How to Keep Up with the Speed of Innovation
Sheldon Monteiro, CTO, discusses the role of improved connectivity in innovation and shifting business landscapes with Forbes.
Today it feels like like every day we learn about an incredible new technology, product or, service that was supposed to be a futuristic concept, but now is, “coming soon.” Nearly 20 years ago, just before the internet bubble in 2000-2001, new online concepts were being introduced at a dizzying pace, and today, during what some have dubbed, “The On-Demand Revolution,” the speed of innovation is leaps and bounds past what we saw at that time. This is partially due in part to significant jumps in computing power, internet speeds and how much investment capital is being thrown around. We also have younger generations that grew up with the internet and mobile phones and have the capability and tools necessary to research, develop and bring ideas to fruition at much earlier points than in the past. With some of the barriers to knowledge, experience and access to capital peeled away, more people feel empowered to innovate now perhaps than ever. So how does one keep up?
Per Harvard Business Review, there are four types of innovation; these include, breakthrough innovation, sustaining innovation, basic research, and disruptive innovation. Today there is a huge spotlight on the latter, especially those startups that try to turn existing markets upside down and take share quickly. If you want to jump into hot spaces now or disrupt an industry with a grand new idea, you can still win, but beware, the big players in that industry typically have huge budgets for research, development, patents (and patent enforcement attorneys). They also spend big to market their products and if you don’t have a way to protect your intellectual property, they can take your idea, replicate it and run in no time. Every year, the Consumer Electronics Show (CES) acts as a great litmus test to witness the state of innovation, from newcomers to market leaders. It shows what is hot right now, and telegraphs what is to come.
Taking place every January, CES is the heart of new product launches galore, and clearly shows what is new and hot, not to mention, serves as a reminder when industry leaders have slept a bit too much and fell behind, which can always be fixed by a bit of cash and some well-planned acquisitions. Updating products and services that consumers and businesses already understand with the latest technologies or improvements, or acquiring companies that have done this effectively, are good examples of sustaining innovation. This year, anything that could be infused with voice recognition, AI and machine learning was on display, with Amazon Alexa and Google Home leading the way. Nearly everything in one’s home can be internet-connected and many of the big car manufacturers have gone all in on self-driving vehicles whether on the ground, or now, in the air.
I spoke with two well-respected innovators to get their thoughts on innovations from CES and the state of innovation in 2019. Dennis Barrier, is the Co-Founder of global VC fund Cathay Innovation. Like many in the tech business, Dennis isn’t holding his breath for concepts like flying cars (especially since they might harm more than they help). Instead, he’s looking to those taking advantage of the shift towards a service economy, opting for better connected devices instead of more devices in general. “At CES 2019, we didn’t see an abundance of new voice assistants. We saw an abundance of smarter devices which bring new ways for consumers to interact with well-established voice assistants,” said Barrier. “A.I. is at this novel stage where founders and innovators don’t need to start from scratch to make something impactful.” Barrier suggests that two of the most interesting industries for disruptive innovation now are healthcare and finance. “One of our investments in the healthcare industry is using predictive AI to make earlier diagnoses and help doctors make better treatment decisions. This application could improve the quality of care for a lot of people, and it doesn’t need to be the most groundbreaking thing in healthcare to do it.” Barrier also mentioned their investment in mobile/online bank Chime. “ They have 2 million bank accounts in the U.S., and are adding 150,000 new accounts/month, which is more accounts than Wells Fargo, or Citibank.”
To better understand how improved connectivity in everything from smart homes to smart cities will change how business is done, I also reached out to Sheldon Monteiro, CTO of Publicis.Sapient. Sheldon boasts two decades of experience to his role at Publicis.Sapient where he is focused on building tech talent and innovation culture. “I think CES is becoming less about consumers and more of an industry showcase,” said Monteiro. “There are two key trends I want to highlight. The first are innovations that work to bring down costs. There was a company in brain robotics which was able to bring the cost of prosthetic limbs down tremendously – from $50k to just $5k. They accomplished this by reengineering how the prosthetics respond to the electrical impulses in severed limbs. Cost-saving advancements bring so much value, especially when they change how people live their lives. Montiero referenced Moore’s Law, when Intel co-founder Gordon Moore noted that the number of transistors on a chip doubled every two years while the costs were cut in half. Montiero noted that advances in technology capabilities such as quantum computing and reductions in costs of storage and processing will continue to be a driving force for innovation. He also mentioned that stages of technology evolution can be used for minor changes to existing products that benefit consumers on a daily basis. “The second trend I want to talk about is with untapped opportunities for connectivity. Samsung showed off a refrigerator with an unexpected machine learning component. The refrigerator uses an internal camera to keep track of what you regularly buy, and then adds those items into an online shopping cart. Consumers can get a lot of value out of Innovations like this, and nobody had to reinvent the refrigerator to achieve it.”
So perhaps first, it’s important to decide what kind of innovator to be; the one that takes big shots that also require a lot of time and money, or one that makes tweaks to existing products to get things on shelves and into online stores more quickly. Alternatively, some have been successful by copying an existing product or service with no patent protection and being the second or third to market. Sometimes, you can chip away at the market leader’s customer base and still generate strong revenue and brand recognition or acquire the patents yourself, any of which can lead to acquisition. So should one try to raise Uber-money and get into the race, or roll up one’s sleeves and try to bootstrap it? If you want to offer a new concept without putting up a great deal of capital or sweat equity initially, you can always go with a lean startup/marketing mentality and put up a pre-order page or crowdfunding campaign with your concept to see who will buy it, just remember that those who buy or invest still expect you to deliver in a reasonable timeframe, so you better know how to execute. For entrepreneurs, sometimes to succeed, you may want to find an area to be a fast dog in a slow race, ie, where the incumbents haven’t kept up and the customers in that segment are already asking for something better. Alternatively, as mentioned earlier, you can go one of the safer, faster to market routes, which is to find a product or service that is already widely used and purchased, and tweak it just a bit to make it better. This is actually where most successful inventors and entrepreneurs make their money and increases your odds of success significantly.
Many of the celebrated entrepreneurs and inventors you read about in the news took significant risks at some point in their journey to achieve his or her dreams. While hearing their stories can be inspiring and no one should be afraid to chase the greatest version of themselves, creating something that no one has seen before is not the right road for everyone. Bringing new concepts to market can often be cost and time-prohibitive. To make them successful it’s also important to have strong barriers to entry from established patents and unique I.P., to specialized knowledge and talent or perhaps be a first mover with massive amounts of capital. In nearly any industry, disruptive new concepts can take a lot of work and marketing spend to break through the rest of the noise and educate buyers to collect a share of the market. So which types of innovation typically pay off? For new entrepreneurs hoping to make an impact, one of the best pieces of advice I can give is to listen to your gut and if you have a bigger-than-life idea that you can poke holes in 200 times, and still feel like it’s meant to be, then do your research, create a budget to develop and marketing the product. If you want to get out and build a big brand quickly, learn the best methods to raise capital and go do it quickly, before you run into changes in the market that could quickly dry up how much investment capital is being thrown around, but if you have a product or service that people will buy in any market, go build a plan that you can execute regardless of market variables and need for investment, and don’t forget that the simplest ideas often end up having the best odds of success.