An App Store and Service to Completely Change the World

We are standing in the middle of one of the major turning points in technology history.

We will only know whether that statement is true in retrospect in a few years time but I believe that the developments around the Watson computing model are creating a new wave of innovation possibilities.

ZDNET has reported on IBM setting up a Watson division with $1 billion dollars in funding and 2,000 employees to leverage the investment that has gone into developing the Watson cognitive computing model:

IBM forms Watson Business Group: Will commercialization follow?

Including:

The Watson Business Group will break down into four groups:

  • One focused on research and development on cognitive computing.
  • Another aimed at applying Watson to new industries to “disrupt and transform how business is done.”
  • An implementation group to ensure Watson has services support to keep customers satisfied. 
  • An engagement team to sell and market Watson.

and

Specifically, IBM is launching the following Watson cloud services:

  • IBM Watson Discovery Advisor is aimed at pharmaceutical, publishing and education research. The promise here is that Watson will wade through search results to deliver data and context faster for researchers.
  • IBM Watson Analytics Advisor is designed to be used by enterprises to send questions and raw data sets to Watson and allow the system to deliver insight.

and:

Big Blue said it will invest $1 billion into the Watson division including $100 million to fund startups developing cognitive apps

This follows a story in The Verge in the middle of November announcing that Watson was being opened up to developers through an API that would allow people to build applications on top of its platform:

IBM’s more powerful Watson supercomputer is opening up for public use

The combination of natural language/cognitive computing capability, with the system operating as a platform that others can build new applications on is analogous to the levels of innovation that we have seen in smartphone and tablet application markets in the last few years. The major difference is that the focus will be almost purely on applications that can disrupt whole systems and industries deliberately.

The value in the app development market has been twofold:

  1. The possibilities envisaged by tens of thousands of developers all around the world adds hugely to the perspectives and possible ideas that can be generated compared to keeping things in house.
  2. The fact that all those people are prepared to risk their money and time to try stuff has bypassed the normal “MBA spreadsheet” assessment of ideas and funding so that lots more stuff has been tried. Trying more stuff means more stuff gets to prove it can work.

This has led to a huge flowering of applications, many of them trivial but some of them have been fantastic and world changing.

This can lead to big bang disruption as described by Steve Denning in his review of the book of the same name : Big Business’s Worst Nightmare

If IBM and Watson and the developers involved can get this right then I expect much higher levels of big bang disruption over the next few years. This means that the levels of change experienced by people and business over the next decade might pale into insignificance over the next decade.

As my friend Stowe Boyd would say: “welcome to the post normal!”

Paul Higgins

How to make Strategy SEXy

When I tell people that I am a futurist the reactions fall into two broad categories.

  • “That is so cool” – to which my response is generally “can you go and tell my 15 yr old because he in no way thinks I am cool”.
  • What the ****** is a futurist. That happened to me yesterday when I was sitting in the audience for the launch of a new Horizon Scanning tool that we are working on with the Department of Premier and Cabinet here in Victoria. The group in the seats behind me were saying “what is a futurist, there is supposed to be one here?” My general response to that reaction is : we help people think differently about the future so they can shape their strategy.

I like to show people the Futurist Meme from http://www.wfs.org/content/what-people-think-i-do-meme-futurist

because it is largely true from a number of perspectives and I do like to think that what I do is about helping people get a few more pieces of the puzzle about what the future might hold.

Because the future is inherently unknowable we need to take the possibilities that we see and put them into a forward strategy because while the world is highly uncertain, complex, and rapidly changing we still need to do stuff.

To do that we use the acronym SEX for strategy. Partly because it is easy for people to remember  and partly because sex is sort of involved. Sex stand for Strategy, Experimentation, and eXploration.:

Strategy

Strategy is about what we know enough about to create a hard, detailed plan. This can be the case even in the face of considerable uncertainty. For example if we look at agricultural research in the face of climate change there is a huge amount of uncertainty. Even if we put aside the arguments between those that believe in climate change being largely man -made and those that do not there is still considerable uncertainty in the macro models. Beyond that once we drill down into specific geographical regions the uncertainty is much higher. In the face of that uncertainty research into improving the water utilsation of plants is still very useful. If climate change does not occur then those plants will still be useful in areas that were previously too dry to grow them. If the actual regional outcomes are far different that the median models then the plants will still be useful somewhere, even if it may be far away from what was envisaged when the research began. Strategy is about creating a detailed, defined plan that fits how the organisation actually works rather than fitting the organisation to the plan. It is also about finding things to do that are successful in multiple forward scenarios.

Experimentation

The reality is that we live in a complex, rapidly changing and uncertain world. Most people respond to that  by trying to create certainty through forecasts or spreadsheet models derived from MBA programs that give the aura of robustness. The reality is that in a complex, disruptive world there are many things that will blind side us. This is hard for many people to accept, and especially for the smartest people in the room who have a hard time accepting that they cannot know the answers, Or even if they do, they have a hard time admitting it to others. This is where sex comes in……

Species and ecosystems respond to inherent uncertainty in their environment by having diversity, and populations or ecosystems that do not have that diversity are very brittle in the face of change. That diversity is fueled in part by sex and the exchange of genetic material. The parallel in organisations is to have an exchange of ideas and perspectives that are driven into many small experiments and trials that we are continually putting in place at the edges. Then as the environment changes we have multiple, pre-made approaches and capabilities that can respond to the changes. This requires a cultural change that accepts and even rewards failure, and also accepts that we have to feel our way forward.

It is our strong view that this experimentation is best carried out via a group of organisations so that we get a variety of ideas and perspectives, and also share resources  and risks in trying out things.

eXploration

No matter how good our strategy is, and how well we are experimenting at the edge we also need to keep our eye out for what might happen. This allows us to change our detailed strategy as necessary but also inform our thinking and and design of experiments and trials. This exploration needs to be both lateral and vertical.

The science fiction writer William Gibson is famous for saying “the future is already here it is just unevenly distributed”. There are lots of new and different things happening in different industries, different cultures, different areas of expertise and different countries. I am also fond of the saying that “good artists copy, great artists steal” Get out and have a look at what you can bring back into your organisation or industry and change how things work. That is the lateral approach.

The vertical approach is about deeper understanding. It is about getting below the surface of trends or ideas and understanding what is really driving them. It is about looking at the drivers from the point of view of behavioural economics, metaphors, philosophy, etc and getting a deeper understanding. It is about dropping the stuff you see into thinking frameworks and models so you can understand more deeply than anyone else and design approaches and strategy that others have not thought about. It is at the heart of business model innovation.

If you work out a way to put all this together in a way that suits how your organisation really works then you can create an organisation that can strategise and feel its way to the future more successfully.

Paul Higgins

p.s. – next month we are starting a collaboration process on experimentation with a number of organisations, and yesterdays launch with Dpt of Premier and Cabinet is about a formal scanning model for exploration. If you are interested in either of those approaches contact me at paul@emergentfutures.com

Reflections from being at the Business Innovation Factory Conference – in a word WOW

For the last 3 days of last week it was my absolute pleasure and honour to be part of the Business Innovation Factory Conference (www.businessinnovationfactory.com/) in Providence, Rhode Island. BIF8 as it was called was a fantastic collection of storytellers and innovator participants.

I would like to reflect on some people and presentations that left a lasting impression on me:
Carne Ross
 
Carne is an ex British Diplomat who is now an independent diplomat which is an interesting concept I had never thought about before (www.independentdiplomat.org). Carne was open and generous in his presentation by talking about how what looked like a brilliantly planned strategy was a series of stumbles and educated guesses. Besides that he described how in a world of networks and globalised connections an alternate approach to politics and diplomacy was both required and possible.
Tony Hsieh
Tony is the CEO of Zappos (www.zappos.com) the online apparel and footwear company but what he talked about was different. Tony and others are investing $350m into downtown Las Vegas in order to build a better community. The purpose is twofold. Firstly based on Edward Glaesner’s work and book “Triumph of the City”, Tony believes cties can be redesigned to be more innovative than they already are. Secondly this is all based on a belief that this needs an approach where people are happy in their community. The presentation made me feel a bit foolish as I have been presenting on cities growing more innovative as they grow for a while. However I had never thought about how this was by accident and therefore we could apply intelligent design to make the effects better.
Jeffrey Sparr
Jeffrey is the founder of PeaceLove (www.peacelovestudios.com) and gave a heartfelt presentation on mental health. Jeffrey suffers from from OCD and he put it all out there on stage and spoke with true passion about his efforts to help others suffering from mental illness through artistic methods. Jeffrey struggles every day with his illness and puts the rest of us to shame. I will be thinking of him the next time I let little things get in the way of doing stuff.
Nichlas Lowinger
Nicholas is 14 years old but has achieved more than most adults. He is the founder of Gotta Have Sole (www.gottahavesole.org) which has raised over $250,000 in financial and footwear donations to give kids in homeless shelters new shoes. His poised and professional presentation made me really think about the emotional difference between those kids getting new shoes or old donated ones.
Teny Gross
Teny is an ex Israeli soldier who is now the Executive Director of the Institute for the Study and Practice of Nonviolence (www.nonviolenceinstitute.org). Teny gave a Bill Clinton like speech full of stories, emotion and numbers. The facts that 75% of the deaths are caused by 0.3% of the population and that each murder costs the system $8.3m put the whole problem into perspective from a number of points of view. It is a massive problem that astounds lots of people from outside of the USA. I left with some hope for the future.
Darrell Hammond
Darrell is the CEO and Founder of KaBOOM (www.kaboom.org). Kaboom has helped build over 2,000 playgrounds and playplaces in places where kids don’t have them. Darrell is a big believer in kids being able to get to play and how showing communities they can make a difference can empower those communities. A truly inspiring story.
Jeffrey Heimans
 
Jeffrey is a fellow Australian, and the founder of Purpose (www.purpose.com). Apart from showing us video of him as an 8 year and 12 year old leading me to think of him as the scariest child I have ever seen he co-founded GetUp and now works on helping other movements start and sustain their efforts. I think of our mission being leveraging our skills to help others make a difference in their community. Jeffrey takes that up to a level that is many levels to the power of 10.
Jeff Lieberman
Jeff is a sculptor, musician, robotocist and host of the Discovery Channel’s Time Warp. He amazed us with a super slow video of a drop of water hitting the surface of a pool of water to demonstrate how we sometimes do not really know what is going on until we look at it a different way. He also talked about the nature of now and the future which I am going to steal for my presentations (don’t worry I told him)
David Mcaulay
David is the author and illustrator of The New Way Things Work. He just blew me away with a stream of consciousness presentation on the history of innovation. To hold that in your head and then create books that can explain that to kids while not dumbing it down is a stunning achievement.
Hilary Salmons
Hilary is the ED of the Providence After School Alliance (www.mypasa.org) which has transformed the after school program to such an extent that it is packing in the kids and teachers are asking for the methods to be brought back into the school program. Imagine if we could achieve that in every school?
Besides the absolute achievement of the presenters (sorry Saul – Storytellers) the other thing that was so powerful was the vulnerability and openness. We are used to politicians, leaders, and conference presenters telling us how successful they are but rarely see the struggles and failures and crises of confidence that come with the journey.Not at BIF
It was hard not to feel continually inadequate in this company but as someone else said late in the process, everybody was feeling the same way. The challenge was to take that feeling and go and do some stuff that makes a difference

I made some great connections with people that I hope will help me do that, but as I said to one email contact straight after the conference hope is not a strategy. So watch this space.
The whole experience was an interesting, stimulating and inspiring experience that was well worth the trip half way around the world. I intend to contribute to this amazing community of people and take what I have learnt into our work and our communities. I encourage you to have a look at some of the people I have briefly mentioned above. There are many others that I have left out in order to be be brief.
You can see videos from previous BIF summits at: http://www.businessinnovationfactory.com/iss
You can see details of BIF 8 at http://www.businessinnovationfactory.com/bif-8
and my friend Jess has published her fantastic sketch notes from the whole conference at : http://www.flickr.com/photos/jeschnotes/sets/72157631581051973/
Finally to the Piker, MFceo, SKbutt and my presentation coach. You know who you are and I would lke to thank you for taking a futurist a long way from home under your collective wing and making my trip far more enjoyable. I hope the friendship endures
Paul Higgins
Sept 24th 2012

The Looming Crisis for Crowdfunding – Why it is a Good Thing

Crowdfunding, where you put up an idea for a project and ask people from all over the world to back it with a pledge from their credit card is all the rage at the moment but it will experience a disaster in the near future. That disaster will not kill the value of the system but it will cause a re-organisation and re-evaluation of value.

As an example of the system I have backed a crowd funded project here in Melbourne for the Scanbox (http://www.kickstarter.com/projects/limemouse/scanbox-turn-your-smartphone-into-a-portable-scann) which is a portable box that folds down flat when you travel and stands up with small magnets when you set it up. You can place your phone on the top and it acts as a stable platform for taking photographs of receipts and documents up to A4 size. While you can already do that with your phone in your hands the photos can tend to be a bit blurred which causes problems with optical recognition systems and search. The project was designed by Lime Mouse (http://www.limemouse.com/) an app developer in Melbourne. They asked for $12,500 but raised $189,499. I have been giving Scanboxes away in my conference presentations and workshops for the last 6 weeks or so as a “prize from the future” and they have been so popular that I had to increase my level of backing to give more away.

In practice what happens is that people back a particular project and receive a reward related to the level of funding they have committed. This reward may be in product in the case of a music album or a new product, or it may be in recognition for community or environmental projects. This means that beyond raising money it is a great system for testing markets and support for ideas. If lots and lots of people love your idea and commit to taking product from you then you have tested the market in the best possible way – actual buying commitment rather than focus groups and market research questions.

Until recently you could not raise share capital on these systems here in Australia you can in Europe and the recent JOBS act in the USA is allowing that to occur in limited and controlled ways and that change is likely to spread. The system is going mainstream with the Australia Council for the Arts running a crowdfunding road show in July and August to show people how to use the system. (http://www.australiacouncil.gov.au/events/2012/crowdfunding-seminars)

There has been huge growth in the last 6 months alone. I presented on crowdfunding as an option for the Daimler Financial Services Asia Pacific leadership team for financing car sharing systems in February. At that time the largest crowdfunding site in the world Kickstarter had not had a single project that had raised $1 million. By the middle of June there were 7 projects that had raised over $1 million, including musician Amanda Palmer who raised $1,192,793 for a new album, book and music tour, and Pebble which raised $10,266,845 for an e-paper watch that connects to your smartphone. The Economist reported in June that research firm Massolution was forecasting US$2.8 billion will be raised this year compared to US$530 million in 2009 (see chart).

 

 

Via: http://www.economist.com/node/21556973

In addition to market testing and fundraising the crowdfunding system is also changing the way that business models work. It is allowing musicians like Amanda Palmer to go their own way, outside of the standard music industry structures. Other musicians are using it to plan tours by committing to go to places that promoters would otherwise not even look at. In the future I can see venture capital firms that have high levels of trust and high profiles allowing their initial backing of projects and companies to then be used to influence people to back that company. That would increase the power of the entrepreneurs along with the influence of the best venture capitalists.

But there is a dark cloud among all this silver lining. There will almost certainly be a major financial or project scandal on one of the major crowdfunding sites in the near future. Those of you who have read my other articles will know that I don’t really believe in forecasting, so you may be asking yourself why I am making this prediction. The reason is the only sure fire way I know how to predict things is by looking at long standing human behaviour. If you had asked me 20 years ago what would dominate large sections of the internet I would have responded with gossip, gambling, pornography, and crime because humans have been carrying out those activities for thousands of years and would continue to do so on a new platform. People have been having wild and crazy ideas and scamming people for thousands of years, therefore it is highly likely to happen in a crowdfunding situation. What will happen is that an idea that is being promoted will not come into reality and therefore people will not receive the product they were promised, or someone will run off with a bucket load of money. That will generate huge publicity.

That disaster will re-shape how crowdfunding works with trust being a key determinant of success. The perceived increase in levels of risk will mean that funding will flow more towards those people with a strong track record, or with some sort of other validation from a trusted individual or organisation who would not risk their reputation or brand in a problematic venture. Over time this will strengthen crowd funding, and personally I would like to put my trust and money in the hands of an open and transparent system like crowdfunding than in the hands of bankers and traders given their track record in the last few years.