Innovation Science

Festivus 2.0

Massive traffic to iTunes from new iPod owners and gift card recipients swamped the iTunes servers on Christmas day, causing crashes, slow downloads, problems with purchases, and general griping. iTunes apparently received over 400% more traffic than last Christmas, and Apple was caught unprepared. Similar chaos happened with the music service Rhapsody, with users complaining of an unwelcome Christmas present when songs wouldn’t stream and faulty DRM permissions prevented users from listening to their rightfully licensed music. Meanwhile, just two days after Christmas, an earthquake knocked out nearly all internet access to Asia. The thought of a continent cut off from the internet is mind-boggling—a natural experiment indeed!

These hiccups demonstrate one difficulty with the new movement towards online services replacing traditional modes of activity. Online data applications are great until you find yourself without an internet connection or a software service that upgraded to a version that doesn’t work as well. Once Google acquired Writely and changed it to Google Documents, I’ve found collaborators have more trouble figuring out how to login to work on a document. That part should be easy. Servers going down, slow connections, upgrades to Internet Explorer or Firefox that suddenly make your Web 2.0 application go buggy are all reasons that the typical consumer is going to reject these alternatives to current approaches to services.

Still, the expectation is that people’s reliance on internet connectivity is going to increase exponentially in the near future. The Los Angeles Times asked several technologists what trends they saw taking shape in 2007, and their answers were surprisingly consistent. Steve Ballmer sees great things in online TV and digital rights management, and is optimistic about how communications technology will improve through convergence:

2007 will be the year that unified communications technology helped us regain control of our information and our lives.

Ned Sherman says that virtual worlds, such as Second Life and Warcraft, will grow to a prominent place in our lives. Rafat Ali predicts that online personalities will take hold of our attention. Kevin Webach predicts P2P television will take off. Chris Anderson sees online gaming enabling online video on televisions. Hank Barry sees “virtualization technologies” allowing people to become computer agnostic and transfer their data and applications with ease from one machine to another. John Brockman sees WiFi as an enabler to “continuous computing” where your data and and apps can follow you wherever you go.

All of these predictions, perhaps, overestimate the eagerness of the average person to embrace new technology, learn new procedures, and generally change the way that they live their lives. Look at how long online retail really took to become a major force. Look at how Tivo is still struggling to survive.

New approaches are enthusiastically embraced by younger generations. MySpace is dominated by teenagers and twenty-somethings. There is a strong age divide, however. I am continually amazed whenever I talk to someone who is middle-aged and realize that they have no idea what YouTube is. Next time you’re talking to someone over the age of 30, ask them what online music sources they listen to, and if they prefer streaming radio or podcasts. Predictions such as those made in the LA Times need to tempered by these generational gaps in consumer acceptance or risk being perceived as being simply the wet dreams of executive technologists.

Technology will change, but it will take time for the typical consumer to accept these changes. Changes are going to have to be easy to adapt to and there must be a strong reason to motivate people to change. I sound like a luddite here even though I am thoroughly absorbed by such technologies. While driving home from work at the end of the year, I heard a music critic on NPR state that CD sales were down 5% in 2006 and then he went on to list his top 10 albums of the year. Soon after arriving home, I was listening to one of the critic's picks—My Chemical Romance—through the online music service Rhapsody and was wondering at the vast number of people who still buy CDs and keep CD sales from plummeting at an even faster rate.

Attention and Cognition: The Coming Wave

Eleven months ago I started paying serious attention to attention by reading the classic book Attention and Effort by former Berkeley professor and Nobel Laureate Daniel Kahneman.

I now feel like my interest in attention has converged at many levels:

1. I'm involved in two different research projects on attention.
2. I've started worrying about the overload of information in our daily lives, as discussed by A VC in NYC on attention overload and by Om Malik on internet anxiety disorder, and have started using tools described in Lifehacker to try to keep order.
3. Recently, I've also started focusing on how attention relates to presentations/talks, and how Powerpoint slides can be optimized by using basic attention principles derived from the cognitive research of Richard Mayer. A nice summary of his research is posted on this Visual Design for eLearning blog and the research is the basis for the Beyond Bullets blog. I find particularly interesting a Zen take on this issue described extensively at Presentation Zen such as this brilliant comparison of presentations by Steve Jobs and Bill Gates.

These convergences will be just the tip of the iceberg. I believe that cognitive science issues such as attention are going to have an even bigger impact on the average person in the future. New innovations are going to be driven by the integration of cognitive research into technology design. Traditional cognitive techniques of reaction times or dual-attention tasks have been applied in the past, and recently they have been used to investigate the effect of cell phone talking on attention while driving. But they are going to receive new applications in product development and more sophisticated techniques will be used. Current leading edge cognitive research incorporates electrophysiological measures of brain activity, such as fMRI or evoked potentials, that can be more sensitive to detecting correlations with perceptual stimuli and behavior than strict behavioral measures.

Whichever companies are the first to seriously integrate measures of cognitive behavior into their product design and marketing are going to obtain a huge lead over their competitors. Apple and IDEO without a doubt have cognitive scientists on staff. Google and Yahoo!, maybe. HP, Tivo and Electronic Arts, doubtful. Dolby and Lucas Film, no way. (Just to name a few companies around the Bay). All of these companies, however, can benefit from these techniques to improve their products and better understand their customer. The question isn't if cognitive techniques will become key R&D tools for consumer technology companies, it's when.

How I'm trying to incorporate cognition into the hearing aid industry is partly detailed in this interview I gave.

Innovation and Competitive Strategies

The following quotation cited by Chunka Mui got me thinking:

as Drucker reminds us "defending yesterday—that is, not innovating—is far more risky than making tomorrow."

A strategy that I’ve seen to differentiate one's own product from the competitor's is to point out to the customer the flaws in the competitor's product and to outline ways in which the competitor’s product quality isn’t as good as one’s own (e.g., Creative: "Our MP3 player has superior sound quality.") . This approach avoids innovation as a competitive strategy and instead focuses on differences in product quality and effectiveness to claim superiority and attract customers.

I believe that in many cases this is a flawed approach. Most customers that already use Company X’s product (whether personal or enterprise technology) aren't going to be convinced to give up their chosen brand based on these arguments. Taking jabs at the competition’s quality or usefulness of features works best with your own customers, convincing them that they made the right choice and shouldn’t switch brands. It’s kind of like political or religious arguments—they rarely work to convert someone and are only useful in reinforcing people who are already supporters of you and your cause.

Freddie Daniells interesting thoughts on innovation and competitive advantage allude to this concept:

Quality is now a given and any cost advantage gained by efficiencies brings only short-lived advantage.

In my view, to gain market share from your competitors you need to provide benefits that the competition doesn’t offer. This is where innovation comes in. A company has to compete on either low price or novel technology (or these days, creative design). To compete on technology, it’s not good enough to follow the innovation leaders and then claim that you’ve implemented their innovations better. Doing so may keep your own current customers from jumping ship but will not help to acquire new customers from your competition. Daniells cites a Harvard expert on competitive strategy whose ideas are consistent with this view.

Tom Peters says “Innovate or Die”, and I’m a believer.