The end of retail as we know it. A scenario of virtualization.

21 03 2010

Health toilet in Japan - Source: ideaconnection.com

It is always interesting to see how pushing some trends to the limit create challenging scenarios. While most people will agree about the existence of a trend, few will care to walk through the unintended consequences. Here is a great example of how our mental models if unchallenged can leave some gigantic blind spots in our understanding of what the future may hold.

Pr. Sanjay Sarma from MIT recently gave a presentation to an audience of supply chain executives on the state-of-the-art of sensing. Sensors are now ubiquitous: in you car, your house, your cell phone, etc. There is a clear consensus that this is just the beginning. More complex sensors are becoming more affordable everyday. The computing power and infrastructure to handle the data is also getting exponentially cheaper. With your IPhone, you can already scan the bar code of the product you want to buy, and search on the Internet where to find it at the cheapest price. We are just a couple of years away from sensing appliances in our homes. Your fridge will sense when you will be out of milk or Diet Coke and will signal it to you. The sensing toilet is a reality in Japan. After analyzing your “body fluids,” the toilet makes recommendations for your diet and will give you information that you used to only get through a blood test i.e. sugar level, etc.

Everybody in the audience bought into a future where sensing was omnipresent. The supply chain executives could already experience in their businesses how sensing has become a pervasive innovation – from GPS tracking to RFID tags. However, when asked about the potential implications in such a future, they quickly concluded that dynamic routing would be the most important impact in their respective industries. Sure, being able to reroute your fleet to avoid congestion will allow saving a lot of money. But, is it really the most dramatic impact you can think of for this type of technology? Read the rest of this entry »

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Geeks have done their share; it is now up to you, business leaders, to innovate!

5 03 2010

Cleantech Gap, Source: Clean Horizon Consulting

In their recently published book “Wired for Innovation,” MIT Professor Erik Brynjolfsson and Wharton lecturer Saunders contend that: “even if all technological progress were to stop tomorrow, business could create decades’worth of IT-enabled organizational innovation using only today’s technologies.” As a society, we all expect technology innovations to bring more progress to everybody, and at a faster pace. However, we rarely reflect on whether our business leaders innovate enough to match the high expectations we have for the technology community. How many times have you heard of a revolutionary technology vs. a revolutionary business plan?

Humor me on this one: should a technology be discarded because its benefits under the current business model does not overweight its costs? or should it be discarded because we could not think of any business model in which its benefits overweight its costs? Let’s take the electric vehicle as an example. In a previous post, I have shown some reserves regarding electric vehicles adoption because the technology still does not make economic sense in the current business models. However, I also affirmed that it could become a reality, today, with a company like Better Place which offers a revolutionary business model. Electric vehicles only make economic sense if you look at the total cost of ownership i.e. car’s price tag + fuel cost + maintenance cost. Therefore, Better Place knew they needed to find a business model that would leverage this challenge as a strength instead of a weakness. Instead of selling you a car, Better Place will sell you kilometers to drive, which translates into charged batteries. Like with a cell phone, you will buy the hardware (the car) and you will choose a plan that best fits your driving needs. Better Place owns the batteries and will provide you with a network of charging stations to recharge them – monitoring your consumption while doing so. cye88sebwgzu CYE88SEBWGZU Read the rest of this entry »





A new model for technology innovation: “Search and Development”

7 02 2010

Source: today.ucf.edu

Cleantech is on its way to potentially become the next transformative wave of innovation. As often, anticipating what the future will hold is about understanding how the past unraveled. Indeed, there is much to learn both in terms of investors’ mental models and potential analogies from past waves like the Internet and Biotech.

The emergence of Information technologies marked the triumph of the VC-backed model. The business and mainstream media helped build the myth of the geeky tech entrepreneur and the all-powerful venture capitalist. The lesson we all learned was that an idea could quickly move from concept to a reality – potentially unleashing millions of dollars while doing so. Of course in the process, numerous shaky business plans were funded; people saw value where there was just wind. Yet, tech entrepreneur/VC tandem survived the bubble and still embodies in our subconscious the perfect combination to generate technology innovation.

As a consequence, people still believe that this is the model to go for the next technology innovation. That is why, you see cleantech entrepreneurs and VC striving to walk the cleantech “revolution” along the same path i.e. funding, IPO, etc. However, savvy investors and business pundits raise some valid concerns as to the validity of the analogy. The beauty of the IT revolution was, and still is, that the development costs to reach scale are very limited. On the contrary, most of the cleantech requires longer development lead time and thus funding up to 10 times what was necessary for the proof of concept in the IT world. How many firms can realistically raise 100 million of dollars through the VC world to develop a conclusive prototype? The analogy falls short and begs for another point of reference. Read the rest of this entry »





Limits to growth? Beware of the next Malthus

12 01 2010

Source: Wikipedia

It is the perennial question. Are we outgrowing the Earth? Since Mathus’ dark predictions, the issue of Earth carrying capacity has been on and off the public agenda. There is clearly no definite answer as people have painted convincing scenarios for both sides of the question. On the on hand, the gloomy scenario depicts an earth suffocating under a booming population requiring more and more resources to attain new standards of wealth. On the other hand, technology optimists believe that game-changing innovations will enable a wealthier larger population (e.g. nuclear fusion, climate engineering, etc.)

It is typical that issues like these quickly evolve from a scientific “consensus building approach” to a heated advocacy debate. I will come back to this in a number of posts as it is symptomatic of society where science, policy and business worlds have collided. Instead of challenging and building on a work-in-progress theory like in any scientific problem, advocates from both sides monopolize the debate and believe that the truth will emerge from the best rhetoric. The main reason for this evolution resides in the inherent complexity of the issue, which leaves a scientific approach short of closing all the critical uncertainties. As a result, you see “religions” come to light as the debate gets parceled around nays-sayers and doomsayers, between right and wrong. Read the rest of this entry »