Category Archives: business

Thinking bout Uber and Rapid Growth

Uber  has just found itself in a bit of a pickle. During the time it has seen massive growth, its HR policies within the firm apparently have imploded. Something to do with sexual harassment. Remember how horrified everyone was when the harasser was old man Ailes? Now it is cool young masters of the universe. Ooops!

Fred Wilson thinks that firms in this type of massive growth track all risk losing control of their HR policies.  Fred is a smart guy, and no doubt he is right. And that makes me wonder if we should be so enthralled by firms that are experiencing this type of massive growth. We bow down to them. But from an organizational perspective, they are messes. Out of control.

I wonder whether we might find ways to get the benefits of innovation without this type of life on steroids type of frenzy. Something to think about.

The Great Retail Game Continues

Warren Buffet just dumped  his Walmart stock. He apparently is giving up on the hope that Walmart will figure out how to compete with Amazon. Walmart is huge compared to Amazon in everything except where it matters.

Walmart’s online sales were $13.7 billion in 2015, compared to Amazon’s $107 billion. Walmart is still ahead in overall sales with $482 billion, four times as big as Amazon’s revenue.

There is one more issue – America has too many stores chasing too few customers. Retail — as usual — is in a state of flux.

So Long to Net Neutrality?

Net neutrality has been a key principle that has fostered innovation on the web. In sum, it prevents access providers from discriminating between the various services that run through their platforms. That allowed little guys to elbow their way onto your mobile phone screen whether the  big boys like it or not.

Well., the Trump administration may be getting ready to change all that. Fred Wilson offers a sad obit.

Who voted for this guy anyway?

Plugging In Globally

We have heard this story many, many times : The 20th century brought us unimaginable value added by taking advantage of economies of scale. Just think of Henry Ford’s assembly line, vastly decreasing the cost of buying a car and apply that to just about everything we pay for.

And of course, that is what happened. In the 20th century it paid to get big, because getting big gave you economies of scale  to exploit big markets. the bigger, the better! And it was too expensive for rivals to catch up. You could buy competitive advantage.

Will that also be the story of the 21st century? We can never know for sure when we start talking about the future. At the same time, we can say something about what 20th century thinking misses out on. And that is interesting.

The 20th century way of scaling is essentially “one size fits all”. As Henry Ford supposedly said “You can have any color you want, as long as it is black.”  That is important if the producer has to pay to add capacity to change colors. That adds to costs.

But what if you could add that capacity without incurring the cost? This is the promise of platforming. Other folks may already have that capacity, and if they can just “plug it in” via a platform, you get both scaling and differentiation.

Dronebase has succeed using this idea. Dronebase offers drone flights to commercial users. Originally, it used its own drones. But the idea was to scale by allowing drone owners from around the world to offer drone flights using their drones to buyers via a platform.  Fred Wilson tells the story.  Nice!

To make platforming work, the platform builder has to understand the “plug in” concept. Boiling it all down, platforms are a vehicle for folks to plug in capacity. One can create plug in opportunities in a variety of ways, and one should choose the method based on what the providers of excess capacity can offer.

Bottom line – this way of exploiting market opportunities is not new. The technology that is now available to make it easier is new and developing rapidly. We can expect a lot more from “plug in” platforming.

Stay tuned!

How Many Techs Does it take …

I am still getting used to the rise of fintech and now I hear about femtech.

I am all for it. Indeed, i wish women already had better tech products to  meet their needs. The fact that they do not, and that start ups might succeed simply because they are aware of what women need is rather striking.

It makes you wonder how many other markets are not well served by mainstream companies. My guess – there are quite a few niches out there.

Adventures of the Mind

While staying with a friend on my recent trip to the US, I mentioned my interest in accelerating the diffusion and application of new ideas. If that sounds abstract, consider these two examples

  •  In 1832 London was hit by its first wave of cholera. No one knew what it was, but thousands died. In fact, Londoners had the technology to figure this out and rid themselves of this terrible epidemic – all they needed to do was to break out the microscopes to look at their water. No one did that until 1848, when Dr. John Snow took a peek and said “Hey! there is something in there!” He published his findings and no one believed him. It took decades more to get folks to see the obvious, and build the great London sewer that eradicated cholera- That happened in 1868. Slow?  No, if you consider that something like this had never been done before. Yes, if you consider that the solution to the problem could have been discovered in 1832 – and thousands of lives could have been saved. BTW, the smart folks over in Hamburg apparently did not get that message, and were taken by surprise when cholera broke out there in 1893. And that is just one example. Cholera outbreaks have persisted into the 20th century where people drink the water that they also poop into. Oops!
  • After Edison promoted the use of electricity to illuminate houses with his light bulb, folks went full bore to wire their houses – for lighting. It took another 15 years or so to figure out that electricity in the house could also power electric engines – like  washers  The idea of installing outlets seems so obvious now. So why did it take so long? There really is no acceptable reason.

This gap between discovery and application is no big deal when problems do not demand immediate solutions. It does lend credence to Noam Chomsky’s assertion that many. many more great ideas have been forgotten than ever used. At the same time, one might argue that more pressing problems need to get attention first. Fair enough. Perhaps we have limited capacity for absorbing and using new ideas that is not easily enlarged.  The gap becomes a crisis when solutions are urgently needed.  So the problem of the missing electrical outlets might be forgiven. Less so the failure to use a microscope to find cholera and then act on the findings while thousands died from the disease over a period of decades.

As an aside, this in turn, raises the rather fascinating question of how we decide which problems are urgent and which are not.  So, we figured out how to get rid of cholera back in 1868 … and allow it to fester in Haiti today. No doubt that problems plaguing the poor get less attention than problems plaguing those with influence. A disturbing trend has been to blame the poor for those problems (like cholera), rather than try to understand the problems themselves. Hmmm … that would appear to be correctable, and yet, we do not seem to overcome this bias so easily. I wonder why not?

One more example of odd prioritization. We can build smaller and safer thorium reactors that do not rely on uranium to produce electricity, but we do not. BTW, ever wonder why it was decided many decades ago, to use uranium as the fuel of choice for nuclear energy? Consider this from Discovery

… the real reason we use uranium over thorium is a result of wartime politics. Cold War-era governments (including ours) backed uranium-based reactors because they produced plutonium — handy for making nuclear weapons.

My point is not to criticize that decision, but to point out that a political decision was made about how to apply knowledge that we are still stuck with, even if there are better ways to doing the same thing. And while there is little doubt that we have a critical problem of generating more power with less risk, we blithely use inferior technology to do it.

Some will argue that we do not because it is relatively expensive to convert naturally occurring thorium into fuel. Aha!There is an odd parallel here to the early days in the 20th century. Back then, it was rather expensive to convert oil into gasoline, which is why kerosene was the fuel of choice for powering transportation.

That takes me back to my trip. As you may recall, this post started off with reference to a conversation. In that chat, my friend listened to my ideas and  lent me a book called “Ideas for Rent”. It is the story of a company called UOP. The first part of the book is about how UOP fought to get market share for its refining process for turning oil into gasoline. UOP had a superior process, and its CEO, Hiram Halle, made the right, and visionary call, that in order to get its product to market faster, UOP would license it rather than try to build its own refineries.  BTW, this is just a tiny sliver of the adventure that Halle et al found themselves in as they fought to survive and eventually triumph.

Here is the interesting thing. The other suppliers of competing technologies fought tooth and nail to continue to sell their obviously inferior products. And it took decades of brawling to sort this out. You have to admire the tenacity of Hiram Halle and his team to prevail. At the same time, you have to wonder about the system that made it so expensive, difficult, risky and time consuming just to prove a basic fact about which innovation worked better in such an important emerging market.

Are we better at this now?  I wonder.

What do you think?

Follow Up – There is a similar gap that one often finds between the time a revolutionary product or service is offered and the time it starts to dominate the market. Folks do not always shift their behavior patterns quickly, even if something new is better. Fred Wilson writes about this with respect to music streaming. He thought streaming was the way to go twenty years ago, and it is just now starting to dominate the market.