From time to time I turn to Warren Buffett and always come out refreshed. I find his letters to shareholders piercing and at the same time a sheer joy to read. In every letter,
What is a “moat”?
And what does “enduring” involve?
Classic example of this is Motorola. During 2004-2005, Motorola’s RAZR was synonymous with “innovation”. Ed Zander was the “innovation” hero. If you look at market share numbers, a drop by 2% or 3% may seem harmless for a giant like Motorola. But looks like it is enough for it to go into tailspin. Even after pumping in several billion dollars, it could not bring out another “disruptive innovation”.
It is interesting to see that something like “disruptive innovation” is cool from a technologist’s and strategist's perspective and the same thing is totally “uncool” from wise investor like Buffett’s perspective. Buffett is right, society needs all kinds of people.
It was interesting to read in TOI about how carpooling is catching up in Mumbai. The news said that Mumbai traffic police department along with a carpooling site has tied up with a private insurance firm, multiplexes and restaurants so that carpool members will get a discount on a variety of allied services. For example, you can avail of a 50% discount on cinema tickets at PVR multiplex outlets and free Pepsi and pop corn during intervals besides a 20% discount on beverages and food at all Cafe Coffee Day outlets, plans are now afoot to provide a discount for the car insurance premium for carpoolers. Carpoolmumbai.com has got 1700 members and 560 groups who are using the site individually or as part of sharing group within a 70-80 km distance in the city and suburbs. 40% of the carpool users are working women who have a harrowing time traveling. But
We can see that a number of interesting factors have come together in the process:
Will it really catch on? I hope it does but you can’t be sure about it yet. It will take at least a couple of years before one can say for sure.Can this be replicated in a city like
The discontinuity that Peter talks about could be a change in society, knowledge, culture, industry or economic structure. However, when you recognize the pattern, it introduces a new perception of the world. The challenge lies in recognizing the pattern. Both types of innovation are essential, latter is perhaps a riskier approach. Let’s see if we can identify these approaches in what we know.
I feel that Nano (Tata Motors’ Rs. 1 Lakh car) belongs to the first category (anticipation of future that has already happened) while Reva (a leading electric car) belongs to the second category (making the future happen). Let me elaborate.
Reva is the leading electric car in the world. It has been in production for since 2001 and around 2000 cars have been sold worldwide (see news). In 2006 it went through another round of funding for its expansion. Deputy Chairman of Reva, Mr. Chetan Maini says that they are hoping to sell 30,000 cars in 2008. It is priced more than three times Nano and is appealing to people who are environment conscious. Reva has won a number of innovation awards and I was myself thoroughly impressed by the talk Chetan gave at Innovation Summit in 2005. Having said that I see it as an uphill task to “cross the chasm”. Where are the electric charging stations? It takes 2.5 hrs to charge upto 80%. However, innovations like these do play a role in shaping the future.
Nano, on the other hand, is trying to capitalize on the discontinuity which has already occurred. There are a bunch of 2 and 3 wheeler owners who would love to buy a car if it is priced around Rs.1 Lakh. Observing this segment (which is non-car market) and creating a product which fulfils their need at an attractive price is where the beauty of Nano lies.
The objective is not to say one innovation is better than the other. It is to share an observation that these two innovations are of different kind.
One question that keeps popping up in my workshops on technical leadership is, “What is an engineering mindset?” In an earlier blog, compiler architect Ayonam Ray talked about having an engineering mindset as a pre-requisite to becoming a successful technical leader.
Well, let’s take this question one step further and ask, “How does a super-engineer think and work? What sort of environment creates a super-engineer?” Perhaps there is no one answer to questions like these. But then, you come across a book like iWoz which goes into details to explain how a revolution came about from an engineer’s perspective and you say, “Wow” or perhaps “iWow”.
iWoz is an autobiography of Steve Wozniak, inventor of Apple I and Apple II (first commercial desktop personal computers) and co-founder of Apple. Here are some of the gems from iWoz:
1. Habit of “building” things: Right from age six, Steve got into a habit of building things. His dad had what he calls “my single greatest influence”. At age six, his dad got him a radio kit and he built “crystal radio kit”. The whole book is about how Steve kept building one thing after another, e.g. tic-tac-toe, ham radio transmitter & receiver, flashlight, carbon rod project, periodic table demonstration, TV jammer, Cream Soda computer and so on. It goes on to show how important it is to “build” things rather than just study to shape an engineering mind.
2. Patience & “One step at a time” mantra: Steve says, “Having a huge project is a huge part of learning engineering – learning anything probably. Doing long, long jobs that aren’t just some real simple quick thing like a flashlight, but things that take weeks to build, really demonstrates that you have mastered something great. I learned not to worry so much about the outcome but to concentrate on the step I was on and to try to do it as perfectly as I could when I was doing it” Then he goes on to caution today’s kids “Not everyone gets this in today’s engineering community you know. Throughout my career at Apple and other places, I always find a lot of geeks who try to reach levels without doing the in-between ones first, and it won’t work. It never does. I kept telling them, like a mantra: one step at a time.”
3. Power of vision & role of network: Seeing a vision about end-to-end solution is a sign about maturing as an engineer. Steve describes his first vision when he visited a bowling alley and played with a video game called “Pong” (produced by Atari). He says, “I stood there awhile and started at it and said, I could design one of these” Such powerful visions keep repeating throughout the book as end-to-end solution would flash in front of Steve. The most powerful vision, of course, was that of a desktop personal computer and it was flashed on the night he visited a “Homebrew Computer Club”, a club of geeky technology buffs who had a goal of bringing computer technology within the range of the average person. Steve recalls, “I was scared, but I showed up (for the first meeting). And you know what? That decision changed everything. That night turned out to be one of the most important nights of my life”. This demonstrates the power of an informal network.
4. Role of “angel investor”: We keep hearing about “angel investors” and the role they play in “innovation eco-system”. Apple certainly had a real “angel” in its destiny. Mike Markkula was only thirty and had already retired from Intel. Steve says, “I had always thought of the Apple computer as being something for a hobbyist who wanted to solve a work simulation or play a game. But Mike was talking about something different. He talked about introducing the computer to regular people in regular homes, doing at home things like keeping a track of your favorite recipes or balancing your checkbook.” When Mike agreed to sign up, he told them, “We are going to be a Fortune 500 company in 2 years. This is the start of an industry. It happens once a decade”. Boy, was Mike right?