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“If the last century was marked by the ability to observe the interactions of physical matter—think of technologies like x-ray and radar—this century, he says, is going to be defined by the ability to observe people through the data they share.”—The Data Made Me Do It - MIT Technology Review
The Next Big Thing Is Not Innovative
I recently saw an article about yet another mobile social platform that raised a boatload of money. I guess it is okay though since it allows teens to express themselves by creating their own memes with cool stickers and sharing them with all their friends. That is obviously worth $13 million because it is the next big viral thing or something to that effect.
While everyone is hip to the current enterprise tech hotness, a post the other day dispelled some of the myths about how “easy” the enterprise space is. I cannot dispute the conclusions and it certainly does take significant time and resources to reach the holy IPO stage. It is by no means easy to build a new solution that the enterprise market would willingly buy and to suffer through painfully long sales cycles. Then you have to scale that business. But then the author ends by saying “sure you don’t want to build a dating app?”
A few weeks ago, I saw yet another in a long line of “stupid idea that became big” articles. I get what Dustin is saying, but it irked me nonetheless. There is no doubt that things like Pinterest or Vine are popular and fill their core users with some modicum of joy, but then again so did Farmville. While he did not use the word innovative, he did say the founders “saw the future”. What future was that exactly, the future of occupying people’s time with yet more dipshit apps?
Now before you excoriate me for bashing Pinterest, Vine, and other mobile, social consumer apps, ask yourself if they are truly innovative? Have they brought new technology to the table? Has the human condition been improved? If you take a long, hard look, calling these apps innovative, next-generation, game-changing, industry-creating technologies would be a stretch. They have the potential to be useful distribution channels that compliment existing social media channels. But ultimately they are still “stupid ideas” if you simply look at what they are. It is just that no one wants to say that because of how many users they have and what all the tech press is saying and how much money is circling around them.
What we have become in this cycle of tech innovation is a culture of chasing easy money. Whenever something becomes about the money, all other considerations get swept under the rug such as innovation and societal good and transparency. While this might initially sound strange coming from someone that is on the investment side of the tech ecosystem, it actually makes perfect sense. As an investor in early stage technology, one would want to look for the biggest game changing opportunities to maximize one’s return in exchange for accepting a high level of investment risk. That is because the game changers are the ones that create the biggest long-term upside by becoming something of a value multiplier. In other words, these are technologies that extend their value by evolving into platforms for other technologies and business models. Think Google and the search market, Facebook and open API’s, or smartphones and app stores.
Instead the game for investors has become the quick flips and sure bets. Thus the institutions that purport to support innovation would rather put money into coffee shops. You can’t blame them for trying to lock in returns given their miserable performance over the past decade as an asset class. This is one key reason for the exodus from early stage to late stage capital by many VC firms. It is a race to reduce risk and snag those easy, near-term (albeit smaller) returns. I am not saying that is wrong, but that is not venture investing and it certainly has nothing to do with supporting the innovation economy. If anything, it looks more about justifying one’s existence and exorbitant management fees to LP’s.
While I may sound pessimistic, I do not believe for a second that we are bereft of big ideas. It is just that the incentives to take on truly big risks on crazy ideas and mad founders are simply not as appealing. When VC’s and the tech media hype machine proclaim the next big thing, what they really mean is the next viral hit that can be cashed out for a quick buck. The ideas that are truly innovative are too raw or too bizarre or too challenging or too counter-intuitive. On the surface, they look ugly and unimpressive and down right idiotic. They do not conform to our perceptions of innovative and cool. They are pitched by quacks and weirdos and freaks. They are developed in nondescript labs out of the spotlight and beyond the mainstream. And they are certainly not on TechCrunch and other supposed forums of “disruptive technology”.
The “Next Big Thing” is not the “Next Big Innovation”. Maybe we need a new phrase, but at the very least we should stop conflating the two and be more honest then when we talk about what is innovative and disruptive versus viral and money making. While the two can go hand-in-hand, the reality is that what is innovative usually has to go through several rounds of humiliating false starts before it can be commercialized and monetized. It simply takes way more money, time, and risk than investors can stomach. Consider the path that innovations such as at-home genetic testing or commercial space travel have had to take and it is still early days. Those are ideas that truly take guts to start and to fund, but the impact on lives and the economic upside is immeasurable.
There are big ideas being worked on right now. We do not have to wonder if they exist, you just have to look a bit harder beyond the obvious places. You see, the future is here and it is a lot more interesting than an app.
Wanting to be liked
This interview with a 14-year-old girl about how she uses her iPhone and social media is almost equal parts fascinating and terrifying. Some choice quotes:
“I’ll wake up in the morning and go on Facebook just … because,” Casey says. “It’s not like I want to or I don’t. I just go on it. I’m, like, forced to. I don’t know why. I need to. Facebook takes up my whole life.”
“I bring [my iPhone] everywhere. I have to be holding it,” Casey says. “It’s like OCD — I have to have it with me. And I check it a lot.”
Not having an iPhone can be social suicide, notes Casey. One of her friends found herself effectively exiled from their circle for six months because her parents dawdled in upgrading her to an iPhone. Without it, she had no access to the iMessage group chat, where it seemed all their shared plans were being made.
“She wasn’t in the group chat, so we stopped being friends with her,” Casey says. “Not because we didn’t like her, but we just weren’t in contact with her.”
The most important and stress-inducing statistic of all is the number of “likes” she gets when she posts a new Facebook profile picture — followed closely by how many “likes” her friends’ photos receive. Casey’s most recent profile photo received 117 “likes” and 56 comments from her friends, 19 of which they posted within a minute of Casey switching her photo, and all of which Casey “liked” personally.
“If you don’t get 100 ‘likes,’ you make other people share it so you get 100,” she explains. “Or else you just get upset. Everyone wants to get the most ‘likes.’ It’s like a popularity contest.”
“If I’m not watching TV, I’m on my phone. If I’m not on my phone, I’m on my computer. If I’m not doing any of those things, what am I supposed to do?” Casey says.
Writing As a Competitive Advantage
Yesterday an email exchange between the late Steve Jobs and some executives at book publisher Harper Collins made the rounds. Tho most commentary, retweets and reblogs focused on Steve’s negotiating tactics, I found another aspect of the exchange equally interesting.
Rather than the message, I wanted to highlight the medium.
Specifically, that this exchange happend in email. Sure, the emails reference back to a series of meetings and calls that lead up to the exchange but the real negotiating didn’t happen in the boardroom or over breakfast, it happened behind a keyboard.
This stuck out to me for a few reasons.
The first being that it matches my experience. Over the years, the vast majority of investments we’ve made have been agreed to behind keyboards, not in person. Which runs counter to much of the folklore of “the handshake deal” embedded in our startup culture. The reality is that in-person people are less comfortable. They aren’t as articulate. They forget, or are too nervous, to bring up certain sensitive issues.
I wasn’t in these Harper Collins negotiations, so don’t know if Jobs was just putting into writing what had already been spelled out in those prior meetings. My guess is it was a lot of restating what was already said, and a little new context or a different angle than was discussed live. Given that both parties were able to absorb the information without someone staring across the table, and looking at the clock, they were able to take the time to process the material and have a low decible, civil exchange that netted them a plan for moving forward.
The medium made the message resonate in a way a face to face exchange could not.
Pulling further back, I see the value of writing clearly and concisely becoming an increasingly important skill for digital workers. Partly for the reasons outlined above, but also because we’re moving into a massive wave of distributed work and self selected customers.
This means our voice, and the voice of our companies, are often going to be discovered and engaged with via the copy of our services, the content of our social media channels and the clarity of our emails.
I recently met with the manager of a large engineering team. As we talked he shared that one of the key pieces of his hiring process were a series of writing exercises. Sure it wasn’t coding, he went on, but his teams are distributed across multiple states with a few in other countries. The vast majority of their collaboration is happening in IRC, IM and email. As a result, he was hiring the engineers who not only knew how to build, but who knew how to communicate the whats, hows and whys in writing across those various channels.
Writing can be intimidating, even challenging. But I believe it will be an increasingly important medium for getting work done and convincing others of our ideas. Steve was a master of the medium and I’m glad we’ve gotten a small peek into how he used it.