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Showing posts with label innovation. Show all posts
Showing posts with label innovation. Show all posts

Monday, March 16, 2015

Chasing Unknown Unknown, The Spirit Of Silicon Valley

A framework that I use to think about problems disruptive technology could help solve is based on what Donald Rumsfeld wrote in his memoir, Known and Unknown:
Reports that say that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns -- the ones we don't know we don't know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones.
A couple of decades ago technology was seen as means to automate manual processes and bring efficiency. While largely automation is a prerequisite in the modern economy the role of technology has significantly changed to create unique differentiation and competitive advantage against peers in an industry. Many people are working on making things betters, cheaper, and faster or a combination of these three. This approach—solving known known—does provide incremental or evolutionary innovation and market does reward it.

But, the Silicon Valley thinks differently.

The Silicon Valley loves to chase known unknown problems, the moonshots, such as self-driving vehicles, providing internet access to every single human being on the earth, and private shuttles to space. These BHAG are totally worth chasing. To a certain degree, we do know and experience what the actual problem is and we can even visualize what a possible solution could look like. As counterintuitive as it may sound, but it is relatively easy to have entrepreneurs and investors rally towards a solution if they can visualize an outcome even if solving a problem could mean putting in a monumental effort.
"We can be blind to the obvious, and we are also blind to our blindness.” - Daniel Kahneman
Most disruptive products or business models have a few things in common: they focus on latent needs of customers, they imagine new experiences and deliver them to customers, and most importantly they find and solve problems people didn’t know they had and couldn’t imagine it could be solved - the unknown unknown.

Chasing unknown unknown requires bold thinking and a strong belief in you quest and methods to get there. Traditional analytical thinking will take you to the next quarter or the next year with a double digit growth but won’t bring exponential growth. These unknown problems excite me the most and I truly enjoy working on them. Unknown unknown is the framework that I use to understand the potential of disruptive technology such as Big Data and Internet of Things. If technology can solve any problem which problem you want to have it solved is how I think.

Chasing unknown unknowns is not an alternative to go for moonshots; we need both and in many cases solving an unknown unknown journey starts by converting it to a known unknown. The key difference between the two is where you spend your time -  looking for a problem and reframing it or finding a breakthrough innovation for a known corny problem. A very small number of people can think across this entire spectrum; most people are either good at finding a problem or solving it but not at both.

Discovering unknown problems requires a qualitative and an abductive approach as well as right set of tools, techniques, and mindset. Simply asking people what problems they want to have it solved they don’t know they have won’t take you anywhere. I am a passionate design thinker and I practice and highly encourage others to practice qualitative methods of design and design thinking to chase unknown unknowns.

I wish, as Silicon Valley, we don’t lose the spirit of going after unknown unknown since it is hard to raise venture capital and rally people around a problem that people don’t know exist for sure. Empowering people to do things they could not have done before or even imagined they could do is a dream that I want entrepreneurs to have.

Photo courtesy: Ahmed Rabea

Monday, April 30, 2012

Fixing Software Patents, One Hack At Time

Software patents are broken and patent trolls are seriously hurting innovation. Companies are spending more money on buying patents to launch offensive strikes against other companies instead of competing by building great products. There are numerous patent horror stories I could outline where they are being used for all purposes except to innovate. In fact the software patent system as it stands today has nothing to do with innovation at all. This is the sad side of the Silicon Valley. While most people are whining about how software patent trolls are killing innovation some are trying to find creative ways to fix the problems. This is why it was refreshing to see Twitter announcing their policy on patents, Innovator's Patent Agreement, informally called IPA. As per IPA, patents can only be used in an offensive litigation if the employees who were granted the patents consent to it. I have no legal expertise to comment on how well IPA itself might hold up in a patent litigation but I am thrilled to see companies like Twitter stepping up to challenge the status quo by doing something different about it. If you're an employee you want three things: innovate, get credit for your innovation, and avoid your patents being used as an offensive tool. IPA is also likely to serve as a hiring magnet for great talent. Many other companies are likely to follow the suit. I also know of a couple of VCs that are aggressively pushing their portfolio companies to adopt IPA.

The other major challenge with software patents is the bogus patents granted based on obvious ideas. I really like the approach taken by Article One Partners to deal with such patent trolls. Article One Partners crowdsources the task of digging the prior art to identify bogus patents and subsequently forces the US patent office to invalidate them. Turns out that you don't have to be a lawyer to find prior art. Many amateurs who love to research this kind of stuff have jumped into this initiative and have managed to find prior art for many bogus patents. It's very hard to change the system but it's not too hard to find creative ways to fix parts of the system.

I would suggest going beyond the idea of crowdsourcing the task to find the prior art. We should build open tools to gather and catalog searchable prior art. If you have an idea just enter into that database and it becomes prior art. This would make it incredibly difficult for any company to patent an obvious idea since it would already be a prior art. We should create prior art instead of reactively research for it. Open source has taught us many things and it's such a vibrant community. I can't imagine the state of our industry without open source. Why can't we do the same for patents? I want to see Creative Commons of patents.

The industry should also create tools to reverse translate patents by taking all the legal language out of it to bring transparency to show for what purposes that patents are being granted for.

I would also want to see an open source like movement where a ridiculously large set of patents belong to one group - a GitHub of patents. And that group will go after anyone who attempt to impede innovation by launching an offensive strike. If you can't beat a troll then become one.

Silicon valley is a hacker community and hackers should do what they are good at, hack the system — to fix it — using creative ways.

Photo: Opensource.com

Monday, October 31, 2011

Bangalore Embodies The Silicon Valley

I spent a few days in Bangalore this month. This place amazes me every single time I visit it. Many people ask me whether I think Bangalore has potential to be the next Silicon Valley. I believe, it's a wrong question. There's some seriously awesome talent in India, especially in Bangalore. Don't copy the Silicon Valley. There are so many intangibles that Bangalore won't get it right. And there's no need to copy. Create a new Silicon Valley that is the best of both worlds.

If you want some good reading on what makes silicon valley the Silicon Valley, read the essay "How to be Silicon Valley" by Paul Graham. Bangalore does have some of these elements - diversity, clusters, a large number of expats etc. It's quickly becoming a true cosmopolitan city in India. You don't need to know the local language (Kannada) to live there. It does have a few good colleges such as IIM and IISC, but no IIT. The real  estate boom in Bangalore is a clear indicator of what's going on in the city with regards to the spending power of the middle class and the upper middle class. Most large IT multinationals have a campus in Bangalore. The companies such as Accenture have more people in Bangalore than in the US.

So, what's wrong?

Lack of entrepreneurial mentorship

If you go back to the roots of the early success of the Silicon Valley you will find that the venture capitalists community mentored the entrepreneurs to bring innovation to life. Steve Jobs had an idea, but no business plan. Some of the entrepreneurs became serial entrepreneurs and some became the investors who in turn mentored other entrepreneurs. This cycle continued. I don't see this in Bangalore. Not only the VC funding is not easily accessible (more on this below), but there are no early investors that I see are spotting the trends and mentoring the entrepreneurs.

I spoke to many entrepreneurs in Bangalore. Let me tell you - they do not lack the entrepreneurial spirit. They are hungry and they are foolish. And they are chomping at the bit to work on an exciting idea, but they do lack someone to mentor them and take them through the journey.

Where have all the designers gone?

A couple of years ago I was invited at the National Institute of the Design (NID), a premier design school in India, for a guest lecture. They told me that design is not a discipline that easily attracts good talent in India. They are competing with the engineering schools. India lacks designers. This is the age of experience start-ups. A very few engineers have the right design mindset. If they want to be successful, they absolutely need to work with the designers who are impossible to find and hire. This talent gap is hurting to manifest the vision of a founder into a product that the consumers would love to use. Flipkart and Red Bus are my favorite start-ups but they are few and far between.

Math and Science would only take you so far

It's not just Math and Science that has created the Silicon Valley. It's the right balance of creativity, business acumen, and engineering talent. The schools in India, even today, are not set up to let students be more creative. They are still fixated on Math and Science since they guarantee good jobs. The Silicon Valley entrepreneurs followed their dreams. In the US, it's about studying what you like and chase a career that you are happy with and not to pick a certain kind of education just because they provide good jobs. Unfortunately, creativity is hard to teach. It's ingrained into the culture, society, and the systems. If India has to get this right, this needs to start at the education and a support system that has a place for jobs other than Math and Science.

I have been following the education reforms in India and private sector investment into K-12 schools. They are encouraging. I don't believe Bangalore or India for that matter will have math or science issue anytime soon, but it will certainly have entrepreneurial issues to jump start new companies and manage their ever growing engineering workforce. I was invited to speak at IIM Ahmedabad, one of the best business schools in India. During my conversation with the faculties, I was told that the most pressing issue for the elite business schools in India is to scale their efforts to create the new class of mid-management that can manage the rapidly growing skilled workforce.

Obama keeps saying more and more people in the US should study math and science to be competitive. I don't believe that's the real competition. The real competition is what can you do if you did know math and science or if you had access to people who knew it.

Lack of streamlined access to capital

A lot has been written about this obvious issue and I don't want to beat this further. I just want to highlight that despite of all the money that the individuals and large corporations have earned in India, a very little is being invested into venture capital since the VC framework, processes, and the regulations aren't as streamlined. It's not a level playing field. In the Silicon Valley, the venture money is commodity. If you have a great idea, team, or a product, the investors will run after you to invest into your company. Bangalore is far from this situation. But it shouldn't have to be. What's missing is not the available money but a class of people who can run local funds by investing into the right start-ups. Most US VC firms have set up shops in India, but I don't think that's enough to foster innovation at the grassroots level. Bangalore needs Indian firms to recognize the need for a local VC community that can work with the system to make those funds available to the entrepreneurs.

The picture: I took this picture inside one of the SAP buildings in Bangalore during the week before Diwali.

Thursday, July 28, 2011

Plotting for serendipity

I rarely eat lunch at my desk. Eating lunch in a cafeteria is such a precious opportunity to waste. I plot for serendipity. That's right. Some of the best conversations that I have had with people — on my way to a cafetaria or in the cafeteria — are purely serendipitous, but they're not purely accidental. I even pick a cafeteria that requires me to walk a little more. I believe you can always create opportunities for good things to happen to you. When people say "It's a small world", they are so wrong. The world isn't small but they're at the right place at the right time to think it's a coincidence. The coincidences do happen but there's a larger force behind orchestrating the possibilities for such coincidences to occur.

The same applies to creativity. You can design an epiphany.

I have heard people say that they had an epiphany while they were in shower. It's not the shower but it's illumination followed by a prolonged incubation, two phases of creativity. The other two phases are preparation and verification. Preparation is a phase where you decide that you want to solve a specific problem. When you continue to work on a problem over a period of time, your brain, the unconscious, never stops working on it even if consciously you're not spending any time on it. This is called incubation. This lasts for a while. The "shower moment" is the illumination phase where you finally figured out a solution, after your brain unconsciously kept solving it for the entire night, and hence the metaphor of glowing bulb for innovation. What remains is the verification phase to prove that the solution works. We all do this, but we don't spend enough time on the incubation phase and hence many ideas don't go beyond that. You can plot for this epiphany by not letting a problem go for a while even though you think that you don't have enough time to work on it. I tell my students to start working on their projects early on for better results for that purpose. It feels counterintuitive that you could solve a problem by spending less time on it as long as you keep solving it for a longer duration off and on.

I have blogged about cloud being a natural platform to design tools that could create network effects. The tools that create network effects also offer an opportunity for digital serendipity. I have discovered many people through Twitter and learned quite a few things that I would have never explicitly made an attempt to learn. And, I'm not the only one who has had such an experience. I'm a big fan of social tools and platforms that enable opportunities for such serendipity to occur. There're only so many cafes and water fountains in the physical world; the digital world is far bigger in that sense.

Design your routine to plot for serendipity and epiphany and credit yourself instead of the shower. Creativity can be tricked. You will be positively surprised.

Cross-posted on my personal blog

Sunday, April 10, 2011

Taking The Quotes Out Of "Design Thinking"

Bruce Nussbaum, a design thinking thought leader and a professor of Innovation and Design at Parsons The New School of Design, recently wrote that Design Thinking Is A Failed Experiment.

He claims that:

"Design Thinking has given the design profession and society at large all the benefits it has to offer and is beginning to ossify and actually do harm."


I would argue otherwise. Design thinking is not a catchphrase anymore, and that perhaps is an issue for someone like Bruce who wants to invent a new catchphrase to sell his book. When I tweeted his post, Enric Gili - a friend, co-worker, and a design thinker whom I respect - had to say this:

I couldn't agree anymore. I have learned, practiced, and taught design thinking, for living. I have worked with folks from IDEO, closely, very closely. I have mentored students at Stanford d.school and I live and breathe design thinking. I don't think of it as a method that goes out of fashion. For me, it's a religion, a set of values, and an approach that I apply to all things that I do on daily basis.

I have taken the quotes out of "design thinking".

Just as I don't get excited by the rounded corners and gradients of Web 2.0 I don't think of design thinking as voodoo dolls. To some, this appears to be a failure of design thinking. Design thinking has gone mainstream; it is not dead. What is dead is a belief that it's a process framework that can fix anything and can even cook dinner for you. Design thinking is an approach that codifies a set of values. Design thinking is not an innate skill. It can be taught, gained, and practiced.

"I place CQ within the intellectual space of gaming, scenario planning, systems thinking and, of course, design thinking. It is a sociological approach in which creativity emerges from group activity, not a psychological approach of development stages and individual genius."

Design thinking is ambidextrous; it advocates abductive as well as deductive thinking. The "design" in design thinking is an integrative discipline. As my boss used to tell me, you can't have Ph.D in design. Unless you're a smartypants clever clogs, it doesn't make sense. If CQ is a sociological-only approach, it fundamentally defies the inclusive and integrative values of design, which is a vital driver for creativity.

"It’s 2020 and my godchild Zoe is applying to Stanford, Cambridge, and Tsinghua universities. The admissions offices in each of these top schools asks for proof of literacies in math, literature, and creativity. They check her SAT scores, her essays, her IQ, and her CQ."

It's 2020 and IDEO has gone out of business and so is d.school. I am applying for a new job and they measure my CQ. I miserably fail at this CQ thing, perhaps. Do I care? Absolutely not. I have got my design thinking value system that may not be catchy to sell a book, but good enough to get my job done, spectacularly.

Creative Quotient? Give me a break.

Monday, November 15, 2010

10 Business Books In 2010

These are the 10 business books published in 2010, that I would recommend you to read. Originally, I wrote this on Quora, in response to "What are must read business books of 2010?". Yes, I have read all of them, and no, they are not in any specific order.

1) What the Dog Saw by Malcolm Gladwell

I am a big fan of Malcolm Gladwell and his style. This is a compilation of his "The New Yorker" stories. Even though the articles are available on his website, this book makes it a great read.

2) Cognitive Surplus by Clay Shirky

The next time someone asks you how come people have so much time to blog, answer questions on Quora, or contribute to Wikipedia, ask them to read this book.

3) The Big Short by Michael Lewis

Want to know all about CDO and subprime mortgage and still be entertained? This is the book. Michael Lewis has great storytelling skills that makes serious and complex topics fun to read. I like this book as much as I liked Moneyball - http://amzn.to/b9YPx9

4) Open Leadership by Charlene Li

If you liked Groundswell - http://amzn.to/c8faH5 - you will like this as well. If you are interested in organizational transformation through social media, this will make a great read. Social media adoption can certainly make the leaders more credible, open, and transparent. Being a social media freak and an enterprise 2.0 strategist, I loved this book.

5) Engage by Brian Solis

This book is Seth Godin meet Social Media. It's a must-read if you are a marketer, trying to understand the impact of social media on your brand and working on engaging your customers using social media. Brian Solis has a fluid style with a lot of relevant examples.

6) The New Polymath by Vinnie Mirchandani

Vinnie is a great enterprise software analyst and a prolific blogger. I closely follow his work. This is an upbeat book that will excite the technologists as well as the business folks. If you think you have a stretch goal and want to change the world, this book will further stretch your stretch goals, and will give you a reason and purpose, to get out of bed every morning and run for it.

7) Rework by Jason Fried

I have followed 37Signals and Jason's blog. This book puts everything together with illustrations and a simple style making it easy to read, just like 37Signals. If you are itching to be an entrepreneur, this might make you take that leap. If you're starting out and want inspiration and design principles, this is the book. All design is re-design and so is this book.

8) The Facebook Effect by David Kirkpatrick

Some watch the movie, I prefer to read a book. The book is more accurate than the movie. Well, duh. David is a great writer, and he used the access that he had to Zuckerberg and Facebook, to produce a great book. It's quite insightful.

9) Gamestorming by Dave Gray

I love XPLANE. They do a great job and now they are part of Dachis group where I am expecting them to do even better. It's incredibly difficult to take complex concepts and simplify to communicate to any audience. The book outlines great approaches to accomplish the simplicity and facilitate learning, discovery, and decision making.

10) Delivering Happiness by Tony Hsieh

Zappos is a great company. I have learned a lot from its culture and from Tony's management style. This is a must-read, if you believe you want to excel in serving your customers and have your entire team live by those values.

And this is the first 2011 book that you may want to read:

Knowing Umair, this will be a great book.

Thursday, April 22, 2010

Disruptive Cloud Computing Startups At Under The Radar - NoSQL - Aspirin, Vicodin, and Vitamin

It was great to be back at Under The Radar this year. I wrote about disruptive cloud computing start-ups that I saw at Under The Radar last year. Since then the cloud computing has gained significant momentum. This was evident from talking to the entrepreneurs who pitched their start-ups this year. At the conference there was no discussion on what is cloud computing and why anyone should use it. It was all about how and not why. We have crossed the chasm. The companies who presented want to solve the “cloud scale” problems as it relates to database, infrastructure, development, management etc. This year, I have decided to break down my impressions into more than one post.

NoSQL has seen staggering innovation in the last year. Here are the two companies in the NoSQL category that I liked at Under The Radar:

Northscale was in stealth mode for a while and officially launched four weeks back. Their product is essentially a commercial version of memcached that sits in front of an RDBMS to help customers deal with the scaling bottlenecks of a typical large RDBMS deployment. This is not a unique concept – the developers have been using memcached for a while for horizontal cloud-like scaling. However it is an interesting offering that attempts to productize an open source component. Cloudera has achieved a reasonable success with commercializing Hadoop. It is good to see more companies believing in open source business model. They have another product called membase, which is a replicated persistence store for memcached – yes, a persistence layer on top of a persistence layer. This is designed to provide eventual consistency with tunable blocking and non-blocking I/Os. Northscale has signed up Heroku and Zynga as customers and they are already making money.

As more and more deployments face the scaling issues, Northscale does have an interesting value proposition to help customers with their scaling pain by selling them an aspirin or vicodin. Northscale won the best in category award. Check out their pitch and the Q&A:

GenieDB is a UK-based start-up that offers a product, which allows the developers to use mySQL as a relational database as well as a key-value store. It has support for replication with immediate consistency. Few weeks back I wrote a post - NoSQL is not SQL and that’s a problem. GenieDB seems to solve that problem to some extent. Much of the transactional enterprise software still runs on an RDBMS and depends on the data being immediately consistent. The enterprise software can certainly leverage the key-value stores for certain features where RDBMS is simply an overhead. However using a key-value store that is not part of the same logical data source is an impediment in many different ways. The developers want to access data from single logical system. GenieDB allows table joins between SQL and NoSQL stores. I also like their vertical approach of targeting specific popular platforms on top of mySQL such as Wordpress and Drupal. They have plans to support Rails by supporting ActiveRecord natively on their platform. This is a vitamin, if sold well, has significant potential.

They didn’t win any prize at the conference. I believe it wasn't about not having a good product but they failed to convey the magnitude of the problem that they could help solve in their pitch. My advice to them would be to dial up their marketing, hone the value proposition, and set up the business development and operations in the US. On a side note the founder and the CEO Dr. Jack Kreindler is a “real” doctor. He is a physician who paid his way through the medical school by building healthcare IT systems. Way to go doc! Check out their pitch and the Q&A:

Tuesday, January 26, 2010

Silicon Valley Is An Innovation Dagger

It was a routine trip back home from work one of these days. As soon as I boarded the bus the driver asked me: "So, what do you think about Google's announcement regarding China? Will Yahoo follow the suit?". The same bus driver had asked me about my views on NexusOne on the day it was announced. He even has a strong point of view on net neutrality. The other day the librarian showed me a Firefox plug-in that hides your identity from Google. Everyday it's a constant reminder of the demographics that we live in the Silicon Valley. It's an innovation dagger. One edge keeps people to stay on top of cutting edge technology and the other keeps them away from the vast majority of the users that don't live in the valley.

I cannot overemphasize the importance of being surrounded by the smartest of the smart people in the valley. However for entrepreneurs it is equally important to stay grounded in the reality. As cool as iPod was and iPhone is and iPad/iSlate will be it takes years for the products to cross the chasm and many products simply vanish. If you are designing a product in the valley please do me a favor - find your users outside the valley. They are the real people, the mass, that you should be designing for. It took Facebook 5 years to go from 5M users to 350M users and Foursquare is just the beginning of what's more to come. If you are in the valley building the next big thing, be real. Hangout with all the cool kids on the block but don't forget that you will have to cross the chasm and it won't be easy.

Tomorrow Apple is going to announce the tablet. When I take the bus tomorrow I will face the question from the driver: "So, what do you think of the tablet?". While I prepare my answer, check out this hilarious "In The Valley" performance that resonates well with what we see and how we think.

Tuesday, December 15, 2009

India Needs Public Policy And Service Innovation And Not Web 2.0 Companies

The second most populous country with the fourth largest spending power, India, saw a surprising 7.9% YOY GDP growth well above the expectations of 6.3%. The Indian stock market recovered much quicker since the US financial meltdown. In fact one of my friends who oversees sales of a European earthmoving equipments company in India complained that the European manufacturers have not increased their production to meet the increased demand in India due to the faster economic recovery, especially in the infrastructure sector. When I switch on a news channel in India I hear all about incentivizing manufacturing companies to increase indigenous production that will fuel the growth of the industrial sector. I also see commercials ranging from baked potato chips to a service to transfer money using virtual currency on a mobile phone targeted to the fast growing middleclass. The marketers have no problem understanding the rich and the middle-class of India and designing the products for them.

What I don’t see is entrepreneurs catering to the people at the bottom of the pyramid. Vivek Wadhwa’s guest posts on TechCrunch stirred quite a controversy especially the one on the “reverse brain-drain” - the Indians returning to India from US. NYTimes recently carried a story on the innovation pace in India. There are more angel investors in India than even before. A few people from Infosys have started their own VC fund. This is all good but I don’t think that the entrepreneurs are pursuing the right opportunities. I have written before about the opportunities to cater to the people at the bottom of the pyramid and I will repeat again that it will be a huge mistake to equate India’s needs with those of the developed countries. India has a little over 300 million people that are below poverty line (450 million by international definition – who earns less than $1.25). What it simply means that at least the one-third population of India has no guarantee that there will be food at the table and access to affordable healthcare. India has significant challenges in getting the basic services right and educating its people and providing healthcare to them. These people will do just fine without Web 2.0 companies.

Here is an example and an opportunity for the kind of innovation that I am referring to:

Electronic voting machine

India has been trying for many years to improve its voting process where the votes are regularly rigged in many parts of the country – it’s called “booth capturing”. The ex. Chief Election Commissioner N. Gopalaswamy (also father of a close friend) helped revolutionize the voting process with the introduction of electronic voting machines with a tiny little feature called “12 second delay” that made all the difference. This delay prevented the votes to be “stuffed” even if the machine was physically compromised. The machine also has an algorithm to recognize a pattern to detect the votes being cast every 12 seconds and simply discard them if needed. This is a great example where technology is being used to fight the corrupt behavior during the elections.

Universal Healthcare Card

This is a huge opportunity. The Universal Healthcare Card is an attempt to insure 300 million people (below the poverty line) with the cost of $1B, which is a small fraction of overall healthcare spending of $45B, which in turn is only 4% of the GDP. This policy has administrative and operational challenges to fight corruption and to ensure that people below poverty line actually benefit out of this plan. I see this as a socioeconomic problem that technology can help solve to provide accessible healthcare to the people who really need them without any pilferage.

What India really needs the most is the entrepreneurs who can get involved in the public policy and create service innovation to remove the fundamental roadblocks that India has on its way to become a developed nation. We need more people like Nandan Nilekani who left Infosys to spearhead the efforts of the national Unique Identification Project. He is an ultra smart entrepreneur who understands the challenges associated with such a project, has deep passion for public policy, and is fully committed to make things happen.

Are you an entrepreneur up for such a challenge?

Saturday, October 31, 2009

Google Does Not Have Innovator's Dilemma

I asked a question to myself: "Why has Google been incredibly successful in defending and growing its core as well as introducing non-core disruptive innovations?". To answer my own question I ran down Google's innovation strategy through Clayton Christensen's concepts and framework as described in his book "Seeing What's Next". Here is the analysis:

Google's latest disruptive innovation is the introduction of free GPS on the Android phone. This has grave implications for Garmin. To put this innovation in the context it is a "sword and shield" style entrant strategy to beat an incumbent by serving the "overshot customers". The overshot customers are the ones who would stop paying for further improvements in performance that historically had merited attractive price premium. Google used its asymmetric skills and motivation - Android OS, mapping data, and no direct revenue expectations - as a shield to enter into the "GPS Market" to serve these overshot customers. Google later turned its shield into a "sword" strategy by disinteremediating the map providers and incentivizing the carriers with a revenue-share agreement.

On the other hand Google's core search technology and GMail are a couple of examples of "incremental to radical" sustaining innovations where Google went after the "undershot customers". The undershot customers are the ones who consume a product but are frustrated with its limitations and are willingly to switch if a better solution exists. The search engines and the web-based email solutions existed before Google introduced its own solutions. GMail delighted the users who were frustrated with their limited email quota and the search engine used better indexing and relevancy algorithms to improve the search experience. I find it remarkable that Google does not appear to be distracted by the competitors such as Microsoft who is targeting Google's core with Bing. Google continued a slow and steady investment into its sustainable innovation to maintain the revenue stream out of its core business. These investments include the next generation search platform Caffeine, social search, profiles, GMail labs etc.

Where most of the companies inevitably fail Google succeeded by spending (a lot of) money on lower-end disruptive innovations against "cramming" their sustaining innovation. Google even adopted this strategy internally to deal with the dilemma between its sustaining and disruptive innovations. One would think that the natural starting point for Google Wave would be the GMail team but it's not true. In fact my friends who work for Google tell me that the GMail team was shocked and surprised when they found out that some other team built Google Wave. Adding wave-like functionality in the email would have been cramming the sustaining innovation but innovating outside of email has potential to serve a variety of undershot and overshot customers in unexpected ways. This was indeed a clever strategy.

So, what's next?

If I were AT&T I would pay very close attention to Google's every single move. Let's just cover the obvious numbers. The number of smartphone units sold this year surpassed the number of laptops sold and the smartphone revenue is expected to surpass the laptop revenue in 2012. Comcast grew their phone subscribers eight-fold with the current number exceeding 7 million. Google Voice has over 1.4 million users of which 570,000 use it seven days a week. Even though Google does not like its phone bill Google seems to be committed to make Google Voice work. This could allow Google to serve a new class of overshot customers that has a little or no need of land line, desire to stay always-connected, and hungry for realtime content and conversations. Time after time Google has shown that it can disintermediate players along its value chain. It happened to NavTeq and Tele Atlas and it is happening to other players with Google Power Meter and Chrome.

Many people argue that Chrome OS is more disruptive. I beg to differ. I believe that Chrome OS does not have near term disruption trajectory. Being wary of hindsight bias, I would go back to the disruptive innovation theory and argue that Chrome OS is designed for the undershot customers that are frustrated with other market solutions at the same level. For the vast majority of the customers it does not matter. If Google does have a grand business plan around Chrome OS it certainly will take a lot of time, resources, and money before they see any traction. I see the telco disruption happening much sooner since it serves the overshot customers. I won't be surprised if Google puts a final nail in telco's coffin and redefines the telephony.

Thursday, September 17, 2009

True Entrepreneurial Spirit Is Believing In A BHAG

GigaOM has a post "How Start-ups can win big with VCs" that muddies their point of view of having a clear value proposition with not doing something because no one may want this or someone else has already done it. I added the following comments to that post:

I agree with the viewpoint about honing the pitch. However I have a different take on some of the start-ups. It’s one thing not to know what the value proposition is but it is other thing to believe in a BHAG. Many start-ups had huge success when people initially thought that they could live without that. Twitter is one of those examples. Also, there is nothing wrong in duplicating what someone else is doing. Presence of similar companies signal that there is a market. It is now up to the new entrant to beat the competition by solving the problem well. When Google announced Gmail it was one of the last (as of now) web-based email that was introduced. Google would not have released Gmail or even the search engine if they would have thought that other people are already solving this problem.

I welcome the entrepreneurial spirit of the Silicon Valley. This innovation engine is amazing. I was watching the panelists beat up http://anyclip.com at Techcrunch 50 suggesting that the content deals are hard to come by. I liked the answer: “No one thought that we would have a black president one day”. The company acknowledges that it is an astronomic task but the reward is very high if they can pull that one off. We all know the story about Steve Jobs, iTunes, and the music industry. Let’s not forget that we can repeat the history only if we believe into these start-ups and give them an opportunity to succeed.

Tuesday, July 28, 2009

Designing An Innovation Incubator To Prevail Over Innovator's Dilemma

The large scale software companies often deal with the tension between incremental and revolutionary innovation. They know that if they only keep listening to their customers' requests the very same customers will put them out of the business. Clayton Christensen has captured this phenomenon in The Innovator's Dilemma. Over a period of time these companies have managed to execute the incremental innovation really well to deliver the same software release after release and occasionally introduce new products. However most of these companies struggle to incubate revolutionary innovation inside the company since it is fundamentally a different beast. The executives are often torn between funding the revolutionary initiatives to ride the next big wave and funding the incremental innovation that the current customers and the market expects. It is absolutely imperative for the executive management to differentiate between these two equally important but very different types of innovation opportunities. Many companies have set up in-house incubators to bring revolutionary innovation to the market but in most cases the incubators are set up as yet another department inside the company that shares the same legacy and bureaucracy. Following are some suggestions on setting up and running an incubator to avoid the innovation disappear down the rat hole:

6x6 cubicle in Iowa won't cut it: There is nothing wrong with Iowa but I won't build an incubator there. Pick a location that emanates entrepreneurial spirit, attracts talent, and is surrounded by good colleges. Scout for a location that has good work-life characteristics where people feel the energy and have social outlets - pubs, hiking trails, good restaurants etc. San Francisco and Palo Alto in the Silicon Valley are a couple of examples of such locations.

I cannot overemphasize the impact of an inspirational physical space that fosters innovation and drives people with insane urge to be creative and build something disruptive. Ditch Steelcase and shop at IKEA. Have a loft-like set-up with open seating, project rooms instead of conference rooms, and have all the furniture on the wheels. Can you write on all the walls? Have alternate comfortable seating all over the places - bean bags, red couches, chairs and coffee tables with tall bar stools. Innovation does not happen in a cubicle. Have an entire team paint the loft with bright colors as a team-building exercise. Pay a mandatory visit to IDEO and d.school in Palo Alto if you haven't already been there.

No process is the new process: The incubator should not inherit your organization's legacy processes. You cannot expect your employees to behave differently to solve a problem if they are restricted by the same process overhead. Throw your application policing process out of the window and let people experiment with whatever works well for them. One of the main reasons why incubators fail because they rely on the organization's product roadmap and capabilities. Don't pick up any dependencies instead simply consider your organization's capabilities as one more source that you can evaluate for your needs. Use open source as much as you can, build your own partner relationships, and OEM whatever you can.

Pizza-size multidisciplinary teams: Can your entire product team be fed on two large pizzas? Smaller and tighter teams reduce the communication overhead, churn, and produce amazing results. Don't follow your corporate headcount calculations. Go for smaller teams. Hire I-shaped and T-shaped people to form a multidisciplinary team. Have a good mix of internal people who understand the business that you are into and the external people that are entrepreneurs or have worked in incubators. Get help from the external recruiters to find the right people since the internal recruiters may or may not have expertise to find and hire the kind of people that you are looking for.

Be agile and design think everything: Design thinking and agile methodology empower the teams to apply an ambidextrous and iterative approach to take on the revolutionary ideas in highly ambiguous environment. Encourage wild ideas, defer judgment, and be iterative. Be visual in storytelling, stay close to your customers and end-users, and have persuasive, catalysts, and performance design. Focus on useful over usable. Have a good-enough mindset and ship often to get continuous feedback to keep improving. Iterate as fast as you can and keep your sprint cycles small.

Seed, Round A, and Round B: This is where many organizations get hung up on an upfront $200M business case to qualify the business opportunity as incubation-worthy. If all the start-ups required to have a detailed upfront business model we would not have had Twitter, Facebook, Google, Craigslist etc. The same incremental business case mindset simply won't work for revolutionary innovation. The disruptive innovation has characteristics that many people haven't seen their in their lifetimes. The organization need to adopt the VC model and embrace the high risk high reward business environment. There will be plenty of failures before you hit a jackpot but that's the fundamental premise of VC funding. Have a separate budget and an investment decision process that provides autonomy to an incubator to make their own decisions without going through a long chain of command. Have multiple rounds of funding to ensure that you are tracking the potential of the innovation right from the seed to the maturity.

Explore all exit strategies: Don't expect to go-to-market with everything that comes out of an incubator. The mainstream product teams in your organization may or may not embrace and support the innovation citing the reasons "not invented here" or "too radical". Focus on your customers and success stories. If you are successful people will come to you instead of you selling the outcome to the organization. Be courageous and kill the products that are not working out and experiment with other exit strategies such as spin-offs, outright sale etc. Try to keep the product portfolio moving. High volume and turnover is a good thing for an incubator. Financial success is not the only success that counts; happy customers, re-invigorated organization, and global visibility as an innovation player are equally important KPI.

Reward high risk behavior: People work for uncertain and highly ambiguous projects for two reasons - higher reward for higher risk and passion to build something new. Design your compensation structure that is fundamentally different than your corporate title-driven compensation and includes a generous equity option. The titles don't mean much when it comes to an incubator. What really matters is the skills, attitude, and the knowledge that people bring to the table. The career path in an incubator is very different than a conventional corporate ladder. Make sure that all the people that are part of an incubator truly understand what they are signing up for and are passionate for the work rather than simply waiting to be a "Chief Innovation Officer".

Monday, March 9, 2009

Creating, Nurturing, and Sustaining Innovation Clusters

McKinsey has partnered with the World Economic Forum to create an “Innovation Heat Map" to identify innovation clusters based on the analysis of the variables that drive innovation. The clusters are plotted on a classic McKinsey 2x2 that measures the size of a cluster on momentum versus diversity. I would encourage you to read the detailed analysis and look at the innovation heat map. The clusters are classified as:

Dynamic oceans: Large and vibrant innovation ecosystems with continuous creation and destruction of new businesses. Leading innovators and primary sectors change organically as the hub frequently reinvents itself through significant breakthrough innovations.

Silent lakes:
Slow-growing innovation ecosystems backed by a narrow range of very large established companies that operate in a handful of sectors. These clusters are frequently the source of a steady stream of “evolutionary” innovations and step-wise improvements.

Shrinking pools:
Innovation hubs that are unable to broaden their areas of activity or increase their lists of innovators and so find themselves slowly migrating down the value chain, as their narrow sector becomes less innovation driven and increasingly commoditized.

Hot springs:
A small and fast-growing hub that relies on a small number of companies to establish itself as a relevant world player in a narrow sector.

While I applaud the efforts behind analyzing the vast amount of indicators to find patterns that explain certain macroeconomic innovation trends I disagree with the idea of measuring innovation based on number of patents. The effectiveness of our (US) patent system to measure innovation effectively across industries is questionable. How many of these patents are actually converted into real innovations? This problem is exasperated when we involve the patent systems of the countries across the globe.

This analysis assumes minimum infrastructure base as a qualifier to level the playing field. Though I do appreciate the intent of this assumption, this approach leaves out the countries who innovate despite of poor infrastructure such as India and China. An alternate approach could have been a weighted cluster that focuses on the efficiency of the clusters to demonstrate the untapped innovation potential due to lack of infrastructure.

These clusters provide an opportunity to explore some correlations. Hot Springs regions' growth is correlated to untapped natural resources and recent influx of skilled immigrants. This might explain Canada and Australia being Hot Spring regions due to their untapped natural resources and the immigration policies designed to attract highly skilled an well educated prospective immigrants.

To make this analysis even more compelling I would like to go back few years more than the current nine years of data and choose time-based visualization such as Gap Minder. This might reveal some interesting patterns about how the clusters grow from small to big and vice versa and change quadrants as the years go by. This visualization would not only allow to add filters but would also allow to track relative progress of a subset of clusters. We might also be to see how the clusters move from silent lake to dead pool since they cannot innovate themselves out of the current crisis e.g. auto and manufacturing regions in the US.

Wednesday, December 24, 2008

Nokia Is The New Blackberry Of The Emerging Countries

Nokia announced mobile email service, Mail on Ovi, currently targeting the emerging markets.
Nokia has had great success in selling reliable and inexpensive handsets in the emerging markets. In the countries such as India the consumers never used the voice mail on their landlines and went through the mobile revolution to use SMS as a primary asynchronous communication medium. Many of these users are not active email users, not at least on their mobile devices. If Nokia manages to provide ubiquitous user experience using Ovi to bridge email and SMS on not-so-advanced-data-networks it can cause disruption by satisfying asynchronous communication needs of hundreds of thousands of users.

The smartphones would certainly benefit out of this offering and give Blackberry a good run for their money. Nokia completed the Symbian acquisition that makes them a company whose OS powers 50% of all the smartphones in the world. Symbian is still a powerful operating system powering more than 200 million phones and it is open source and it is supported by Nokia. The emerging countries haven't yet gone through the data revolution and Nokia is in great position to innovate.

Monday, November 17, 2008

Microsoft Cloud Computing Blogger Roundtable

Today Microsoft announced the cloud offering for Exchange and SharePoint. I was invited to participate into the Microsoft Blogger round table that took place after the announcement as an initiative by Microsoft to establish relationship with the bloggers and thought leaders in the cloud computing area.

The launch event, attended by select customers, partners, bloggers, and the press, included a demo that articulated the seamless ubiquity of the solution – from the cloud to on-premise and vice versa reiterating the client-server-service strategy. Microsoft also iterated their commitment to continue investing massively into the data centers and also emphasized commitment to sustainability.

When asked about the SLA the answer was that the SLA is based on availability, security and privacy, and recovery time in the event of a disaster based on the geography. The SLA is three 9.

Stephen Elop, president of the Microsoft Business Division at Microsoft dismissed the possibility of slow online adoption due to the continued investment into the on-premise products commenting that the customers will still need an on-premise client - some kind of “local processing” - citing Google Chrome (without naming it)

The event was followed by a blogger round table that I participated into. This was an effort by Microsoft to establish relationship with the bloggers and thought leaders in the cloud computing, Enterprise 2.0, and social innovation area. It was an interesting conversation on the topics such as Microsoft embracing the cloud computing culture as an organization, better ways to engage with the bloggers, cloud computing adoption concerns, messaging issues around Microsoft products, SharePoint as a platform on Azure etc.

The discussion was quite open and well moderated by David Spark. Microsoft expressed the desire to better connect with the thought leaders and bloggers in the cloud computing area. Following is a list of some of the bloggers that were at the table:

Jeff Nolan – Enterprise 2.0
Ben Metcalfe – Co-founder of the Data Portability group
Salim Ismael – Headed Yahoo Brickhouse in his previous career
Phil Wainwright – from ZDNet
Geva Perry
Tom Foremski
Adrian Chan
Deb Schultz
Ohad Eder

Friday, October 31, 2008

First Click Free - Opportunity For The Publishers To Promote Previously Undiscoverable Content

Nick has posted his analysis on Google's First Click Free . This free service allows the content providers to participate into it and promote their content by making the first click free when users discover the content via Google and subsequently enforce registration or subscription for the rest of the content.

I think this is a great idea! I am personally against the walled garden approach and do not believe in registrations and subscriptions just because content providers haven't managed to convince me so far to register or subscribe to for their content. This is a great opportunity for the publishers to showcase their content by making the first link free, demonstrate the value proposition, and drive traffic towards the paid content.

The discussion on the service has so far centered around:
  • Google making other search engine's users second-class citizens and not sticking to an unmediated role.
  • Users' ability to trick the content providers to get access to all the pages by acting as if the request is coming from a Google bot
I do not buy into the criticism around Google's unmediated role. No one is stopping the other search engines to build a similar service and work with the content providers. Though I would expect Google to somehow differentiate the first click free content from the always free content on the search results so that users don't feel that they are being tricked.

I also do not buy into the argument that users can trick the content providers by faking the request as if it is coming from a Google bot. Google can very easily solve this technological challenge to ensure that only the Google bot and no one else gets access to all the free content.

As much as I appreciate and value this service I suspect that the many publishers won't get it. I hope publishers don't ask Google to pay for the traffic instead of being happy that Google is sending them the traffic. I also see a challenge and an opportunity for the publishers to redesign their website to convert the first free click into a registration, subscription, or a future visit.

Saturday, May 3, 2008

Cloud computing: adoption fears and strategic innovation opportunities

The recent CIO.com article lists out the top three concerns that the IT executives have regarding the adoption of cloud computing - security, latency, and SLA. These are real concerns but I don't see them inhibiting the adoption of cloud computing.

Adoption fears

Security: Many IT executives make decisions based on the perceived security risk instead of the real security risk. IT has traditionally feared the loss of control for SaaS deployments based on an assumption that if you cannot control something it must be unsecured. I recall the anxiety about the web services deployment where people got really worked up on the security of web services because the users could invoke an internal business process from outside of a firewall.

The IT will have to get used to the idea of software being delivered outside from a firewall that gets meshed up with on-premise software before it reaches the end user. The intranet, extranet, DMZ, and the internet boundaries have started to blur and this indeed imposes some serious security challenges such as relying on a cloud vendor for the physical and logical security of the data, authenticating users across firewalls by relying on vendor's authentication schemes etc. , but assuming challenges as fears is not a smart strategy.

Latency: Just because something runs on a cloud it does not mean it has latency. My opinion is quite the opposite. The cloud computing if done properly has opportunities to reduce latency based on its architectural advantages such as massively parallel processing capabilities and distributed computing. The web-based applications in early days went through the same perception issues and now people don't worry about latency while shopping at Amazon.com or editing a document on Google docs served to them over a cloud. The cloud is going to get better and better and the IT has no strategic advantages to own and maintain the data centers. In fact the data centers are easy to shut down but the applications are not and the CIOs should take any and all opportunities that they get to move the data centers away if they can.

SLA: Recent Amazon EC2 meltdown and created a debate around the availability of a highly centralized infrastructure and their SLAs. The real problem is not a bad SLA but lack of one. The IT needs a phone number that they can call in an unexpected event and have an up front estimate about the downtime to manage the expectations. May be I am simplifying it too much but this is the crux of the situation. The fear is not so much about 24x7 availability since an on-premise system hardly promises that but what bothers IT the most is inability to quantify the impact on business in an event of non-availability of a system and set and manage expectations upstream and downstream. The non-existent SLA is a real issue and I believe there is a great service innovation opportunity for ISVs and partners to help CIOs with the adoption of the cloud computing by providing a rock solid SLA and transparency into the defect resolution process.

Strategic innovation opportunities

Seamless infrastructure virtualization: If you have ever attempted to connect to Second Life behind the firewall you would know that
it requires punching few holes into the firewall to let certain unique transports pass through and that's not a viable option in many cases. This is an intra-infrastructure communication challenge. I am glad to see with seamless navigation in and out of the firewall. This is a great example of a single sign on that extends beyond the network and hardware virtualization to form infrastructure virtualization with seamless security.

Hybrid systems: The IBM example also illustrates the potential of a hybrid system that combines an on-premise system with remote infrastructure to support seamless cloud computing. This could be a great start for many organizations that are on the bottom of the S curve of cloud computing adoption. Organizations should consider pushing non-critical applications on a cloud with loose integration with on-premise systems to begin the cloud computing journey and as the cloud infrastructure matures and some concerns are alleviated IT could consider pushing more and more applications on the cloud.
Google App Engine for cloud computing is a good example to start creating applications on-premise that can eventually run on Google's cloud and to allow people to push their applications on Amazon's cloud. Here is a quick comparison of Google and Amazon in their cloud computing efforts. Elastra's solution to deploy EnterpriseDB on the cloud is also a good example of how organizations can outsource IT on the cloud.

Service innovation: I see many innovation opportunities for the ISVs and partners to step in as trusted middleman and provide services to fuel the cloud computing adoption. SugarCRM recently announced a reseller partnership with BT to reach out to 1.2 million business customers of BT and sell them on-premise and SaaS CRM. I expect to see the ecosystem around the cloud computing and SaaS vendors grow significantly in the next few years.

Monday, March 31, 2008

Research labs and innovation priorities in an IT organization

Earlier this month HP announced that HP labs is going to focus on 20-30 large projects going forward instead of focusing on large number of small projects. If you compare the top 10 strategic priorities for 2008 that Gartner announced late last year you would find a lot of similarities even though HP's projects are not necessarily designed to address only the short term priorities. Quick comparison:

HP : Gartner
  • Sustainability: Green IT
  • Dynamic Cloud Services: Web Platform & SOA + Real World Web
  • Information explosion: Metadata management + Business Process Modeling
“The steps we’re taking today will further strengthen Labs and help ensure that HP is focused on groundbreaking research that addresses customer needs and creates new growth opportunities for the company.”

The role of a traditional "lab" in an IT organization has changed over last few years to focus on the growth and value projects that strategically aligns with company's operational, strategic, management, and product innovation priorities. The researchers have been under pressure to contribute significantly to the efforts that are directly linked to the product lines. There are pros and cons of being research-oriented versus product-oriented and it is critical that researchers balance their efforts. I firmly believe that labs should be very much an integral part of an organization and anything that they do should have a direct connection to the organization.

“To deliver these new, rich experiences, the technology industry must address significant challenges in every area of IT – from devices to networks to content distribution. HP Labs is now aligned to sharpen its focus on solving these complex problems so HP and its customers can capitalize on this shift.”
Traditionally labs have been perceived a cool place to work where you can do whatever you want without any accountability towards company's strategy and this poses a serious credibility issues for some labs regarding their ability to contribute towards the bottom line. I agree that the research organization should be shielded from the rest of the organization or incubated to a certain extent to protect the disruption in the ongoing business and allow researchers to focus and flourish in their efforts but eventually the efforts should be integrated well into the organization with the stakeholders having enough skin in adopting, productizing, and possibly commercializing what comes out of a lab. Credibility of a lab in an organization goes long way since the product development organizations largely control what customers would actually use, at least in IT organizations. Many innovations that come out of a lab may not even see the light of day if the research organization does not have credibility to deliver what customers actually want. Innovation by itself is not very useful until it is contextualized with the customers' and users' needs to solve specific problems.

Tuesday, March 25, 2008

Alaska Airlines expedites the check-in process through design-led-innovation

Southwest airlines is known to have cracked the problem of how to effectively board the aircraft and Disney specializes in managing the crowd and long lines. Add one more to this list, Alaska Airlines. Fast Company is running a story on how Alaska Airlines has been designing the check-in area to reduce the average check-in time at the Anchorage airport . This is a textbook example of design-led-innovation and has all the design thinking and user-centered design elements - need finding, ethnography, brainstorming, rapid prototyping, and end user validation. Alaska Airlines visited various different places to learn how others manage crowd and applied those learnings in the context of their problem supported by contextual inquiry of the check-in agents. They built low fidelity prototypes and refined them based on early validation.

The story also discusses that Delta is trying a similar approach at Atlanta terminal. Passengers see where they're going. The mental rehearsal or mental imagery aspects of cognitive psychology have been successfully applied to improve athletic performance. There have been some experiments in the non-sports domain, but this is a very good example. Imagine an airport layout where a security check-in process is visible from a check-in line. This could make people mentally rehearse a security check while they wait for their boarding passes so that they are more likely to complete the actual security check much faster.

What makes this story even more compelling that they managed to satisfy customers by reducing the average wait-time and yet saved the cost and proved that saving money and improving customer experience are not mutually exclusive. The innovation does not have to be complicated. They also had a holistic focus on the experience design where a customer's experience starts on the the web and ends at the airport. Some people suggest airplane-shaped boarding areas to expedite the boarding. This is an intriguing thought and this is exactly the kind of thinking we need to break out of traditional mindset and apply the design-thinking approach to champion the solution. I am all in for the innovations to speed up the check-in and boarding as long as I don't have to wear one of those bracelets that could give people debilitating shocks!

Wednesday, March 19, 2008

User-generated content, incentives, reputation, and factual accuracy

Not all user-generated content is factually accurate and it does not have to be that way. I don't expect Wikipedia to be completely accurate and some how many people have a problem with that. Traditionally the knowledge-bases that upfront requires high factual accuracy have been subjected to slow growth due to high barrier to entry. Wikipedia's prior stint, Nupedia, had a long upfront peer review process that hindered the growth and eventually led to the current Wikipedia model as we all know. Google Knol is trying to solve this problem by introducing the incentives to promote the quality of the thoughtocracy. I haven't seen Knol beyond this mockup and I am a little skeptical of a system that can bring in accuracy and wild growth at the same time. I would happy to be proven wrong here.

For an incentive-based system it is important not to confuse factual accuracy with popularity of the content. If content is popular it does not necessarily have to be accurate. If we do believe that incentives can bring in the accuracy, we need to be careful in associating incentives to the accuracy and not to the popularity and that is much harder to accomplish since the incentive scheme needs to rate the content and the author based on the sources, up-front fact-checking, and not just the traffic which could indicate popularity. Mahalo is trying to solve the popularity problem and not the accuracy problem. There have been some attempts to try out the reputation model for Wikipedia but the success has been somewhat underwhelming. I see many opportunities and potential in this area, especially if you can cleverly combine the reputation with the accuracy.

In reality what we need is a combination of restriction free content creation, fact-checking, incentives, and reputation. These models are not mutually exclusive and not necessarily required at all the times and should not be enforced to all the content across all the users. Guided or informative content tend to be more popular irrespective of the factual accuracy since it is positioned as a guide and not as a fact. The people who are in the business of working off the facts such as media reporters, students working on a thesis etc. should watch for the content that is useful, looks reputable, current, and may be factual but is pure wrong and should go through a systematic due diligence fact-checking process.
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