collect a few other things to support these ideas, inventions, and research:

• Project files and other planning documents, showing activities, tasks and people, meeting minutes and project reports
• Documents describing project objectives , the problems to be solved and discussions of unexpected obstacles encountered
• Photographs, notebooks, drawings, etc.
• Prototypes, physical samples, records of trial, test records, protocols and results
• Analytical results, quantitative measurement data and results of analytical and/or statistical analysis
• Scrap

We have no lack of space. Everything needs to be documented. If it isn’t it’s just like if it doesn’t exist. The documentation needs to be put into the database engine.

At Quarter End you need to write-up a few paragraphs about the materials you have stored to support inventions and research (that no project or patent has claimed) and give them to the person appointed by the CFO for the tax return and patent filings. This will mean that useful information will not be lost when only one person forgets about them! … only when everyone forgets.

Monday, January 10, 2011

Scientific Research and Experimental Development

(from RC4472)

The definition of "scientific research and experimental development" given in subsection 248(1) of the Canadian  Income Tax Act can be summarized as:
…systematic investigation or search carried out in a field of science or technology by means of experiment or analysis ... to advance scientific knowledge or to achieve technological advancement.

The work must fall into one of the following categories:
  • Experimental development – This is the work done to achieve technological advancement for the purpose of creating new, or improving existing, materials, devices, products or processes.
  • Applied research – This is work done to advance scientific knowledge with a specific practical application in view.
  • Basic research – This is work done to advance scientific knowledge without a specific practical application in view.
SR&ED can also include other work that is directly in support of the experimental development, applied research or basic research. This support work includes only the following eight specific types:
  • engineering
  • design
  • operations research
  • mathematical analysis
  • computer programming
  • data collection
  • testing
  • psychological research
The support work to be claimed must correspond to the needs of the experimental development, applied research or basic research performed.

Certain work is not eligible for benefits under the SR&ED program, including:
market research or sales promotion;

  • quality control or routine testing of materials, devices, products or processes;
  • research in social sciences or the humanities;
  • prospecting, exploring or drilling for, or producing minerals, petroleum or natural gas;
  • commercial production of a new or improved material, device or product, or the commercial use of a new or improved process;
  • style changes; and
  • routine data collection.