Tag Archives: Innovation

Emerging Science and Technologies, why so many promises? (Part 1)

Sciences et technologies émergentes, pourquoi tant de promesses? (Emerging Science and Technologies, why so many promises?) is the title of a book (in French only) from a group of authors under the direction of Marc Audétat, a political scientist and researcher at the Sciences -Society Interface of the University of Lausanne. This is not an easy reading book, it is quite demanding, but it raises important questions.

I have already reported on this blog about books that speak of a certain crisis of science, for example in The Crisis and the American model (in French), about the books “La Science à bout de Souffle” or “The University bubble. Should we pursue the American dream?” or in The Trouble With…, a book by Lee Smolin, not to mention the most violent criticism of the promises of technology by Peter Thiel in Technology = Salvation.

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This new book explores the promises related to science and technology to the point of talking about an economy of promises. This is a collective work which does not make it an easy reading, but the diversity of points of views is certainly an asset. I have not finished reading it and I will certainly come back to it. In the first chapter, P.-B. Joly describes the system of techno-scientific promises. He begins by introducing the concepts of Imaginary and Vision [Page 33] This “couple of concepts takes into account how various sources of inspiration are involved in the technical creation. […] The Imaginary gives an almost tangible appearance to concepts and ideals that are a priori devoid of it … [and becomes] a common sense that founds the action into society. […] The concept of Vision is close to that of Imaginary, but on a smaller scale. It is akin to that of “rational myth” used to analyze the dynamics of collective action in changing contexts. […] Coalitions of actors form around these visions of a prospective order and contribute to their dynamics. […] If we accept this conceptual distinction between Imaginaries (at large scales – the Nation – and in the long term) and Visions (at a level of coalitions of actors and active over periods of medium length) then comes the question of the interaction between the two.”

“Unlike Visions and Imaginaries, for which the content of technical arrangements is essential, what is essential for the techno-scientific promises is the creation of a relation, as well as a time horizon of expectations. […] Promises are essential in technology creation, because they enable innovators to legitimize their projects, to mobilize resources and to stabilize their environment. […] Any techno-scientific promise must convince a large audience that it determines a better future than the alternatives, even if the realization of the promise requires major, sometimes painful changes.” (The author mentions the history of electricity or the green revolution as the solution to world hunger)

“Our concept of techno-scientific promises has been systematized and became in the last forty years the governance of the new techno-sciences (biotechnology and genomics, nanotechnology, neuroscience, synthetic biology, geo -engineering, etc.) The construction of a techno-scientific promise meets two conflicting constraints: the constraint Radical Novelty and that of Credibility. […] (And I interpret that) for this request to be credible, one must disqualify alternatives. [Furthermore] For a scientific theory to be credible, its validity is neither necessary nor sufficient. […] The techno-scientific promises must have the support of a circle of specialists. Otherwise, they cannot resist the opposition manifested either in scientific arenas, or in public arenas. An extreme version is observed when the specialists refer to natural laws to justify the inevitability of technological change. (Examples are Moore’s Law and Gabor’s Law.) Thus, in principle, generic promises are not subject to validity tests.”

Finally, this intensification is reinforced by three complementary elements [page 39]:
– the future is more a threat than a source of hope;
– research and innovation are often presented as the only way to solve problems;
– the research stakeholders should demonstrate their societal impacts.

This leads to pathologies [pages 40-43]:
– the myth of a public victim of irrational fears and to be educated becomes an intangible scheme;
– the promises turn into bubbles;
– the radical novelty and uncertainty create conflicting discourses, sources of mistrust because the effects of such radicalism is not predictable so that through experimentation, the technologists become sorcerer’s apprentices and society, a laboratory;
– finally promises lead to endless discussions on fictions, on issues that may have nothing to do with the reality of research.

In conclusion Joly thinks this promises system is one of the enemies of the future because of the clear separation it creates between those who make the promise and those who are supposed to accept it. The recognition of this regime and therefore these problems is a prerequisite imperative.

After reading the first chapter, I remembered the societal concerns of Cynthia Fleury, about whom I have already said a few things in a digression in the article On France Culture, Transhumanism is Science Fiction. Our democratic societies are in crisis, and the distrust of politics as well as of experts has never been stronger. The issue of research and innovation is a component of this crisis. I am eager to discover the rest of this very interesting (and important) work …

Ten Ideas to Innovate in Uncertain Times

Following my post yesterday about Invention, Entrepreneurship and Innovation, here is a short presentation I made yesterday about the culture of innovation. I had already mentioned it in a previous post (without the slides) entitled Can the next google come from Europe? An answer by Fathi Derder. Derder, a Swiss politician, has written a book explaining what Switzerland needs to change in the general framework conditions. It is an important book. When I talk to students and young entrepreneurs, I focus more on the importance of culture. Which is what you can read in the slide below. Enjoy!

Invention, Entrepreneurship and Innovation

“Anything that won’t sell, I don’t want to invent.” – Thomas Edison

This article arouse from a discussion with colleagues about what innovation really is. I have to admit the conversation helped me in clarifying and correcting a few misconceptions I had. So let me try to explain how the three concepts of Invention, Entrepreneurship and Innovation differ and how they are related. At least these are my views.

Invention - Entrepreneurship - Innovation

So let me begin with definitions:

Invention: something new, that did not exist previously and that is recognized as the product of some unique intuition or genius. A product of the imagination. Something that has never been made before. “Something new under the sun”. A discovery pre-exists the discoverer, by opposition to the inventor and her/his invention.

Innovation: the successful implementation and adoption by society of something new. So an innovation is the succesful commercialization or use (if non-profit) of an invention.

Entrepreneurship: it is the process of designing a new business (wikipedia). The entrepreneur perceives a (new) business opportunity and gathers the resources to implement it, ideally successfully. When the entrepreneur succeeds in implementing something new, (s)he is an innovator. But (s)he does not need to be an innovator, (s)he can also be an imitator.

So this makes a clear difference between an invention and an innovation. There is always an invention before an innovation, but an innovator does not have to be an inventor. It also shows that an entrepreneur does not have to invent, neither to innovate.

My biggest mistake was to say “big companies do not innovate anymore”. I was wrong, Though most established companies imitate, many do innovate. They rarely invent and not many are entrepreneurial. But in order to innovate, it is better to be established. Let me clarify.

Let me come back to my favorite topic: “A start-up is an organization formed to search for a repeatable and scalable business model.” This is the best definition I have found so far and it comes from Steve Blank. This beautifully explains that all companies are not start-ups (for example when they have a clear business model from day one and/or if they do not try to scale). It also explains when a company is not a start-up anymore. Then it can innovate.

Another misconception is to confuse Research and Development (R&D) with innovation. Research deals with inventing or discovering. Development follows. Innovation comes afterwards. Patenting belong more to the invention side than to the innovation side of the equation. All this explains also why I have so many doubts about innovation metrics. They measure inputs (such as inventions or R&D) more than what innovation really is, an output.

Invention - Innovation

So how are these three concepts related? Read again, Edison’s quote above. In the past, large innovative firms such as IBM or Bell Labs were inventing. They had big R&D labs. Xerox was famous for its inventive capability and low innovation output. So Apple “stole” many of its inventions and innovated instead. Today, many established companies go to universities to find inventions they license. Or they collaborate with partners (i.e. “open innovation”). However, the risk and uncertainty linked to inventing as well as finding a market for new things makes innovation difficult without entrepreneurship…

Entrepreneurship - Innovation

Entrepreneurship is a great way to enable innovation. Entrepreneurs see an opportunity and accept the uncertainty and risk taking. When it is done in-house. It is called intrapreneurship. Nespresso is one example (even if Nestle did not initially encourage its intrapreneur – who by the way was also the inventor). (Indeed because of the definition given above) corporations stop being start-ups when they innovate! Indeed they are often acquired (M&A) by big, established companies who know better how to commercialize – innovate.

Invention - Entrepreneurship

I had to add the intersection between invention and entrepreneurship. But does this make sense? I am not sure. There is however one industry which has combined both without a real need for innovation: the biotechnology industry is mostly an entrepreneurial activity which develops invention thanks to clinical trials. Biotechnology firms seldom innovate (Genentech and Amgen were exceptions – with a few other firms which managed to commercialize their molecules) because they are often acquired by large pharmaceutical firms or at best license their products to the bigger players. In fact many start-ups are in the same situation. But the truth is companies very seldom invent. Inventions occur before firms are established, at least in the high-tech field.

The following extract from Science Lessons: What the Business of Biotech Taught Me About Management, by Gorden Binder, former CEO of Amgen is interesting:
Biotech Model

Inventors, Entrepreneurs and Innovators

Inventor - Entrepreneur - Innovator

For the same reasons as explained above, individuals have seldom the three attributes. At Apple, Wozniak was an inventor. Jobs was an entrepreneur and an innovator. But Bill Gates or Larry Page and Sergey Brin, the Google founders, were rare cases of inventors, entrepreneurs and innovators combined. However Brin and Page invented at Stanford and then created Google to implement succesfully their invention.

So let me finish with a great definition of innovation given in How Google Works [page 206]: “To us, innovation entails both the production and implementation of novel and useful ideas. Since “novel” is often just a fancy synonym for “new”, we should also clarify that for something to be innovative, it needs to offer new functionality, but it also has to be surprising. If your customers are asking for it, you aren’t being innovative when you give them what they want; you are just being responsive. That’s a good thing, but it’s not innovative. Finally “useful” is a rather underwhelming adjective to describe that innovation hottie, so let’s add an adverb and make it radically useful, Voilà: For something to be innovative, it needs to be new, surprising, and radically useful.” […] “But Google also releases over five hundred improvements to its search every year. Is that innovative? Or incremental? They are new and surprising, for sure, but while each one of them, by itself is useful, it may be a stretch to call it radically useful. Put them all together, though, and they are. […] This more inclusive definition – innovation isn’t just about the really new, really big things – matters because it affords everyone the opportunity to innovate, rather than keeping it to the exclusive realm of these few people in that off-campus building [Google[x]] whose job is to innovate.”

Innovation is complex. Do I need to remind you of the challenges that Clayton Christensen – The Innovator’s Dilemma – Geoffrey Moore – Crossing the Chasm – or Steve Blank – The Four Steps to the Epiphany – have brilliantly described to explain why innovation remains somewhat magical…

Innovation Challenges

PS: can you be an entrepreneur without inventing and innovating? Sure! Not just small companies and craftmen who use their know-how for a decent living. You just need to imitate. Telecom operators such as Vodafone or Bouygues Telecom compete without a need to invent or innovate. They copy other telecom operators. (OK sometimes, they innovate, too). In the start-up world, the Samwer brothers have been famous for copy/paste American success stories and adapt them to the European market. You can find many references about this online and the clones they created include Alando (eBay), Zalando (Zappos, EasyTaxi (Uber), Pinspire (Pinterest), StudiVZ (Facebook), CityDeal (acquired by Groupon), Plinga (Zynga), and Wimdu (Airbnb). See also When Samwer was not Samwer yet but was writing a book – way before Rocket Internet and its clones.

Marcel Salathé’s Creating a European Culture of Innovation

Regularly but not often enough I read about people calling Europe to wake up and react. Recently it was Nicolas Colin’s What makes an entrepreneurial ecosystem. But now I also remember Risto Siilasmaa’s Entrepreneurship should be cherished” and I had my own Europe, Wake Up!. The latest of these is Marcel Salathé’s Creating a European Culture of Innovation. Another must read. Thanks Marcel! So let me just quote him.

Salathe-Blog

At stake is the future of Europe. And we, the innovators, entrepreneurs, scientists, activists, and artists, need to step up and take ownership of this future. Because if we don’t, Europe will continue its downward trajectory that it’s currently on, and become what it many places it already has transformed into – a museum of history.
[…]
The information and communication technology sector is now the dominant economic driver of growth. Think Apple, Google, Facebook, Amazon, Uber. Noticed something? Not a single European company. Only 1 out of 4 dollars in this sector are made by European companies, and all the indicators for the future are pointing down. Some numbers are even more dire: when you list the top 20 global leaders of internet companies that are public, you know how many are European? Zero. And among all publicly listed companies in the digital economy, 83% are American, and a mere 2% are European. 2%!
[…]
So where’s the problem? Some say it’s VC funding, which is only partially true. Yes, the culture of VC funding is probably less mature in Europe than it is in the US, especially for stage A, B and C funding. But money will find its way into good ideas and market opportunities one way or another. Others say it’s simply the European market, and European regulation. I think that is an illusion. Look at AirBnB, the US startup that now has a valuation of over 25 Billion dollars. It was started as a three person startup in California’s Y Combinator, but it now gets over half(!) of its revenues from within Europe. And by the way, San Francisco is probably one of the worst regulatory environments you can find yourself in. AirBnB is currently facing huge battles in San Francisco, and a Californian judge recently ruled Uber drivers employees, causing a minor earthquake in the booming sharing economy. Indeed, California is probably one of the most regulated of the American States, and yet it does exceedingly well.
I think that the problem is actually quite simple. But it’s harder to fix. It’s simply us. We, the people. We, the entrepreneurs. We, the consumers. I have lived in the San Francisco Bay area for more than three years. What’s remarkable about the area is not its laws, or its regulations, or its market, or its infrastructure. What’s truly remarkable is that almost everyone is building a company in one way or another. Almost everyone wants to be an entrepreneur, or supports them. Almost everyone is busy building the future. Indeed, you can almost physically feel that the environment demands it from you. When someone asks you about what it is you are doing professionally, and you don’t respond by saying that you’re building a company, they look at you funny, as if to say, “then what the hell are you doing here”?

[…]
It’s not a trivial point I think. The other day, I was in Turin in Italy, and I desperately needed a coffee. I walked into the next random coffeeshop, where I was served a heavenly cappuccino, with a chocolate croissant that still makes my mouth wet when I just think about it. Was I just lucky? No – all the coffee shops there are that good. Because the environment demands it. Sure, you can open a low-quality coffee shop in Turin if you want to, but you’ll probably have to file for bankruptcy before you have the time to say buongiorno. The environment will simply not accept bad quality. In another domain, I had the same personal experience when I was a postdoc at Stanford. Looking back, all of my best and most cited papers I wrote there. I don’t think it’s coincidence. Every morning, as I was walking across campus to my office, I could sense the environment demanding that I do the most innovative work – if I didn’t, then what the hell was I doing there?
So this is my message to you. I’m asking you to create those environments, both by doing the best and most innovative you can, but also by demanding the same from everyone else around you. These two things go together; they create a virtuous circle.

[…]
Don’t ask for permission, ask for forgiveness if necessary. If you are waiting for permission, you will wait for the rest of your life. Most rules exist for a simple reason: to protect incumbents. Don’t ask for permission, just go and do it.
[…]
Orson Welles was best at describing why asking for permission is deadly…

[…]
So please, let us all live in the future and build what’s missing – here in Europe. I am worried sick that the easiest way for me to live in the future is to buy a ticket to San Francisco. Just like the easiest way for Americans to relive the past is to buy a ticket to Europe, rich in history. I’m asking you to become even more ambitious, more daring, and more demanding, both of yourself, but most importantly also of your environment.

Salathe talks also about role models. His was the founder of Day Interactive, a Swiss start-up which went public in 2000 before being acquired by Adobe for $250M in 2010. So coming next… its cap. table..

DayInteractiveIPO

Walter Isaacson’s The Innovators (part 4) – Steal… or Share?

How many times will I say how great a book is Walter Isaacson’s The Innovators – How a Group of Hackers, Geniuses, and Geeks Created the Digital Revolution ? And how many posts will I write about it ? Now this this the 4th part ! Isaacson shows how collaboration in software contributed to a unique value creation. This may mean sharing but also stealing !

Gates complained to the members of the Homebrew Computer Club about this: “Two surprising things are apparent, however, 1) Most of these “users” never bought BASIC (less than 10% of all Altair owners have bought BASIC), and 2) The amount of royalties we have received from sales to hobbyists makes the time spent on Altair BASIC worth less than $2 an hour. Why is this? As the majority of hobbyists must be aware, most of you steal your software. Hardware must be paid for, but software is something to share. Who cares if the people who worked on it get paid? Is this fair? One thing you don’t do by stealing software is get back at MITS for some problem you may have had. MITS doesn’t make money selling software. […] The thing you do is theft. I would appreciate anyone who wants to pay.” [Page 342 and http://www.digibarn.com/collections/newsletters/homebrew/V2_01/gatesletter.html]

homebrew_V2_01_p2

But Isaacson nuances : “Still there was a certain audacity to the letter. Gates was, after all, a serial stealer of computer time, and he had manipulated passwords to hack into accounts from eighth grade through his sophomore year at Harvard. Indeed, when he claimed in his letter that he and Allen had used more than $40,000 worth of computer time to make BASIC, he omitted the fact he had never actually paid for that time. […] Also, though Gates did not appreciate it at the time, the widespread pirating of Microsoft BASIC helped his fledgling company in the long run. By spending so fast, Microsoft BASIC became a standard, and other computer makers had to license it.” [Page 343]

And what about Jobs and Wozniak? Everyone knows about how phone phreaks had created a device that emitted just the right tone chirps to fool the Bell System and cadge free long-distance calls. […] “I have never designed a circuit I was prouder of. I still think it was incredible”. They tested it by calling the Vatican, with Wozniak pretending to be Henry Kissinger needing to speak to the pope, it took a while but the officials at the Vatican finally realized it was a prank before they woke up the pontiff. [Page 346]

Gates, Jobs and the GUI

And the greatest robbery may have been the GUI – Graphical User Interface. But who stole? Later when he was challenged about pilfering Xerox’s ideas, Jobs quoted Picasso: “Good artists copy, great artists steal. And we have been always shameless about stealing great ideas. They were copier-heads who had no clue about what a computer could do.” [Page 365]

However when Microsoft copied Apple for Windows, it was a different story… “In the early 1980s, before the introduction of the Macintosh, Microsoft had a good relationship with Apple. In fact on the day that IBM launched its PC in August 1981, Gates was visiting Jobs at Apple, which was a regular occurrence since Microsoft was making most of its revenue writing software for the Apple II. Gates was still the supplicant in the relationship. In 1981, Apple had $334 million in revenue, compared to Microsoft’s $15 million. […] Jobs had one major worry about Microsoft: he didn’t want it to copy the graphical user interface. […] His fear that Gates would steal the idea was somewhat ironic, since Jobs himself had filched the concept from Xerox.” [Pages 366-67]

Things would go worse… “Well, Steve, I think there’s more than one way of looking at it. I think it’s more like we both had this rich neighbor named Xerox and I broke into his house to steal the TV set and I found out that you had already stolen it”. [Page 368]

Stallman, Torvalds, free- and open-source

There would be other oppositions. The hacker corps that grew up around GNU [Stallman’s free software] and Linux [Torvalds’ open software] showed that emotional incentives, beyond financial rewards, can motivate voluntary collaboration. “Money is not the greatest of motivations,” Torvalds said. “Folks do their best work when they are driven by passion. When they are having fun. This is as true for playwrights and sculptors and entrepreneurs as it is for software engineers.” There is also, intended or not, some self-interest involved. “Hackers are also motivated, in large part, by the esteem they can gain in the eyes of their peers, improve their reputation, elevate their social status. Open source development gives programmers the chance.” Gates “Letter to Hobbysts”, complaining about the unauthorized sharing of Microsoft BASIC, asked in a chiding way, “who can afford to do professional work for nothing?”. Torvalds found that an odd outlook. He and Gates were from two very different cultures, the communist-tinged radical academia of Helsinki versus the corporate elite of Seattle. Gates may have ended up with the bigger house, but Torvalds reaped anti-establishment adulation. “Journalists seemed to love the fact that, while Gates lived a high-tech lakeside mansion, I was tripping over my daughter’s playthings in a three-bedroom ranch house with bad plumbing in boring Santa Clara,” he said with ironic self-awareness. “And that I drove a boring Pontiac. And answered my own phone. Who wouldn’t love me?” [Pages 378-79]

Which does not make open a friend of free. The disputes went beyond mere substance and became, in some ways, ideological. Stallman was possessed by a moral clarity and unyielding aura, and he lamented that “anyone encouraging idealism today faces a great obstacle: the prevailing ideology encourages people to dismiss idealism as ‘impractical'”. Torvalds, on the contrary, was unabashedly practical, like an engineer. “I led the pragmatists,” he said. “I have always thought that idealistic people are interesting, but kind of boring and scary.” “Torvalds admitted to “not exactly being a huge fan” of Stallman, explaining, “I don’t like single-issue people, nor do I think that people who turn the world into black and white are very nice or ultimately very useful. The fact is, there aren’t just two sides to any issue, there’s almost always a range of responses, and ‘it depends’ is almost always the right answer to any big question. He also believed it should be permissible to make money from open-source software. “Open-source is about letting everybody play. Why should business, which fuels so much of society’s technological advancement, be excluded?”. Software may want to be free, but the people who write it may want to feed their kids and reward their investors. [Page 380]

The Innovators by Walter Isaacson – part 3: (Silicon) Valley

Innovation is about business models – the Atari case

Innovation in (Silicon) Valley: after the chip, innovation saw the arrival of games, software and the Internet “As they were working on the first Computer Space consoles, Bushnell heard that he had competition. A Stanford grad named Bill Pitts and his buddy Hugh Tuck from California polytechnic had become addicted to Spacewar, and they decided to use a PDP-11 minicomputer to turn it into an arcade game. […] Bushnell was contemptuous of their plan to spend $20,000 on equipment, including a PDP-11 that would be in another room and connected by yards of cable to the console, and then charge ten cents a game. “I was surprised at how clueless they were about the business model,” he said. “Surprised and relieved. As soon as I saw what they were doing, I knew they’d be no competition”.
Galaxy Game by Pitts and Tuck debuted at Stanford’s Tresidder student union coffeehouse in the fall of 1971. Students gathered around each night like cultists in front of a shrine. But no matter how many lined up their coins to play, there was no way the machine could pay for itself, and the venture eventually folded. “Hugh and I were both engineers and we didn’t pay attention to business issues at all,” conceded Pitts. Innovation can be sparked by engineering talent, but it must be combined with business skills to set the world afire.
Bushnell was able to produce his game, Computer Space, for only $1,000. It made its debut a few weeks after Galaxy Game at the Dutch Goose bar in Menlo Park near Palo Alto and went on to sell a respectful 1,500 unites. Bushnell was the consummate entrepreneur: inventive, good at engineering, and savvy about business and consumer demand. He was also a great salesman. […] When he arrived back at Atari’s little rented office in Santa Clara, he described the game to Alcorn [Atari’s co-founder], sketched out some circuits, and asked him to build the arcade version of it. He told Acorn he had signed a contract with GE to make the game, which was untrue. Like many entrepreneurs, Bushnell had no shame about distorting reality in order to motivate people.”
[Pages 209-211]

“Innovation requires having three things: a great idea, the engineering talent to execute it, and the business savvy (plus deal-making moxie) to turn it into a successful product. Nolan Bushnell scored a trifecta when he was twenty-nine, which is why he, rather than Bill Pitts, Hugh Truck, Bill Nutting, or Ralph Baer, goes down in history as the innovator who launched the video game industry.” [page 215]

You may also so listen to Bushnell directly. This is Something Ventured and the Atari story begins at 30’07” until 36’35” (you may go on Youtube directly for the right timing).

The debate about intelligence of machines

Chapter 7 is about the beginnings of the Internet. Isaacson adddresses a topic which has come back has a hot debate these days: will machines and the computer in particular replace humans, with or despite their intelligence, creativity and innovation capabilities? I feel close to Isaacson whom I quote from page 226: “Licklider sided with Norbert Wiener, whose theory of cybernetics was based on humans and machines working closely together, rather than with their MIT colleagues Marvin Minsky and John mcCarthy, whose quest for artificial intelligence involved creating machines that could learn on their own and replace human cognition. As Licklider explained, the sensible goal was to create an environment in which humans and machines “cooperate in making decisions.” In other words,they would augment each other. “Men will set the goals, formulate the hypotheses, determine the criteria, and perform the evaluations. Computing machines will do the routinizable work that must be done to prepare the way for insights and decisions in technical and scientific thinking.”

The Innovator’s dilemma

In the same chapter which tries to describe who were the inventors (more than the innovators) in the case of the Internet – J.C.R. Licklider, Bob Taylor, Larry Roberts, Paul Baran, Donald Davies, or even Leonard Kleinrock – and why it was invented – an unclear motivation between the military objective of protecting communications in case of a nuclear attack or the civilian one of helping researchers in sharing resources – Isaacson shows once again the challenge of convincing established players.

Baran then collided with one of the realities of innovation, which was that entrenched bureaucracies are resistant to change. […] He tried to convince AT&T to supplement its circuit-switched voice network with a packet-switched data network. “they fought it tooth and nail,” he recalled. “They tried all sorts of things to stop it.” [AT&T would go as far as organizing a series of seminars that would involve 94 speakers] “Now do you see why packet switching wouldn’t work?” Baran simply replied, “No”. Once again, AT&T was stymied by the innovator’s dilemma. It balked at considering a whole new type of data network because it was so invested in traditional circuits. [Pages 240-41]

[Davies] came up with a good old English word for them: packets. In trying to convince the general Post office to adopt the system, Davies ran into the same problem that Baran had knocking at the door of AT&T. But they both found a fan in Washington. Larry Roberts not only embraced their ideas; he also adopted the word packet.

The entrepreneur is a rebel (who loves power)

One hard-core hacker, Steve Dompier, told of going down to Alburquerque in person to pry loose a machine from MITS, which was having trouble fulfilling orders. By the time of the third Homebrew meeting in April 1975, he had made an amusing discovery. He had written a program to sort numbers, and while he was running it, he was listening to a weather broadcast on a low-frequency transistor radio. “The radio started going zip-zzziiip-ZZZIIIPP at different pitches », and Dompier said to himself, “Well, what do you know ! My first peripheral device!” So he experimented. “I tried some other programs to see what they sounded like, and after about eight hours of messing around, I had a program that could produce musical tones and actually make music”. [Page 310]

“Dompier published his musical program in the next issue of the People’s Computer Company, which led to a historically noteworthy response from a mystified reader. “Steven Dompier has an article about the musical program that he wrote for the Altair in the People’s Computer Company,” Bill Gates, a Harvard student on leave writing software for MITS in Albuquerque, wrote in the Altair newsletter. “The article gives a listing of his program and the musical data for ‘The Fool on the Hill’ and ‘Daisy.’ He doesn’t explain why it works and I don’t see why. Does anyone know?” the simple answer was that the computer , as it ran the programs, produced frequency interference that could be controlled by the timing loops and picked up as tone pulses by an AM radio.
By the time his query was published, Gates had been thrown into a more fundamental dispute with the Homebrew Computer Club. It became archetypal of the clash between the commercial ethic that believed in keeping information proprietary, represented by Gates [and Jobs], and the hacker ethic of sharing information freely, represented by the Homebrew crowd [and Wozniak].” [Page 311]

Isaacson, through his description of Gates and Jobs, explains what is an entrepreneur.

“Yes, Mom, I’m thinking,” he replied. “Have you ever tried thinking?” [P.314] Gates was a serial obsessor. […] he had a confrontational style [… and he] would escalate the insult to be “the stupidest thing I’ve ever heard.” [P.317] Gates pulled a power play that would define his future relationship with Allen. As Gates describes it, “That’s when I say ‘Okay, but I’m going to be in charge. And I’ll get used to being in charge, and it’ll be hard to deal with me from now on unless I’m in charge. If you put me in charge, I’m in charge of this and anything else we do.’ ” [P.323] Like many innovators, Gates was rebellious just for the hell of it. [P.331] “An innovator is probably a fanatic, somebody who loves what they do, works day and night, may ignore normal things to some degree and therefore be viewed as a bit imbalanced. […] Gates was also a rebel with little respect for authority, another trait of innovators. [P.338]

Allen assumed that his partnership with Gates would be fifty-fifty. […] but Gates had insisted on being in charge. “It’s not right for you to get half. […] I think it should be sixty-forty.” […] Worse yet, Gates insisted on revisiting the split two years later. “I deserve more than 60 percent.” His new demand was that the split be 64-36. Born with a risk-taking gene, Gates would cut loose late at night by driving at terrifying speeds up the mountain roads. “I decided it was his way of letting off steam.” Allen said. [P.339]

gates-arrested
Gates arrested for speeding, 1977. [P.312]

“There is something indefinable in an entrepreneur, and I saw that in Steve,“ Bushnell recalled. “He was interested not just in engineering, but also in the business aspects. I taught him that if you act like you can do something, then it will work. I told him, pretend to be completely in control and people will assume that you are.” [P.348]

The concept of the entrepreneur as a rebel is not new. In 2004, Pitch Johnson, one of the earliest VC in Silicon Valley claimed “Entrepreneurs are the revolutionaries of our time.” Freeman Dyson has written “The Scientist as a Rebel“. And you should read Nicolas Colin’s analysis of entrepreneurial ecosystems: Capital + know-how + rebellion = entrepreneurial economy. Yes rebels who loves power…

The Innovators by Walter Isaacson – part 2 : Silicon (Valley)

What I am reading now following my recent post The Complexity and Beauty of Innovation according to Walter Isaacson is probably much better known: Innovation in Silicon Valley at the time of Silicon – Fairchild, Intel and the other Fairchildren. I have my own archive, nice posters from those days, one about the start-up / entrepreneur genealogy, with a zoom on Fairchild and one on Intel and one about the investor genealogy

Entrepreneurs…

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“There were internal problems in Palo Alto. Engineers began defecting, thus seeding the valley with what became known as Fairchildren: companies that sprouted from spores emanating from Fairchild.” [Page 184] “The valley’s main artery, a bustling highway named El Camino Real, was once the royal road that connected California’s twenty-one mission churches. By the early 1970s – thanks to Hewlett-Packard, Fred Terman’s Stanford Industrial Park, William Shockley, Fairchild and its Fairchildren – it connected a bustling corridor of tech companies. In 1971, the region got a new moniker. Don Hoefler, a columnist for the weekly trade paper Electronic News, began writing s series of columns entitled “Silicon Valley USA,” and the name stuck.” [Page 198]

… and Investors

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“In the eleven years since he had assembled the deal for the traitorous eight to form Fairchild Semiconductors, Arthur Rock had helped to build something that was destined to be almost as important to the digital age as the microchip: venture capital.” [Page 185] “When he had sought a home for the traitorous eight in 1957, he pulled out a single piece of legal-pad paper, wrote a numbered list of names, and methodically phoned each one, crossing off the names as he went down the list. Eleven years later, he took another sheet of paper and listed people who would be invited to invest and how many of the 500’000 shares available at $5 apiece he would offer to each. […] It took them less than two days to raise the money. […] All I had to tell people was that it was Noyce and Moore. They didn’t need to know much else.” [Pages 187-88]

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The Intel culture

“There arose at Intel an innovation that had almost as much of an impact on the digital age as any [other]. It was the invention of a corporate culture and management style that was the antithesis of the hierarchical organization of East Coast companies.” [[Page 189] “The Intel culture, which would permeate the culture of Silicon Valley, was a product of all three men. [Noyce, Moore and Grove]. […] It was devoid of the trappings of hierarchy. There were no reserved parking places. Everyone including Noyce and Moore, worked in similar cubicles. […] “There were no privileges anywhere” recalled Ann Bowers, who was the personnel director and later married Noyce, [she would then become Steve Jobs’ first director of human resources] “we started a form of company culture that was completely different than anything that had been before. It was a culture of meritocracy.
It was also a culture of innovation. Noyce had a theory that he developed after bridling the rigid hierarchy at Philco. The more open and unstructured a workplace, he believed, the faster new ideas would be sparked, disseminated, refined and applied.” [Pages 192-193]

The Complexity and Beauty of Innovation according to Walter Isaacson

The Innovators by Walter Isaacson is a great book because of its balanced description of the role of geniuses or disruptive innovators as much as of teamwork in incremental innovation. “The tale of their teamwork is important because we don’t often focus on how central their skill is to innovation. […] But we have far fewer tales of collaborative creativity, which is actually more important in understanding how today’s technology evolution was fashioned.” [Page 1] He also goes deeper: “I also explore the social and cultural forces that provide the atmosphere for innovation. For the birth of the digital age, this included a research ecosystem that was nurtured by the government spending and managed by a military-industrial collaboration. Intersecting with that was a loose alliance of community organizers, communal-minded hippies, do-it yourself hobbyists, and homebrew hackers, most of whom were suspicious of centralized authority.” [Page 2] ”Finally, I was struck by how the truest creativity of the digital age came from those who were able to connect the arts and sciences.” [Page 5]

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The computer

I was a little more cautious with chapter 2 as I have the feeling that the story of Ada Lovelace and Charles Babbage is well known. I may be wrong. But chapter 3 about the early days of the computer was mostly unknown to me. Who invented the computer? Probably many different people in different locations in the US, the UK and Germany, around WWII. “How did they develop this idea at the same time when war kept their two teams isolated? The answer is partly that advances in technology and theory made the moment ripe. Along with many innovators, Zuse and Stibitz were familiar with the use of relays in phone circuits, and it made sense to tie that to binary operations of math and logic. Likewise, Shannon, who was also very familiar with phone circuits, would be able to perform the logical tasks of Boolean algebra. The idea that digital circuits would be the key to computing was quickly becoming clear to researchers almost everywhere, even in isolated places like central Iowa.” [Page 54]

There would be a patent fight I did not know about. Read pages 82-84. You can also read the following on Wikipedia: “On June 26, 1947, J. Presper Eckert and John Mauchly were the first to file for patent on a digital computing device (ENIAC), much to the surprise of Atanasoff. The ABC [Atanasoff–Berry Computer] had been examined by John Mauchly in June 1941, and Isaac Auerbach, a former student of Mauchly’s, alleged that it influenced his later work on ENIAC, although Mauchly denied this. The ENIAC patent did not issue until 1964, and by 1967 Honeywell sued Sperry Rand in an attempt to break the ENIAC patents, arguing the ABC constituted prior art. The United States District Court for the District of Minnesota released its judgement on October 19, 1973, finding in Honeywell v. Sperry Rand that the ENIAC patent was a derivative of John Atanasoff’s invention.” [The trial had begun in June 1971 and the ENIAC patent was therefore made invalid]

I also liked his short comment about complementary skills. “Eckert and Mauchly served as counterbalances for each other, which made them typical of so many digital-age leadership duos. Eckert drove people with a passion for precision; Mauchly tended to calm them and make them feel loved.” [Pages 74-75]

Women in Technology and Science

It is in chapter 4 about Programming that Isaacson addresses the role of women. “[Grace Hopper] education wasn’t as unusual as you might think. She was the eleventh woman to get a math doctorate from Yale, the first being in 1895. It was not at all uncommon for a woman, especially from a successful family, to get a doctorate in math in the 1930s. In fact, it was more common than it would be a generation later. The number of American women who got doctorates in math during the 1930s was 133, which was 15 percent of the total number of American math doctorates. During the decade of the 1950s, only 106 American women got math doctorates, which was a mere 4 percent of the total. (By the first decade of the 2000 things had more than rebounded and there were 1,600 women who got math doctorates, 30 percent of the total.)” [Page 88]

Not surprisingly, in the early days of computer development, men worked more in hardware whereas women would be in software. “All the engineers who built ENIAC’s hardware were men. Less heralded by history was a group of women, six in particular, who turned out to be almost as important in the development of modern computing.” [Page 95] “Shortly before she died in 2011, Jean Jennings Bartik reflected proudly on the fact that all the programmers who created the first general-purpose computer were women. « Despite our coming of age in an era when women’s career opportunities were generally quite confined, we helped initiate the era of the computer. » It happened because a lot of women back then had studied math and their skills were in demand. There was also an irony involved: the boys with their toys thought that assembling the hardware was the most important task, and thus a man’s job. « American science and engineering was even more sexist than it is today, » Jennings said. « If the ENIAC’s administration had known how crucial programming would be to the functioning of the electronic computer and how complex it would prove to be, they might have been more hesitant to give such an important role to women.” [Pages 99-100]

The sources of innovation

“Hopper’s historical sections focused on personalities. In doing so, her book emphasized the role of individuals. In contrast, shortly after Hopper’s book was completed, the executives at IBM commissioned their own history of the Mark I that gave primary credit to the IBM teams in Endicott, New York, who had constructed the machine. “IBM interests were best served by replacing individual history with organizational history,” the historian Kurt Beyer wrote in a study of Hopper. “The locus of technological innovation, according to IBM was the corporation. The myth of the lone radical inventor working in the laboratory or basement was replaced by the reality of teams of faceless organizational engineers contributing incremental advancements.” In the IBM version of history, the Mark I contained a long list of small innovations, such as the ratchet-type counter and the double-checked card feed, that IBM’s book attributed to a bevy of little-known engineers who worked collaboratively in Endicott.
The difference between Hopper’s version of history and IBM’s ran deeper than a dispute over who should get the most credit. It showed fundamentally contrasting outlooks on the history of innovations. Some studies of technology and science emphasize, as Hopper did, the role of creative inventors who make innovative leaps. Other studies emphasize the role of teams and institutions, such as the collaborative work done at Bell Labs and IBM’s Endicott facility. This latter approach tries to show that what may seem like creative leaps – the Eureka moment – are actually the result of an evolutionary process that occurs when ideas, concepts, technologies, and engineering methods ripen together. Neither way of looking at technological advancement is, on its oqn, completely satisfying. Most of the great innovations of the digital age sprang from an interplay of creative individuals (Mauchly, Turing, von Neumann, Aiken) with teams that knew how to implement their ideas.”
[Pages 91-92]

Google about Disruptive and Incremental Innovation

This is very similar to what I read about Google and posted recently in The Importance and Difficulty of Culture in Start-ups: Google again…: “To us, innovation entails both the production and implementation of novel and useful ideas. Since “novel” is often just a fancy synonym for “new”, we should also clarify that for something to be innovative, it needs to offer new functionality, but it also has to be surprising. If your customers are asking for it, you aren’t being innovative when you give them what they want; you are just being responsive. That’s a good thing, but it’s not innovative. Finally “useful” is a rather underwhelming adjective to describe that innovation hottie, so let’s add an adverb and make it radically useful, Voilà: For something to be innovative, it needs to be new, surprising, and radically useful.” […] “But Google also releases over five hundred improvements to its search every year. Is that innovative? Or incremental? They are new and surprising, for sure, but while each one of them, by itself is useful, it may be a stretch to call it radically useful. Put them all together, though, and they are. […] This more inclusive definition – innovation isn’t just about the really new, really big things – matters because it affords everyone the opportunity to innovate, rather than keeping it to the exclusive realm of these few people in that off-campus building [Google[x]] whose job is to innovate.” [How Google Works – Page 206]

Maybe more about The Innovators soon…

Can the next google come from Europe? An answer by Fathi Derder

Fathi Derder, a young Swiss politician and former journalist, gave his views in the book Le prochain Google sera Suisse (à 10 conditions). [The Next Google will be Swiss (provided 10 conditions)].

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I recognized some of my concerns in the foreword of the author, in his frustrations and his hopes. “Our start-ups do not grow in Switzerland. No trace of a Swiss Google. The last major Swiss success was Logitech, thirty years ago. Our start-ups are certainly good. But when it comes to grow rapidly and on a large scale, they leave Switzerland”[Page 9]. And his answer? “[…] If Switzerland wants to remain prosperous, if it wants to be able to anticipate and invent the world of tomorrow, we need two basic ingredients: memory and craziness” [Page 11].

Switzerland is not world champion of innovation

Derder is concerned about the lack of interest of the media and politicians because everything would be fine in the best of Swiss worlds…but: “The rankings are misleading and based on an abuse of language: we are certainly world champions in education, research, science and patents (from the multinational corporattions). But not in innovation. These are two different things. But in terms [of innovation] (the transformation of ideas into products and services that create value), there is much room for improvement” [Page 18-19].

To have the next Google in Switzerland, you need to have to the three “C”, Capital, Cerveaux (brains) and a Culture of failure and risk [page 35].

This certainly reminds me the “How to be Silicon Valley” by Paul Graham: “Within the US, towns have become startup hubs if and only if they have both rich people and nerds. Few startups happen in Miami, for example, because although it’s full of rich people, it has few nerds. It’s not the kind of place nerds like. Whereas Pittsburgh has the opposite problem: plenty of nerds, but no rich people.”

In this book of almost 180 pages are listed the ten conditions:
• Attracting the best talents
• Boosting venture capital (and encourage investment in SMEs)
• Simplifying the lives of entrepreneurs (and of investors)
• Providing resources for basic research
• Bringing universities and businesses together
• Developing thematic centers of excellence
• Establishing a national digital strategy
• Committing the state (and the army) to the ecosystem
• Enhancing data protection (and encouraging citizens to protect them anonymously)
• Valuing the Swiss success stories (and make them popular)

Derder is a super supporter of start-ups and his book is a great addition to understanding why start-ups are unique and essential. I believe however that the challenges are mostly cultural as I wrote recently in Why doesn’t Europe create any Google or Apple? You will not be surprised therefore if I prefer to stop with his 3 “C”s. In a presentation I recently prepared, I gave my ten conditions for innovation, all linked to a culture of innovation:
• Collaborate, even with Competitors
• Be Trustful
• Have a healthy disrespect for authority
• Do not lie (to yourself)
• Believe in your Instinct …
• … and have Courage
• In Innovation, the example comes from above
• Bet on Talent (and Youth)
• Do not fear Failure
• Be passionate

Up to you to choose…

Peter Thiel – Zero to One (part 2)

I just finished Zero to One and here are a few more comments, less about entrepreneurship than about social issues. Whatever the reputation of Thiel in Silicon Valley as a possible Libertarian, there were a couple of topics he addresses very convincingly. He is not a pure Contrarian. He disagrees with mainstream fashion in a very serious manner. Here are a couple of examples:

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– The machine will not replace humankind
Yes computers have made impressive progress in the recent decades, but not to the point of replacing mankind. He shows very convincingly through the cases of Paypal and Palantir [pages 144-148] that computers cannot solve automatically tough issues but are only (excellent and critical) complements to human beings. Even the Google experiment of recognizing cats “seems impressive – until you remember that an average four-year-old can do it flawlessly” [page 143]. He finishes his chapter about Man and Machine this way: “But even if strong AI is a real possibility rather than an imponderable mystery, it won’t happen anytime soon: replacement by computers is a worry for the 22nd century. Indefinite fears about the far future shouldn’t stop us from making definite plans today. Luddites claim that we shouldn’t build the computers that might replace people someday; crazed futurists argue that we should. These two positions are mutually exclusive but they are not exhaustive: there is room in between for sane people to build a vastly better world in the decades ahead. As we find new ways to use computers, they won’t just get better at the kinds of things people already do: they’ll help us to do what was previously unimaginable” [pages 150-151]. You will not be surprised I prefer this to Kurweil views.

– Greentech was a bubble and it was obvious from day 1.
I was always puzzled with greentech/cleantech. Why are people so excited about the promise to solve an important problem when we do not have any solution. Thiel is far tougher. First he shows the obvious: it was a bubble.

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Then he analyzes this industry through his “zero to one” arguments.
“Most cleantech companies crashed because they neglected one or more of the seven questions that every business must answer:
– Engineering: can you create a breakthrough technology instead of incremental improvements?
– Timing: is now the right time to start your particular business?
– Monopoly: are you starting with a big share of a small market?
– People: do you have the right team?
– Distribution: do you have a way to not just create but deliver your product?
– Durability: will your market position be defensible 10 and 20 years into the future?
– Secret: have you identified a unique opportunity that others don’t see?
If you do not have answers to these questions, you’ll run into lots of “bad luck” and your business will fail. If you nail all seven, you’ll master fortune and succeed. Even getting five or six correct might work. But the striking thing about the cleantech bubble was that people were starting companies with zero good answers – and that meant hoping for a miracle”
[page 154]. What’s next? Fintech?