Andrew Hargadon

A mousetrap in hand versus in the bush?

What's the value of a mousetrap (or two) in the bush? Hitting the road to spread his message of energy independence, Bush announced that the US was on the verge of an energy breakthrough (story):

"Our nation is on the threshold of new energy technology that I think will startle the American people," Bush said. "We're on the edge of some amazing breakthroughs — breakthroughs all aimed at enhancing our national security and our economic security and the quality of life of the folks who live here in the United States."

I've spoken about the fallacy of better mousetraps before (mousetraps), but to recap--the numbers just don't pan out. Of the 4400 mousetraps patented in the last 170 years or so, only a few dozen have made any money, and only 2 dominant designs are on the market (the snap trap and sticky trap). The world does not, it turns out, beat a path to anyone's door for a better mousetrap. Nor will it for a better energy technology: solar, nuclear, hydro, geo, biomass...these were and are all good technologies. But that's not enough.

Technological revolutions don't happen overnight. to take hold, they require relatively slow and incremental changes in the behavior of individuals and markets. Edison's light bulb (arriving as it did 40 years after the first incandencent bulb) still preceded the true age of electricity (in the homes and factories) by another 40 years.

So here's the dilemma: the more we talk about a great technology just around the corner, the less we take responsibility for the harder work of changing our behaviors to exploit the alternative energy technologies that are out there today. The danger of believing in an energy mousetrap--that a technology will suddenly rescue us from our addiction--is that such a belief only enables our complacency. Don't worry, be happy, and a solution will be along shortly.

The politics of technology

Building a better mousetrap seems to have more in common with Britain's finest hour than with the glamour of innovation. For example, developing the technology to blanket cities with free wi-fi is, to paraphrase Churchill, "...not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."

Glenn Fleishman, writing in the NYT Advocates of Wi-Fi in Cities Learn Art of Politics, describes the necessary disillusionment of early "free wi-fi" pioneers and their subsequent embrace of politics in order to implement their plans: "All of us were very idealistic, and all quite strongly opinionated," says one such pioneer.

"The problems that were hard in 2001 were technical ones," Mr. Spiegel [president of NYCwireless, a volunteer wireless advocacy group in Manhattan] said. "Now, they're personal and relationship and political ones. The technology, we almost don't even think about it anymore."

Sound familiar? Anyone who has tried to push innovation in organizations recognizes that getting the technology right is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning. Politics comes next. Perhaps we need a Churchillian theory of innovation?

The Corporate Citizen

In explaining why he grilled Sec'y of State Condoleeza Rice in Davos, Dr. Daniel Vasella, chief executive of Novartis, the Swiss pharmaceutical giant, offers these words of wisdom--and perhaps warning--to CEO's who feel they can and should abdicate their own beliefs and values to further the corporate mission:

The first responsibility of a C.E.O. is to run his company successfully and generate products which are useful to your customers, resulting in economic value creation. We also have to act responsibly, respecting not only the law, but also fulfilling legitimate expectations that society has of us. Today these expectations in most instances go beyond short-term profit maximization. What people want is that businesspeople behave in a responsible way in communities in which they live, that they treat employees fairly, respect the environment and demonstrate sensitivity to the problems of other, disadvantaged people in the world. I think corporate social responsibility has taken a much more important role than it used to.

And later:

...some of my fellow C.E.O.'s believe they should not express themselves on political issues at all. They should just do business. I think that is not the right attitude. First of all, we are citizens of whatever country we are from. We have a citizenship responsibility. Secondly, I do believe we have to examine our own beliefs and value systems regularly. We cannot act in a void. I think there is very clear responsibility.

As global power migrates from nation-states to corporations, the behaviors and expectations of these corporate citizens will become increasingly central to peace and prosperity.

Discovering, and staying, discovered

Another interesting article in NYT, about the redundant nature of science, Pity the Scientist Who Discovers the Discovered. The article describes how so much of science consists of discovering what's already been discovered by someone before--and highlights two challenges in the innovation process: distinguishing new from old and making a difference.

The discovery that your discovery has already been discovered is surprisingly common, said Stephen Stigler, a statistician at the University of Chicago who has written about the phenomenon. Not only does it occur in every scientific field, he said, the "very fact of multiple discoveries has been discovered many times."

One of the more powerful examples, of course, is penicillin (An Unfortunate Notion), which was discovered, in various ways, long before Fleming. And, of course, the ultimate disdain in academia is calling someone's work "old wine in new bottles," which presumes your generation was the original winemaker.

Even Einstein's work combined current understandings of what were existing but previously unconnected ideas and phenomena, building on the ideas of Boltzmann, Hertz, Poincare, Mach, Planck, and others. Such old wine is not so muc relabeled as remixed, combining in a way that enabled Einstein to take what was best and leave behind the vestiges of older scientific practices. Those closest to Einstein’s discovery, the very individuals whose work Einstein recombined, Mach, Max Planck, Lorentz, Poincare, themselves never wholly embraced his work. Max Planck referred to Einstein’s theories as merely a generalization of Lorentz’ work.

All work is derivative, but also breaks new ground. The first challenge is to know the difference. As Einstein once said of Mach, whose work he admitted to closely building on, “It is not improbable that Mach would have discovered the theory of relativity, if, at the time when his mind was still young and susceptible, the problem of constancy of the speed of light had been discussed among physicists.”

The second challenge is getting anyone, and then everyone, to know the difference:

Larry Shepp, a famous mathematician at Rutgers University...when told that a piece of work he thought was his discovery actually duplicated another mathematician's breakthrough, replied: "Yes, but when I discovered it, it stayed discovered."

The iPod Ecosystem

The NYT (The iPod Ecosystem) has an interesting description of the "ecosystem" surrounding the iPod:

An entire ecosystem has emerged around the music player, introduced by Apple in October 2001. Other manufacturers had produced MP3 players earlier. But the simple design of the iPod, plus Apple's iTunes store, quickly helped Apple to dominate the market. And that simple design — some might even call it bland — encouraged people to personalize the machine.

Then numbers are quite impressive:

Apple sold 32 million iPods, or one every second. But for every $3 spent on an iPod, at least $1 is spent on an accessory, estimates Steve Baker, an analyst for the NPD Group, a research firm. That works out to three or four additional purchases per iPod.

Call me an academic, but here's why I prefer the language of networks to ecosystems. Ecosystems infer evolutionary (and relatively unintelligent) design while networks are, in most cases, intelligently, or at least intentionally, designed. Jobs and Co. have done a remarkable job designing the iPod network. Granted, Apple should be able to by now, having failed to build effective networks around so many of their previous products--from the original Macintosh to the Newton to the failed clones market. Nevertheless, they have succeeded brilliantly here--by focusing first on the consumer experience but then, second, on the entire set of related products and services that bring value to that experience:

That obviously makes accessory makers happy. It thrills retailers, whose profit margin on the accessories is much higher than on an iPod. And it delights Apple because the racks of add-ons made just for the iPod — 2,000 different items at last count — send a strong statement to consumers that the Apple player is far cooler than a Creative or Toshiba player, for which there are few accessories.

So far, Apple has managed to limit their greed this time and, in the process, get a smaller slice of what grew to a large pie. However, it's not too late for them to revert back to their old ways.

Some creations, like Mickey Mouse for Disney or Barbie dolls for Mattel, created an enormous market for accessories, but most of those items, like the Mickey Mouse watch or the Barbie Dream House, were licensed or made by the same company that created the original product. In contrast, Apple has encouraged a free-for-all, and its own share of the accessories market remains small...That will change. Apple is aware of the power of this market and is getting more active. Indeed, at the recent Macworld conference, Apple demonstrated that it wanted more of this lucrative field. It made a splash with an attachment, the $50 Radio Remote, that plays FM radio through the iPod.

I can't help but marvel how, in building this network, Apple could share the growth while never losing sight of the strategic high ground--those aspects of the entire network that would provide profitability and defensibility. That takes intelligent design. Let's hope Apple can stay that way.

World wide web of good

Posting for Always On, Scott Lenet, Co-founder and Managing Director of venture capital firm DFJ Frontier offers a compelling case study of corporate citizenship. As William McDonough argues, "Commerce is the engine of change." One of DFJ Frontier's funded ventures,World of Good, is attempting, and so far succeeding, to change the ways that first world consumption affects third world production (and social) systems.

When consumers can get information easily that allows them to compare alternatives, prices reach equilibrium and unfair advantage tends to disappear.

But imagine this model turned upside down, where the power of the internet could be used to help uninformed suppliers in a market where buyers have all the control. Craft producing villages around the world have little access to market information on the selling price of their goods as they move through the global supply chain. These producers rarely have the ability to assess the value of their labor and are unable to negotiate prices to ensure that they live above the poverty line.

This is why World of Good founder Priya Haji has introduced web-based floor pricing technology for worldwide distribution to craft producers. Literally anywhere in the world, a producer, their representative, or a buyer can test pricing in real time. This calculator shows how the price of goods compares to United Nations indicators of poverty and international labor wage data. Immediately, artisans can use this information to negotiate market prices while buyers with conscience can see how their pricing policies compare to their intentions. Using the internet, World of Good embodies a key requirement for free markets: the free flow of information.