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A leading innovation and marketing blog from Braden Kelley of Business Strategy Innovation

Wednesday, November 19, 2008

Missing Mobile Innovation

Mobile Television ArticleI came across an interesting article about mobile television takeup.

Verizon, Sprint, and AT&T have all tried to launch mobile TV in the United States, but with takeup at only 1% of cell users it's pretty easy to say that mobile TV has failed to prove itself to be an innovation.

Sure people might find it to be a useful invention, but customers refusal to pay an extra $10-25 per month for it on top of their $40-80 monthly contract, proves that it is not a valuable innovation. So if in the current environment customers might only take up mobile television if it were free, what are the mobile operators to do?

Stop offering mobile television as fast as they can....

That might be a little problematic for Sprint, given that they just signed a $500 million deal with the NFL, but maybe they have an out.

Why do I think that killing mobile TV as fast as possible is the way to go?

The article indicates that the existing offering were launched before sufficient technology was in place. Experience teaches us that launching a technology too soon is sometimes more damaging than not launching it at all. If people have a bad experience with a technology they are likely to do one of two things:

  1. Stop using the technology and not try it again for a long time

  2. Think the technology provider is at fault, ignore improved options from the same provider, and switch to a different provider instead

Either way the existing operators are likely to lose money in the short-term and long-term revenue opportunity and market share in the long run.

T-Mobile USA has the opportunity (if they are smart) to observe where the others are failing, talk to lots of customers to better understand their needs, and partner with someone like Slingbox to deliver something that customers find worth paying for.

What do you think?


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Sunday, November 09, 2008

Innovating Through Downturns

While most individuals and organizations natural reaction to an economic downturn is fear and retrenchment, they also present a time of great opportunity.

Where would Microsoft be if they hadn't continued investing through the downturn of the early 90's?

  • Microsoft may never have finished the hugely successful Windows 95.

Where would Apple be if they hadn't continued investing through the technology crash of 2001-2003?

  • Apple may never have fully realized the promise of the iPod and subsequent iPhone.

When a recession arrives, great opportunity presents itself:

  • The unemployment rate increases (more available workers)

  • Interest rates drop (lower cost of capital)

  • People become fearful of losing their jobs making it easier to recruit from companies reducing or eliminating their innovation investments (increased labor mobility)

  • People are more open to moving if a spouse's job is eliminated or at risk (increased labor mobility)

  • When a recession arrives, it is easier to acquire tax breaks or other incentives for expansion, new sites, etc. (lower investment costs)

So, if companies have positive cash flows or significant amounts of cash on their balance sheet, or promising ideas to invest in, then there is no better time to invest. Companies with the courage and financial capability to invest in innovation through a downturn, absolutely should.

In addition to all of the other benefits, there is no better opportunity to achieve competitive separation through continued investment in innovation.

It does, however, take a strong CEO and steady board to have the courage and conviction to make such an investment. Innovation is not a perfect science and requires a tolerance for failure and a long-term commitment.

In today's short-term Wall Street quarterly profit-driven corporate reality, investors' short-term outlook may be the biggest impediment of all. But, smart organizations will find strategic solutions to overcome this impediment.

Organizations should take the following strategic actions to maintain or expand their innovation initiatives, despite the current global economic downturn:

  1. Secure the leadership flexibility capable of continuing to invest in innovation despite financial pressures

  2. Identify resources that you would like to have had access to during good times, that you might now have access to such as:

    • Labor in scarce specialties

    • Affordable capital

    • Scarce real estate

  3. Increase competitive monitoring to identify opportunities that may be created in areas where the competition reduces previous innovation investment

  4. Increase customer research to identify opportunities to refine your ability to deliver products and services that deliver increased customer value, ideally at lower cost

  5. Improve your innovation processes to improve your ability to innovate more quickly and effectively than your competition

  6. Improve your organizational agility to increase its flexibility to adapt to changes in market conditions caused by the downturn and to shift resources efficiently and with increased speed

Organizations that take these necessary strategic actions, will come out the other side stronger than the competition, stronger than ever before, and create opportunities to preserve or attain market leadership.

Happy innovating!

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Friday, November 07, 2008

Interview with Humdinger Wind Energy's Shawn Fayne

I had the privilege yesterday to interview Shawn Frayne, a founder of Humdinger Wind Energy. This being the Internet Age, we didn't have to wait until we could sit down in person to chat. Instead it was an almost commonplace phone to Skype, to mobile (Skype Forward) call from Seattle to Hong Kong.To my parents, I would say "I interviewed him by phone."


Humdinger Wind Energy was inspired by Shawn's discovery of the story of the Tacoma Narrows Bridge collapse of 1940. From seeing video of this historic collapse, Shawn became inspired to try an alternative approach to generating electricity from wind energy. The genesis of the wind belt and subsequent founding of Humdinger Wind Energy Was the result of an initial goal 4 or 5 years ago to create an inexpensive wind generating device to power simple LEDs for lighting, or to recharge cell phones in Haiti. This original goal then evolved to a goal of developing affordable rural lighting and rural electrification solutions.

The genesis for the company may have come out of seeking to do social good, but Humdinger Wind Energy is not a pure social play. They are a for-profit start-up that can stand on its own. Humdinger has already gone through a significant angel round that is enabling it to a technology transfer level.

Implications - Wealthy vs. Developing Countries

Though the wind belt technology has developing country implications, it also has wealthy country uses that they can address through technology licensing to existing energy players. The goals of the organization when fused together are to use revenue from wealthy country applications to fund longer term developing country applications. They are more akin to someone like Motorola developing an inexpensive phone to address low-income customers, than an international development organization. Humdinger has a triple bottom line, but also endeavors to meet traditional company goals of making revenues and profits.


In part to support the different goals for wealthy countries and developing countries, Humdinger has decided to make part of their intellectual property available for educational exploration. One of the purposes of doing that is to treat the wind belt as open source hardware in the developing countries while at the same time patent protecting it in developing countries. Shawn had some of the following things to say about this:

  • "We've built the system described in the education document ourselves in three minutes."

  • "Hopefully having more people working on it will advance technologies faster."

  • "People were downloading videos and experimenting with the idea itself and a community was starting to develop."

  • "This community inspired us to put out more information than we had previously explored."

  • "So far we have had 1,100 downloads of the document."

  • "To this point we haven't gotten much feedback other than saying they are excited to work on it."

  • "This approach is also in our best interests because any company seeking to harvest or create energy in a new way has to convince people that the new approach works in order to move out of the fringe."

Open Innovation

We also discussed the open innovation movement and Shawn doesn't fully agree with the open innovation approach. He doesn't think that the human species has reached the point where invention is highly social at scale. He believes that optimal invention is still limited to small groups of people working together in person. Also for Humdinger to be financially viable he feels they must have some amount of protection around their ideas in wealthy countries. Here are some more of his thoughts:

  • "The problem is not generating new ideas..."

  • "There are 1000 different ways to address a problem, the bigger problem is how do you effectively select what to test. You can't test all the approaches. How do you pull out the right ones to test?"

  • " You still need a small group to select the correct solution to pursue."

Social vs. Commercial

There are four primary members of the leadsership team: Shawn Frayne, Jordan McRae, Jerry Chun, and Kurt Kornbluth. As they grow, they will likely merge some of their ideas with those of one of their informal advisors (Paul Hudnut at Colorado State University) and create small incubators of 4-5 people ("Virtual Innovation Factories"). These teams will not be together under one roof (the Edison or Dean Kamen approach), they will be dotted around the world and bring the best minds to bear on very fundamental problems (energy harvesting, energy storage, and water treatment).

Humdinger was formed to generate funds over time for this grand experiment. This is not what we are currently doing with the group in Xela, Guatemala. As they are a separate organization that we partner with - we like to call this "Cloud Inventing".

  • "When we talk to the group in Guatemala (we Skype in to see what's going on at the site and to talk to them), there is a lot of personal contact and we know that they are very good at inventing and engineering, and it is a small group."

Humdinger is trying to develop a new type of wind cell that is flexible and modular and works inexpensively on a smaller scale that only solar or batteries could have before.

  • "What if you could break up a big turbine and split it up into 1000 pieces at the same efficiency ($2/watt)?"

  • "Most of the folks we talk to get really excited about this being a fundamental change in how power can be generated."


Overall it was a great talk and I hope this gives the readers a bit of insight into an example of one of the many hybrid commercial and social good models that we are blessed to have existing during our lifetimes. There are obviously a lot of potential applications for this technology in the wealthy countries - everything from powering sensors to other types of micro-generation. I wish Shawn and Humdinger every success with this endeavor.

Sites mentioned during the conversation that are worth checking out:

- http://www.instructables.com/
- http://www.makezine.com/
- http://www.brightidea.com/
- http://www.ideorg.org/

Related articles:


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Wednesday, November 05, 2008

Wipro Makes a Necessary Move

Wipro is coming to America, and Romania, and Egypt.

It used to be that Wipro was an Indian company employing mostly Indians in India and that when they did an outsourcing deal with you, they would offshore the work to India.

Times are changing though. An increasing number of potential outsourcing clients are becoming disillusioned with offshoring (especially for software development work). The reasons can vary, but include:
  • Development overhead that wipes out most of the financial gains

  • Finding that senior development staff is better suited to coding than directing Indian subcontractors

  • Time zone hassles

  • Language barriers

  • Employee retention issues

I can't say that I think this is a bold or innovative move. This is something that Wipro has to do or they will not be able to compete with IBM, CSC, Accenture, HP/EDS, etc.

While doing a process analysis for a large UK-based financial and healthcare software company I personally witnessed some of the drawbacks and the company's reactions to them.

The fact is that as more commercial and internal software development moves to using agile methodologies, companies will require any external partners to be in the same country or even the same time zone or possibly even the same building.

This is one more proof point that the world is not as flat as people once thought. In this undulating world, success will come in part from differentiating between times when the world is flat and when it is round.

What do you think?


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BiF-4 - Now Back to Regular Programming

Hello all,

I've posted the last of my notes from Business Innovation Factory (BiF-4), so I will now be returning to writing original blog posts for you. When Business Innovation Factory posts the videos from BiF-4, I will update all of my BiF-4 posts with links to the video for the speaker.

If there are any topics you would like me to cover or you come across any interesting innovation articles that you would like me to comment on, please send them my way via the Contact Us link.

All the best,

Braden Kelley
Chief Innovation Officer
Business Strategy Innovation


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BiF-4 Insights - Frans Johansson - Author - "Medici Effect"

Spoke briefly about the The Medici Summit.

People at the Harvard Centennial on Monday/Tuesday changed their speeches based on the financial cris, but not here at BiF:
  • We view risks differently

    • Innovators and Entrepreneurs

People adjust behavior to the perceived risk around them:
  • Example of German taxi drivers and the introduction of anti-lock brakes

  • No reduction in accidents despite this safety feature

  • People drive faster, follow closer in response to this safety feature's introduction

Apple's $500 million investment in the Newton versus Palm's spending $7 million on the Palm Pilot:
  • Why did Palm spend so little?

  • Because that is all they had left to spend

We think we can increase success by having (or spending) more money, but we can't
  • When we have more money, we spend it on trying to reduce the risk

    • Strategy/Planning

    • Researching if anyone else is doing it

      • If they are, maybe we give up (falsely)

        • What about Google? They weren't the first to do search, other people were doing similar things.

Example of three Harvard Business School graduates not ending up where they planned:
  • One went from a startup to another startup to another startup (none of which succeeded)

  • One went from a startup to a Strategy Consulting Firm

  • One went from a Strategy Consulting Firm to Google to being retired

We can take more chances:
  • Perseverence

  • War option

  • Passion helps us take chances

For more information on the talk, go here.


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BiF-4 Insights - Terry Pierce - Office of Homeland Security

HSARPA - 10% of budget in disruptive innovation
  • Disruptive Innovation Group

    • Air Force Academy

      • 4,000 Bachelor of Science (B.S.) students

      • They do social networking

        • World of Warcraft and coordinating 16-17 people to attack a Dragon

    • Flexible distributed control

      • Multiple people getting the same information at the same time (working with Cisco)

LCD TV Case Study:
  • We invent radical technology and build things, but don't always implement them

  • We don't do a great job of imagining all the ways the technology can be used

Liquid Crystal:
  • Discovered in 1888

  • In 1968 RCA developed LCD's

    • Went on TV to disclose invention

    • Subsequently put into solid state division within RCA

    • RCA kills project

    • Sharp wants to buy, but RCA says no

    • Sharp then does 15 years of research and forms a secret company inside Sharp

We have things that will kill core competencies of some our organizations
  • Challenge to us as a society how and when to commercialize some of our technologies in the national interests


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BiF-4 Insights - Jeffrey Hollender - Seventh Generation

"We are making things less bad."

New venture - New Chapter (Vitamin company sourcing from Costa Rica)

Would it be possible to make shampoos that when flushed into the oceans, they might help make the oceans better?

In the financial crisis, will sustainability be the first thing to go?
  • Pepsi just announced layoffs of 3,300 people including the head of sustainability

Meanwhile, Wal-Mart hasn't pulled back their commitment to sustainability
  • We are now going to sell thru Wal-Mart

  • I may have said we never would do this, but the fact is that it helps us help more people to do less bad

  • Wal-Mart is taking many positive steps ahead of other retailers:

    • Wal-Mart influenced laundry soap manufacturers to cut half of the water out of their liquid products

    • Intentionally becoming the largest seller of compact flourescent lightbulbs ahead of the curve

    • Exploring green energy for stores

    • Exploring fuel efficiency improvements for its fleet of trucks

    • Changing price of salad & water meal in their store canteens to match the price of pizza & soda meal

To create a productive workforce you have to create the ability for people to grow.

We have one day a month devoted to learning some far out things:
  • Training on raising consciousness

  • We've been helped by Carol Sanford as the architect of this

Every six weeks I also sit down with employees and answer all their questions.

We were forced to talk about a chemical being in our products that we were working to remove, but wasn't gone yet, because we were not yet being transparent.

As a result, we started to publish transparently what's wrong with our products, which may seem dangerous, but competition does not capitalize because they do not want to answer the same questions about their products.

For more information on the talk, go here.


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BiF-4 Insights - Josh Klein - Frog Design

Josh told the story of getting his book published:
  1. He wrote the book, tried to sell it unsuccessfully, and so it was sitting in his drawer

  2. So, he gave it away via Creative Commons license

  3. He gave it away everywhere he could (including getting it included into the first e-book reader software for the iPhone)

    • 12,000 downloads and comments/fan mail/formatting suggestions

  4. He then looked around for Print On Demand options to print a copy for his mom

  5. He collaborated to get cover art for the book (using his college alumni list)

    • She got a url on the back of the book and a mention on the inside of the book

    • 12,000 people ended up downloading her work

  6. Commiserate - He told the story to an Amazon Print on Demand tech support person and they gave him a Pro account and Amazon ended up offering to distribute his book internationally

For more information on the talk, go here.


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BiF-4 Insights - Deborah Brooks - Michael J. Fox Foundation

We want to de-risk ideas and help move them towards being taken into clinical trials.

We sometimes add money to company investments in order to make Phase 1 trials more robust than originally planned:
  • $4 million VC-funded trial, we incremented by $750k to fund neuro-imaging and extra doctor visit

    • In order to get more data out of the trial

We are almost filling the role of an early stage investor (in some cases).

Giving foundation money to drug companies must be a challenge for people giving money to the foundation to take, but we are pushing the envelope in order to do whatever we can to accelerate the finding of a cure.

For more information on the talk, go here.


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Monday, November 03, 2008

BiF-4 Insights - David Yaun - IBM

IBM's new core values:
  • Dedication to every client's success

  • Innovation that matters, for our company and for the world

  • Trust and personal responsibility in all relationships

Global Innovation Outlook (GIO) program (similar to an innovation jam):
  • Brainstorming around big societal issues

  • 2-3 times per year at sites around the world

    • Ideas were going global

    • Innovation was becoming more open

  • Have now run about 50 GIO's in 36 countries

Started with the question of:

What would happen if we took the five best scientists (IBM fellows) and five of the top, connected people from the consulting business and brought them together?
  • Problem was that it wasn't open

  • So we started inviting external people and opened it up

    • We opened up our planning process

    • Videos posted on the web

      • Shame on us if we can't execute first

We took it to the Chairman:
  • We estimated it would take 18-24 months to implement the idea

  • The chairman asked if we could do it in five months

    • Of course we stupidly said yes

    • Chariman said that if we ever get comfortable while implementing it then we are probably doing it wrong

Executive response:
  • "We already do this"

  • "What you're proposing is very dangerous..."

  • "Your guys are taking drugs"

  • "I forbid you from talking to my customers"

  • "If you must go ahead with this folly, my job will be to prevent you from embarassing the Chairman"

"Don't let your job desription define who you are or what you do."

For more information on the talk, go here.


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