2016/2017 Shifting Battlegrounds and Cautious Predictions for Digital

Innovation slows down in mobile devices but ramps up in bio-engineering. Voice goes mainstream as an interface. Smart environments and under the hood network and toolkit evolution continues apace.

For most people I know, 2016 has ranged between weird and disastrous. But how was it for the evolution of the digital market?

The iPhone lifecycle has arguably defined the current hypergrowth phase of the digital market. So it’s probably a good place to start. In the post Steve Jobs world, it was always going to be a question about how innovative and forward thinking Apple would be. So far, the answer is not very. 2016 was an underwhelming world for iPhone hardware (though Apple has tried harder with MacBooks). Meanwhile, Samsung which you suspect has flourished so far by steadfastly aping Apple, ironically finds itself rudderless after the passing of Steve Jobs. It’s initial attempts at leapfrogging Apple have been nothing short of disastrous with the catastrophic performance of the new inflammable Note phones/ batteries. Google’s Pixel Phone could hardly have been timed better. By all initial accounts (I’m yet to see the phone myself) it’s comparable but not superior to an iPhone 7, Google’s wider range of services and software could help it make inroads into the Apple market. Especially given the overwhelming dominance of Android in the global OS market. The market has also opened up for One Plus, Xaomi and others to challenge for market share even in the west. Overall, I expect the innovation battleground to move away from mobile devices in 2017.

While on digital devices, things have been quite on the Internet of things front. There have been no major IOT consumer grade apps which have taken the world by storm. There have been a few smart home products, but no individual app or product stands out for me. As you’ll see from this list – plenty if ‘interesting…’ but not enough ‘wow’. I was personally impressed by the platform capabilities of enabling IOT applications, form companies such as Salesforce, which allow easy stringing together of logic and events to create IOT experiences, using a low code environment.

AR and VR have collectively been in the news a lot, without actually having breakthrough moment. Thanks to the increasing sophistication of VR apps and interfaces, with Google Cardboard and the steady maturing of the space. But the most exciting and emotive part of AR / VR has been the hololens and holoportation concepts from Microsoft – these are potentially game changing applications if they can be provided at mass scale, at an affordable cost point and if they an enable open standards for 3rd parties to build on and integrate.

Wearables have had a quiet-ish year. Google Glass has been on a hiatus. The Apple Watch is very prominent at Apple stores but not ubiquitous yet. It’s key competitor – Pebble – shut shop this year. Fitbits are now commonplace but hardly revolutionary beyond the increasing levels of fitness consciousness in the world today. There are still no amazing smart t-shirts or trainers.

The most interesting digital device of 2016 though, has been the Amazon Echo. First, it’s a whole new category. It isn’t an adaptation or a next generation of an existing product. It’s a standalone device (or a set of them) that can perform a number of tasks. Second, it’s powered almost entirely by voice commands “Alexa, can you play Winter Wonderland by Bob Dylan?”, third, and interestingly it comes from Amazon, for whom this represents a new foray beyond commerce and content. Echo has the potential to become a very powerful platform for apps that power our lives, and voice may well be the interface of the future. I can see a time the voice recognition platform of Echo (or other similar devices) may be used for identity and security, replace phone conversations, or also become a powerful tool for healthcare and providing support for the elderly.

Behind the scenes through there have been plenty of action over the year. AI has been a steady winner in 2016. IBM’s Watson added a feather to it’s cap by creating a movie trailer. But away from the spotlight, it has been working on gene research, making cars safer, and even helping fight cancer. But equally, open source software and the stuff that goes behind the websites and services we use every day have grown in leaps and bounds. Containerisation and Docker may not be everybody’s cup of tea but ask any developer about Docker and watch them go misty eyed. The evolution of micro services architecture and the maturing of APIs are also contributing to the seamless service delivery that we take for granted when we connect disparate services and providers together to order Uber cabs via the Amazon Echo, or use clever service integrators like Zapier

All of this is held together by increasing focus on design thinking which ensures that technology for the sake of tech does not lead us down blind alleys. Design thinking is definitely enjoying its moment in the sun. But I was also impressed by this video by Erika Hall that urges us to go beyond just asking users or observing them, and being additionally driven by a goal and philosophy.

2016 has also seen the fall of a few icons. Marisa Meyers has had a year to forget, at Yahoo. Others who we wanted to succeed but who turned out to have feet of clay, included Elizabeth Holmes at Theranos, and the continued signs of systemic ethical failure at Volkswagen. I further see 2016 as the year when external hard drives will become pointless. As wifi gets better, and cloud services get more reliable, our need to have a local back up will vanish. Especially as most external drives tend to underperform over a 3-5 year period. Of course, 2016 was the year of the echo-chamber – a reminder that social media left to itself insulates us from reality. It was a year when we were our worst enemies. Even through it was the Russians who ‘Hacked’ the US elections and the encryption debate raged on.

One of the most interesting talks I attended this year was as the IIM Alumnus meeting in London, where a senior scientist from GSK talked about their alternative approach to tackling long term conditions. This research initiative is eschewing the traditional ‘chemical’ based approach which works on the basis that the whole body gets exposed to the medication but only the targeted organ responds. This is a ‘blunt instrument’. Instead, the new approach takes an ‘bio-electronic’ approach. Galvani Bioelectronics, set up in partnership with Alphabet will use an electronic approach to target individual nerves and control the impulses they send to the affected organ, say the pancreas, for diabetes patients. This will be done through nanotechnology and by inserting a ‘rice grain’ sized chip via keyhole surgery. A successful administration of this medicine will ensure that the patient no longer has to worry about taking pills on time, or even monitoring the insulin levels, as the nano-device will do both and send results to an external database.

Biotech apart, it was a year when Google continued to reorganise itself around Alphabet. When Twitter found itself with it’s back to the wall. When Apple pondered about life beyond Jobs. Microsoft emerged from it’s ashes, and when Amazon grew ever stronger. As we step into 2017, I find it amazing that there are driverless cars now driving about on the roads, in at least one city, albeit still in testing. That we are on the verge of re-engineering the human body and brain. I have been to any number of awesome conferences and the question that always strikes me is, why aren’t we focusing our best brains and keenest technology on the worlds greatest problems. And I’m hopeful that 2017 will see this come to fruition in ways we can’t even imagine yet.

Here are 5 predictions for 2017. (Or around this time next year, more egg on my face!)

  • Apple needs some magic – where will they find it from? They haven’t set the world alight with the watch or the phone in 2016. The new MacBook Pro has some interesting features, but not world beaters yet. There are rumblings about cars, but it feels like Apple’s innovation now comes from software rather than hardware. I’m not expecting a path breaking new product from Apple but I’m expecting them to become stronger on platforms – including HomeKit, HealthKit and to seeing much more of Apple in the workplace.
  • Microsoft has a potential diamond in LinkedIn, if it can get the platform reorganised to drive more value for its, beyond job searches. Multi-layered network management, publishing sophistication, and tighter integration with the digital workplace is an obvious starting point. Microsoft has a spotted history of acquisitions, but there’s real value here, and I’m hoping Microsoft can get this right. Talking about Microsoft, I expect more excitement around Hololens and VR based communication.
  • I definitely expect more from Amazon and for the industry to collectively start recognising Amazon as an Innovation leader and held in the same esteem as Apple and Google. Although, like Apple, Amazon will at some point need stars beyond Bezos and a succession plan.
  • Healthcare, biotechnology, genetics – I expect this broad area of human-technology to get a lot of focus in 2017 and I’m hoping to see a lot more news and breakthroughs in how we engineer ourselves.
  • As a recent convert, I’m probably guilty of a lot of bias when I pump for voice. Recency effect, self referencing, emotional response over rational – yes all of the above. Voice is definitely going to be a big part of the interface mix going forward. In 2017, I see voice becoming much more central to the interface and apps planning. How long before we can bank via Amazon Echo?

Happy 2017!

FT Innovate Conference, Day 2

The Government seems to be thinking the right way. Phrases like ‘strategy is showing/ delivering’ don’t normally roll off the tongues of digital tsars. Also creating a data and API repository which other public sector units can use is quite a forward step. @MTBracken

In general the UK is now emerging as a strong innovation hub. The narrative of 3-5 years ago, which was all about ‘needing to move to Silicon Valley’ has gone away, as local and US investors have stepped up to build businesses here. As would be expected, the UK leads in areas such as FinTech. With a recent track record of successful European start ups, from Spotify, to Skype, to Raspberry Pi, there is also a ripple effect as senior members from successful start ups step out to create their own businesses. There are now some nine clusters of tech across the UK, including Cambridge, Portsmouth and Birmingham, driven by talent, cost of living, and telecoms infrastructure, amongst others. @ashleyhi

At the other end of the scale, GE are positioning Predix as the OS of the industrial internet. And Marco Innunziata, Chief Economist pointed out that allowing windmills in windfarms to ‘talk to each other’, allow wind farms to reduce the costs by a factor of 6. @marcoannunziata.

One of the interesting challenges of the IOT is the blurring of blue-collar and white-collar work. This is another potential disruption and a cultural challenge. In fact Innunziata describes GE as a ‘part industrial’ and ‘part software’ company, with significant presence in the Silicon Valley.

There is still a big question mark around reaching millennials and the next generation of employees/ customers. On the one hand this is a natural order. One way or the other you will be hiring the next generation over the next 5 years. But to consider this the panacea for changing your corporate culture is misleading. How quickly will the 21 year old you hire become a part of the orthodoxy? Will he or she really understand the subsequent generation – somebody who might be 15 today? Creating an open culture in the longer term needs more than hiring a few young people. @jooteoh.

In a fast changing and unpredictable world, the value of simulations rises, and with the computing power and data at our disposal, it is now much more feasible to run simulations for all the situations which may not be easy to replicate in real life (plane evacuation on water, for example), or logistically impossible (a thousand repetitions of the plane evacuating in water with varying conditions). In the language of innovation, simulations is a very useful way of creating fast-fail models without having to repeat all of them in reality. @simudyne

A new and welcome way of thinking about diversity emerged when Belinda Parmar played up (rather than down) gender stereotypes. This goes with my personal belief that we need to celebrate inequality and use it, rather than trying to create a synthetic equality. Men and women are differently wired. People from different continents and cultures think differently. This is why diversity adds value. If we were all the same, then an all male all asian team would be no different from an ethnically diverse, gender balanced one. So the argument about women’s rights – for equal opportunities – starts to diverge from the argument about the need for gender diversity, in some ways. Belinda’s axis of empathisers vs systemisers, and building more empathy in the workplace, was an interesting one and worth thinking about. @belindaparmar.

3D Printing and prototyping is ready for primetime. With the price of 3-d printers falling to £1000-£2000, and the consumables – a roll of low cost filament which allows you print small components at under a £1 running cost, it will be increasingly possible for hardware and product prototyping to become faster, cheaper and more diy, thereby speeding up the pace of innovation. With more companies getting into specific usages around 3D scanning, this will also open up new opportunities for modelling of people, places, and things. It took about a minute for me to get a 3D scan of myself, standing on a rotating base. @3dify @ultimaker

Christie’s is a classic old world business but Steven Murphy’s session was a wonderful illustration of how businesses can evolve quite smoothly into a digital culture without having to rip the guts out of the operations. I also felt they did a great job of making the brand younger and more accessible. The results were clear – art is now democratic, global, collaborative and digital, and Christies is still at the centre of it. @christiesinc

Also fascinating was the Honest By session with Bruno Pieters. It may be a glimpse of the future, but to build a business that does not start with the objective of profit maximisation takes a very specific type of person. If trust is the new currency of the digital age, then Honest By will never fall short of working capital. #brunopieters

The PerfectPitch session was very instructive, not least, in the way crowds think. 3 Startups pitched their business, not just to the on-stage dragons, but to the audience, in a live crowdfunding model. The audience used an app to commit notional sums in real time, for each of the businesses, based on their funding need, business idea, model, and overall story. This may be a London bias, given the high leaning towards media and media studies, but I found it amazing that a room full of innovation people, were more interested in funding a magazine subscription model (Readbug) than a healthcare innovation (Pocket Anatomy). The magazine subscription model – similar to Spotify, where you pay a fixed subscription per month for unlimited access to a number of magazines is one that I personally would all but opt out of immediately. In the world of Flipboard and Zite, and about a zillion others, and trying to build a model around paid content (talk to Newscorp about this one), you would have to work very hard to convince me. On the other hand as the healthcare space opens up, an app that captures the human anatomy and allows doctors to give patients a much more visual and recordable explanation of their problem, one that can be saved for later is such a good idea. Even if the initial idea doesn’t work, there is a lot of room for flipping this business to something that does work. I would be in there in a flash. The third business was Podpoint, who do the charging stations for electric vehicles, once again, a clear growth area if it can be done well. I had to leave before this one finished.

It would be remiss of me not to mention Awabot – the little robots ambling around the rooms, talking to people. Awabots are operated by humans using controls, but provide an eye level screen for conversation. So you can actually see & talk to the other person behind the robot. Interesting idea, though in it’s infancy and a lot will depend on the dexterity of mechanical operations, and hopefully the addition of more AI into the interface. Meanwhile this little French start up is looking to make friends with you. @awabot

Overall, 2 great days spent and lot’s of ideas sparked. Got to sit in a Tesla and meet some likeminded people. I missed a couple of good sessions – half of Alberto Prado’s (Philips) session and Ron Williams (Simplest). Some of the things I didn’t see were mobile payments – spreading like wildfire as we speak, true healthcare service innovation, and perhaps the kind of 10X thinking that Larry Page keeps talking about. Something for the next year perhaps @ftlivedigital?

As always for me it’s not just about what I hear from the speakers, or speak with fellow attendees, it’s the thoughts and sparks it creates in my head that is the real takeaway of the event. After all, innovation can’t stop after the conference is over – the real work starts now!

Thoughts & Lessons – FT Innovate Conf Day 1

The UK is the most digital economy in the G20, measured as contribution of digital industries to GDP, as per Baroness Shields. But it faces a deficit of 750,000 digitally trained people. There are now 18 tech clusters in the UK – including Cambridge and Edinburgh for example.

Yet, according to Marianna Mazzucato, the UK also has below average R&D spends. Gross & Industrial R&D.

I’m sure that Marianna’s book sales spiked during her great talk, since at least 4 people I spoke with bought her book during her talk. I did too!

I heard the phrase “scale up” as distinct from ‘start up’ – to describe companies looking for global scale from a successful start. I think it’s a really useful phrase to keep in mind.

What is the role of the state? To create the conditions under which new businesses can thrive. What’s the balance between nation state thinking and global, post-national mindsets? As always the answer lies in between. You still need national policies to execute in specific areas such as education and infrastructure. (I’m still thinking about this one).

GPs are supposed to be able to give patients their medical data by 2015, according to PWC, and only about 1% are ready yet. I also think that about 1% of patients are actually ready to receive, and take stewardship of their medical data. 

Who owns data? Such as from Nest, or from your smart fridge? Well, you own the raw data as a user, but I would think if the data is used to create specific insights by combining it with other data and/or analysing using somebody else’s models, then the new ‘cooked’ data generated, also known as the insights or the meaning, should be the property of the provider of that insight. It’s a bit like supplying components to a manufacturer.

I learnt about the fascinating world of the slime mould. This is a one celled organism that can concatenate across multiple cells to create a single large cell like structure, with multiple nucleii. It has no brain, but is able to communicate, self organise and optimise. Given a bunch of oats laid out, the slime mould will go after the food, and then build optimal lines between the food points. This has been used to effectively create transport maps for cities.

Retailers such as the newly merged Dixons Carphone are working at a number of levels to combat the threat of Amazon. This includes creating strong digital propositions, but also improving the existing physical store operations, such as linking bonuses of store staff to customer satisfaction, and rewarding stores for digital sales from their catchment area.

To truly create an innovative culture, the leadership has to demonstrate it themselves. This includes being in the frontline, taking risks, demonstrating fast fail, and taking the responsibility for the fail, if and when it happens, as is demonstrated by Nike’s Mark Parker . This sends out the real message to employees – that it’s okay to take risks and fail occasionally. But this need to be backed by celebrating success and even rewarding failure if it’s really a fast fail – where the clear lessons are learnt and new hypotheses are set up.

Can IOT Revive The Connected Homes Opportunity?

In 2011, I authored the Intellect (now TechUK) report on Connected Homes, for the UK. Among the key findings were (1) that while this is a massive opportunity, the inherent cross-industry environment creates a number of challenges, from standards, to service optimisation, to ownership; (2) that the infrastructure in most homes will need to be upgraded – with challenges to networks, physical infrastructure, and home equipment; and finally (3) a more pervasive level of connectivity may be required for essential services such as healthcare and education, so as not to exacerbate the digital divide. 

What did surprise me during the course of that research was the complete absence of any kind of linkage between property prices / value and home technology or connected services. Whether it was real estate brokers, property portals, or architects and developers, there were no real incentive to put in better infrastructure or technology, as there was no perceived value (i.e. reflected in a correspondingly higher price). 

As the population ages, and with a bigger challenge of care for the elderly, I fully expect this link to get established in future, and was happy to see at least one article commenting on the lack of connectivity in high value properties. Arguably, this is just anecdotal, and a one-off, but it’s a start! 

More excitingly, we are seeing a re-emergence of connected services with the rapid evolution of the sensor economy and the Internet of Things. 

At the Mobile World Congress in Barcelona, in February, it was noteworthy that Telcos, especially the Asian ones, were deeply committed to the sensor economy. Having lost out on OTT services in the last spurt of innovation, Telcos seem to have recognised that expecting to get paid because of their structural role in the ecosystem is a bad strategy (notwithstanding the recent Netflix deal). This time around, elcos are participating more wholeheartedly in the service delivery. From smart t-shirts to track your heartbeat to birthing systems for farm animals, and from home-automation to education, a slew of services are now being provided from telcos which put the user at the core and keep the technology under the hood. NTT Docomo reported that they are now making over $10bn per year from non-traditional (Voice/ Text) services.

Cow BirthingIt’s not just telecoms, but a number of other businesses are now eyeing the home for connected services. Insurance companies, utility firms and technology majors such as Google (Nest, TV), Apple (TV) and others have their eye on your home. The Internet of Things has the potential to democratise a lot of these services, so that small, 3rd party companies can build simple and innovative solutions with access to devices and data. 

Personal and home technology will be the next battleground, therefore, and may be the connected home will finally become a reality. 

 

 

Google – Back Door Innovation?

Google bought Nest this week. Interesting on a number of levels. 

Let’s start with Tony Fadell. Fadell, along with Matt rogers co-founded Nest, and both were part of the team that created the iPod. The Nest team has close to a hundred ex-apple employees. According to most analysts, this is an important component of the deal. Google is trying harder to create better hardware. The Nexus hasn’t done well. Nor has it’s Motorola division. Nest brings serious consumer electronics design chops to the table. The question is, will Google be able to use this? 

Fadell, according to articles, had personality clashes with people at Apple. By all accounts great inventors and geniuses aren’t the best of team-workers or organisation-people. Let’s wait to see how it pans out for Google and the Nest team. 

Apart from the creative talent, Google may have it’s eye on the Home. Along with connected cars, where Google has a significant stake, the digital home and digital healthcare are two key battlegrounds. Nest gives Google a route to your living room, where Apple has so far dominated, with the likely exception of your web search tool. 

It’s worth noting that the other news from Google was the prototype of ‘smart’ contact lenses. These lenses will analyse the fluid from your eyes, to monitor for diabetes. This will save the user from having to do multiple blood tests. We know that the era of smart devices is coming and these are just the starting points. 

What I find interesting is that Google exited the healthcare and energy markets a couple of years ago, when they had two very good propositions. A dashboard for managing your energy information and an online service for keeping your healthcare information in one place. Given Google’s strength, and the increasing centrality of data and analytics, I find it interesting that Google would shut down these properties and then re-enter the same markets through a device route. 

Is this because Google has accepted the Apple model that you can only win by controlling the entire hardware-software-data ecosystem? Or is it that the data driven approach was prone to a significant backlash from privacy and governmental controls, especially in Europe? Or is it that consumers like you and me are much more comfortable with innovation that we can see and touch? 

Either way, I expect to see the return of Googles Health and Energy portals, this time backed by physical devices which can woo the consumer better, while distracting the attention from the real value of the information! 

10 Talking Points from Our Innovation & Social Media Panel

Last week I had the pleasure of hosting a panel discussion on Social Innovation, at the Cognizant Community for Women. On the panel with me were Pete Marsden from ASOS, Clara Bermingham from Rentokil and Clare Brown, from Coke. We didn’t plan it this way, but it turned out that each of these 3 businesses use Social technologies in a very different way. For one of them it’s a route to market, and a way to drive a global sales model. For another it’s a service delivery issue and a way to connect colleagues and frontline staff. For the third, it’s a brand engagement model. I’ll leave you to figure out which is which. 

 

Some really interesting themes emerged from the discussion. Here are a few of them: 

 

1.   As highlighted by the introduction, the starting point is to be clear about what your objective is, on social media platforms. The three companies above were all essentially clear on what it meant to them and importantly, what it did not. 

2.   There are vastly different levels of control in Social media from traditional communication channels and this is something organisations need to get used to. However, many organisations are using social media as formal channels. This typically calls for putting the right processes in place for managing communications on social media. As it turns out 140 characters can be very long paragraphs in some languages! 

3.   The structure and staffing of social media platforms is a specific challenge where there are no precedents to follow. New skills may be required, and it may not be as simple as hiring a ‘bunch of millenials’. You may need to collocate communications and development teams so that they can create faster. Hub and spoke networks are advised for localisation challenges, and needless to say, the multilingual nature of the internet is a given requirement. 

4.   One specific problem that you cannot avoid is that the internet is a 24×7 environment and the social sphere. Whether you have customers wanting to speak with you, or consumers talking about you, you have to be listening and responding. The ability to set up and run a 24/7 operation is a key aspect of running a social operation. This may not sound like a big deal, but typically, service teams are set up for 24×7 operations, where as sales and marketing teams are not. So if the social play in your organisation is the domain of sales and marketing, this might be a challenge. 

5.   What about governance, quality and errors? Well there are divergent streams of thought. Of course, you need to have the right level of governance in place, but because of the less formal nature of the medium, it’s all right to make the odd mistake. It actually presents a more human side of the company. Needless to say, this should not be taken to it’s extreme.  

6.   Talking about which, Social platforms offer a way to tap into the sea of external energy, but this does imply a journey to more porous organisational boundaries, where internal and external communications start to merge. This may require a re-learning and a change in the way organisations traditionally communicate. As somebody pointed out, you might state on your personal blog that this is just your opinion, but that may not prevent it influencing perception about your organisation. 

7.   In fact, there is a great opportunity here, to address some of the non-financial objectives that most businesses have. This is a great way to address the obligation that most businesses have, to become a socially valuable organisation, whether it’s by participating in causes that appeal to the organisation or by mobilising effort on a cause that you actually own and drive. 

8.   It’s not easy to make all these changes. All the attendant challenges of change management apply here. But within that there are opportunities social platforms themselves, as an agent of change. One of our panellists was a designated ‘Chatterazzi’ for the company’s change program. Critically, adoption of social platforms is a significant step towards the de-hierarchialisation of the enterprise. It’s a way in which the CEO can engage in active dialogue with employees, or with consumers. These are all agents of change. 

9.   The underlying technology landscape is vastly diverse, and in many organisations, a questionably high number of tech platforms and tools may already be in use. A rationalisation may well provide value. What is perhaps more significant, is that this is leading to a model of ‘loose coupling’ of technology, a different way again, from how traditional enterprise technology is configured. 

10. Finally, of course, all of this makes sense only insofar as the underlying analytics are delivering the metrics which have been agreed upon. Only in this case, the metrics may be less obvious, and in some cases both the metrics and the meaning may be a part of an evolutionary process. Hence, this is not a design once and run forever kind of model, but rather one where even the analytics team needs to stay engaged in the evolving model and contribute to the universe of possibilities, and help uncover unfolding patterns. 

 

I could go on, but I’ll stop at 10, hopefully these will have made sense to you. 

Many thanks to the excellent panel for helping illuminate this challenging topic, and looking forward to more conversations, and new thinking.