Fabian Schonholz’s Blog

How does innovation happen? Not just in technology, but in general. I think that the question can be answered easily with the next three statements:

• Necessity is the mother of all inventions. We create it because there is a need.
• Build a better mouse trap. Paraphrasing Einstein: “I stand on the shoulders of giants”
• This is such a great idea! Somebody comes up with a completely novel idea, and as such, with a complete new problem to solve.

These statements however, deal with concepts in the abstract, and while some form of these happen in real life — we see them all the time: the internet, flip cap toothpaste tops and velcro — they do not directly deal with how to grow market share and revenue through innovation.

At some point in their life, companies experience a plateau in innovation. The idea mill dries up and nothing new comes out. This is not readily apparent as companies may be putting out new products, most of which will be leveraging existing ones, but not “creating” new ones. While I think this is not only a smart approach to “new” product development, but a MUST, regardless of the innovation problem, this approach has a limited life. You can not repurpose existing products forever without the introduction of new ones. It is similar to inbreeding. The reason I support repurposing existing products by morphing them, or combining a few of them together, is because this not only extends the shelf life of each product with the positive financial ramifications that the extension mean, but also, because it extends an ecosystem which users are familiar with and provides a launching board for new products that either extend the existing products, further complements them or completely changes them.

If the idea mill is dry, it needs to be wetted again. There are different ways to “wet” the idea mill and all include getting new blood. Probably the fastest is to acquire new companies, start-ups in particular, as they present either brand new technologies or better mouse traps. And yes, in some cases even new ideas altogether. The advantage of acquiring another company is that the “new” idea and the “new” product are developed, have some level of market traction and by it, an apparent lower barrier to entry. What remains is integrating into the existing product suite. This is easier said than done.

In some cases, a company is acquired not for the product, but for the people. The idea in general may not have much weight in the market, but the employees bring a tremendous potential and this is also a smart move, a possible good investment.

Another way to bring new blood is to hire new people. Yes, companies hire as a matter of course, but it is to increase throughput in existing projects or to alleviate resource constraints. The regular hiring process is not intended to rock the boat, but rather to steady the boat. This practice, in a way, contributes to the idea mill drying up. So, in the case of hiring new blood, some hand-picked hires MUST be chartered with rocking the boat and shaking things up. However, if you hire somebody in that capacity too soon, you risk tearing the organization apart. I have seen it happened and it is not pretty.

There are two cases I would like to explore: Google and Yahoo! (we could also look at Amazon, Microsoft, Apple and others, but for the sake of clarity let’s just look at these two.) Both companies have had a similar start and in a way, have had the same corporate development path. Before I go into it, I just want to also say that the following words are based on my observations as an outsider to both companies and as such are just my opinion (I wanted to say something else, but I am hardly self defacing )

It is not clear to me if Google is in a situation where the idea mill has dried up. On the one hand the indicators are there: acquiring companies and (based on rumors) copying other companies. On the other, acquiring these companies may be just part of expanding market share and protecting itself - the YouTube acquisition comes to mind - and for all we know, the gPhone and opening up the API set were part of the plan all along. More specifically about opening up the API set: Although the timing makes it seem as a response to Facebook, I have more faith in Google than that. I suspect the plan might have been accelerated due to Facebook. Furthermore, other rumors point to the fact that Google’s strategy is wider than we think, creating a great deal of fuel to power the idea mill. Now the question rests in execution and wheather Google is over extending itself.

In the case of Yahoo! I think the idea mill has been dried up for a while. Like Google, Yahoo! has been buying companies but has not been able to catch up to Google and the perception is that it is loosing ground to Facebook. It even seems to be falling behind new comers such as Facebook and MySpace. It is not that Yahoo! executives are not smart or intelligent, they are, but it may be that the culture of innovation might be dried as well and not just the idea mill. In this case, all the acquisitions will not be positively leveraged and/or integrated and instead of breathing new life, the new blood is creating more drag.

The following is an image I found on the web. It showcases the current M&A landscape which, in a way, also showcases how in the last few years companies not only have transformed themselves but also have gone about getting new blood and keeping the idea mill fresh:

Help me decide what to write about next. If you do not find what you would like, please add the topic in a comment.

Thank you.

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A little bit ago I came across an article that contained the following words. I am not sure if the presented scenario is true or not - I did not bother to verify - but regardless, it does present a few words of wisdom …

NOTE: This is true, please go to Professor Pausch’s blog.

Jeff Zaslow of the Wall Street Journal wrote about Professor Randy Paush’s last lecture and it’s worth quoting in full…

(For the actual lecture please go to TechCrunch post where the actual lecture is hosted)

Randy Pausch, a Carnegie Mellon University computer-science professor, was about to give a lecture Tuesday afternoon, but before he said a word, he received a standing ovation from 400 students and colleagues.
He motioned to them to sit down. “Make me earn it,” he said.

They had come to see him give what was billed as his “last lecture.” This is a common title for talks on college campuses today. Schools such as Stanford and the University of Alabama have mounted “Last Lecture Series,” in which top professors are asked to think deeply about what matters to them and to give hypothetical final talks. For the audience, the question to be mulled is this: What wisdom would we impart to the world if we knew it was our last chance?

It can be an intriguing hour, watching healthy professors consider their demise and ruminate over subjects dear to them. At the University of Northern Iowa, instructor Penny O’Connor recently titled her lecture “Get Over Yourself.” At Cornell, Ellis Hanson, who teaches a course titled “Desire,” spoke about sex and technology.

At Carnegie Mellon, however, Dr. Pausch’s speech was more than just an academic exercise. The 46-year-old father of three has pancreatic cancer and expects to live for just a few months. His lecture, using images on a giant screen, turned out to be a rollicking and riveting journey through the lessons of his life.

He began by showing his CT scans, revealing 10 tumors on his liver. But after that, he talked about living. If anyone expected him to be morose, he said, “I’m sorry to disappoint you.” He then dropped to the floor and did one-handed pushups.

Clicking through photos of himself as a boy, he talked about his childhood dreams: to win giant stuffed animals at carnivals, to walk in zero gravity, to design Disney rides, to write a World Book entry. By adulthood, he had achieved each goal. As proof, he had students carry out all the huge stuffed animals he’d won in his life, which he gave to audience members. After all, he doesn’t need them anymore.

He paid tribute to his techie background. “I’ve experienced a deathbed conversion,” he said, smiling. “I just bought a Macintosh.” Flashing his rejection letters on the screen, he talked about setbacks in his career, repeating: “Brick walls are there for a reason. They let us prove how badly we want things.” He encouraged us to be patient with others. “Wait long enough, and people will surprise and impress you.” After showing photos of his childhood bedroom, decorated with mathematical notations he’d drawn on the walls, he said: “If your kids want to paint their bedrooms, as a favor to me, let ’em do it.”

While displaying photos of his bosses and students over the years, he said that helping others fulfill their dreams is even more fun than achieving your own. He talked of requiring his students to create videogames without sex and violence. “You’d be surprised how many 19-year-old boys run out of ideas when you take those possibilities away,” he said, but they all rose to the challenge.

He also saluted his parents, who let him make his childhood bedroom his domain, even if his wall etchings hurt the home’s resale value. He knew his mom was proud of him when he got his Ph.D, he said, despite how she’d introduce him: “This is my son. He’s a doctor, but not the kind who helps people.”
He then spoke about his legacy. Considered one of the nation’s foremost teachers of videogame and virtual-reality technology, he helped develop “Alice,” a Carnegie Mellon software project that allows people to easily create 3-D animations. It had one million downloads in the past year, and usage is expected to soar.

“Like Moses, I get to see the Promised Land, but I don’t get to step foot in it,” Dr. Pausch said. “That’s OK. I will live on in Alice.”

Many people have given last speeches without realizing it. The day before he was killed, Martin Luther King Jr. spoke prophetically: “Like anybody, I would like to live a long life. Longevity has its place.” He talked of how he had seen the Promised Land, even though “I may not get there with you.”

Dr. Pausch’s lecture, in the same way, became a call to his colleagues and students to go on without him and do great things. But he was also addressing those closer to his heart.

Near the end of his talk, he had a cake brought out for his wife, whose birthday was the day before. As she cried and they embraced on stage, the audience sang “Happy Birthday,” many wiping away their own tears.

Dr. Pausch’s speech was taped so his children, ages 5, 2 and 1, can watch it when they’re older. His last words in his last lecture were simple: “This was for my kids.” Then those of us in the audience rose for one last standing ovation.

A few weeks ago I was playing with Facebook and I did not get it. I wrote the template for this post and called it “I Do Not Get Facebook”, because I truly did not get it and was not impressed with what they have done … what was the hoopla all about? But now I get it. It is very clever and they have a shot a beating Google at their own game, or at least giving them a run for their money: Online Operating Systems.

When I first read Facebook had opened up to external application development, I was not too impressed. After all Google had had APIs for a long time. And even before Google, I built for Pictage a system that allowed functionality to be exported to other websites, as well as for Hoodiny Entertainment Group. Actually for Hoodiny I designed and architected a system where other people could build entire applications and websites based on published functionality. So … again, what’s the big deal?

The big deal is not at the technical level but at the strategic level. Google’s entire strategy, it seems, is to provide an off-site application operating environment. Vis-a-vis an Operating System. Google does not just provide search, but provides spread-sheets, word processing, an ad network, email, video, social media, different content, maps, hybrid apps that require web connectivity and live half in the web and much much more. They are also bidding for the 700Mhz frequency for cellular communication and are in the process of laying cable to Australia. Moreover, there are rumors that Google wants to take over Sirius, the satellite radio provider - I do not think it is just an experimental platform for Google’s radio ad network, but there is more there than meets the eye.

Over all, Google is providing all the underpinnings and tools needed to have thinner clients. In other words, if Google provided you with all the business applications you will need as an individual and/or enterprise; if Google had all your data; if Google provided you with connectivity everywhere; if Google provided you with other public domain data or pay-for-access data (online books, reports, etc.), and everything else you needed, then … why would you need a full blown desktop? And why wouldn’t you have a more mobile platform for your personal and business use? The answer to that is simple: you absolutely would. Google is presenting to users the ultimate in SaaS (software as a service.)

There are other companies that are on the same track. Amazon being one of them, Microsoft too with Live, Yahoo! and definitely Facebook. But not all are at the same level of development and market penetration or even strategically looking toward the same goal.

As opposed to Google, Facebook took a different approach: “We are not going to build it but our partners will. We will just provide the platform, the traffic and the way to monetize it.” Or at least it seems that way. Google recently decided, based on some postings on the web, to take a similar approach. But by not being there first, they open up to risk. Let’s face it, Google is not a startup anymore and it will have a lag in responding to market needs or changes. Facebook remains more nimble and thus, can respond to market “demands” faster, but not necessarily better. Additionally, not being first to market does mean a lot, but, what is does not mean is that you are dealt out of it.

So … who will win?

I am not sure. I definitely get Facebook now. I get it A LOT. I still do not find much usability for the site myself, but the fact remains, they are doing the right things in my eyes, at least strategically. It is lacking an even basic office productivity suite like a word processor - at least that I can find - or a spread-sheet or presentation, but they have a solid foundation. Google on the other hand, if the rumors are true, is about to open up. The real question is: Facebook has had a great deal of adoption and with the fbFund they will be able to get some of the missing pieces … so … who is playing catch up? Google or Facebook?

In the last few years, Virtual Worlds (VW) have become more common place. It all started with Massive Online Multi-Player Games (MOMPG) and to a large extent, the virtual worlds are extensions of them. Second Life, Club Penguin, Toon Town, to name just a few, are gathering a following. But the questions really revolve around the business model and usability of these tools. And of course, how these environments can be used in the future.

There were a few posts on TechCrunch referring to this very topic and my comments to the posts were that I very strongly feel that VW will constitute a very strong eCommerce force and platform in the future. But also my comments alluded to the fact that the interfaces to these tools must change. It is not just about making them more fun or interactive, but more intuitive and efficient.

A while back I signed-up at Second Life and spent a couple of days - on and off - trying to figure out the system. Now, I am a very savvy computer user and normally do not need to read a manual to figure out how to use software or electronic equipment in expert mode or close to it. But Second Life presented a problem and I was just not interested enough to solve it. It was kind of cool, but the usability barriers got in the way of my interest.

A few weeks later the iPhone was released to the market, and of course I bought one. I had an epiphany and realized that it was a revolution. You do not have to agree or see it, but there is a revolution underway. Maybe not overt and maybe not conscious, but there is one. The revolution is about user interfaces. How humans interact with computers. I actually wrote a post about it (click here for the post) where I began, very superficially, to explore why the iPhone and now iPod Touch are ushering a new era in UIs.

As user friendly and intuitive as the iPhone interface is, it still has a keyboard. It should not and I think that is what Apple and other companies are trying to figure out. How to write without a keyboard. Yes, you can say “voice recognition”, but it is not the most efficient interface either. In other words, how would I write this blog if there was no keyboard. Besides writing, on the other hand, there are other activities we conduct on a computer, so, even if we could not find a way to express the written word without a keyboard, there are plenty of things we can do that do not require a keyboard.

So, very much like hardware manufacturers are trying to crack the keyboard-less computer nut, software producers should focus some attention on the problem too — specially when it comes to VWs. Yes yes yes yes … the hardware guys are doing it through software but since they also control the hardware they have a slightly different tool and problem set.

During 1996 and 1997 I worked for Disney Online. I was responsible for the registration and security system for a very ambitious project, a distributed desktop environment for kids. The idea was to create a sort of virtual world where kids could interact with each other to create communities where they could help each other with homework, for example, through avatars. The project never really reached any momentum and was abandoned, but the idea remained with me. This was just too early an idea for the time, but was the beginning of VWs.

What can you do in VWs? The answer is simple, anything you want. For real, anything. Yes, that too!! If you look at the MOMPGs and how users behave you will have the proof to my answer and my assertions of eCommerce. These games also present alternative economies that transfer to the real world. Some of us have heard or read stories about a virtual property in some game being bought for 1000’s of Dollars. Stories about offline transactions for online goods abound. Why could it not be the other way?

One thing is true, eCommerce keeps on growing, and the challenge is presentation. How do you present the good so you entice the user to buy. VWs can resolve that problem easily; say that you are selling cloths, why not have a virtual store in Second Life where you have 3D representations of your wears. If I had a true 3D representation of myself, then I could try online a particular item and pay with a virtual credit card, connected to my bank or real work credit card, and the item could be shipped to me. Similarly, since the 3D representation of myself is accurate, if the item needs to be tailored, the measurements can be taken also online; the modifications executed and then shipped to me.

The scenario above is doable and probably the low hanging fruit in a series of ideas. A silly example to illustrate how it could work.

There was a movie a while back, Disclosure, with Michael Douglas and Demi Moore. In the movie the interface to the VW was a visor, a globe and sort of multidirectional treadmill. The system showcased a virtual storage system where it was easy to find stored documents. In 1994, when the movie premiered, Yahoo!! and Google did not exist!! But the idea of search did. And why not a virtual search?

There are other applications beyond entertainment for VWs. The movie, or the online virtual store, or even doing homework, are short term ideas. But why not education, or medicine, or conferences, or even war? The sky is the limit, the real problem remains: What is the best interface?

My wife, for her birthday, wanted a video camera and since I am such a good husband I bought her one. I am into photography and never really thought about getting a video camera; moreover, most of the digital cameras we own have video capabilities that we never use. The rational for buying yet another camera was: (1) the wife wanted it and (2) I figured it would be fun to play with another media medium. So … I bought her a camera for her birthday.

Yesterday I videoed Jared’s soccer match and using iMovie HD put together a little movie. I had already done a short and quick clip of one of my fishing trips, but this time I was undertaking a much bigger task. I shot a bunch of short clips during the match and last night I imported them and put together the short video enclosed at the end of this post. I am now a filmmaker, albeit not a good one, but for my first time around, really, I would think not a bad effort. Ed Wood would be proud.

Movie making aside, technology has always caught me off guard and surprised me. Mind you that I make my living with technology and on a regular basis I am exposed to really advanced and new technologies. One of my trademarks is being an innovator, always staying as current as possible with bleeding edge technology and using those technologies to solve business problems. But iMovie HD is an application that comes bundled with every Mac; in other words, it is consumer grade software that works superbly on a stock computer. Anybody can now be a filmmaker and produce videos with some level of quality. Technology to some extent is being demystified.

What keeps on surprising me is the contrast that I have experienced in my career. For the last 25 years, actually a little more, I have seen a tremendous change. When I first started with computers I had an HP 41C programmable calculator. To this day I think that it was the greatest. I also had a Commodore 64 and access to an Apple II and then an Apple IIc. I also had access to ORT’s data center, which, the first year I had access to it, still used punch cards. The second year punch cards had gotten replaced. Nonetheless, the machinery used at that data center occupied half a floor and did not have that much computational power.

Fast forward 25+ years and I am writing this Blog entry on a MacBook Pro that has a gizillion more times computational power that the first data center I set foot in. Not only that, my kids, both have MacBooks and individually they have more computational power than those first data centers as well. Computing machines have evolved so much in the last 50 years. From computers that would occupy entire buildings used to perform ballistic calculations, to laptops solving problems way more complex problems than ballistic equations. You can always quote Moore’s law to me, but Moore’s law does not take into consideration the direction of the innovation.

On TechCrunch, last night, there was an article about the future of commerce. On the post it was reported that ICANN CEO Paul Twomey stated at a conference that virtual worlds are the future of global commerce. Virtual Worlds?? Amazing. I agree. Not only I agree, I am certain. But the problem is the interface semantics. The current interface semantics is wrong. Going back to Apple for a moment, what they are doing with the iPhone and iPod Touch is remarkable. They are not only introducing a new interface to the market, but I can guaranty you that they are coming up with a way to write this blog without a keyboard. Call it dictation or some other form. With their current devices they are experimenting with a change if semantics and paradigms. Eventually, somebody will fully figure it out and not only devices like the iPhone, but also Virtual Worlds will be more life changing than imagined before.

From computers taking entire buildings to house them, to iPhones, to Virtual Worlds. What an extraordinary trip. I wonder what the next 25 to 50 years will bring us.

My wife says my Blog is my pensieve; a place to collect my thoughts for storage so they do not occupy room in my mind. I do not agree. My Blog is a place to express myself. Because I write them down and “publish” them, it does not mean that I do not keep on thinking about them. Ideas and thoughts evolve as we gain new experiences. They remain ever present in my mind and when people provide feedback in the form of comments, thoughts may become more robust.

A lot of my thoughts and ideas evolve over time. Some of them get further refined. Other ideas get better support with new knowledge. Other still, are changed or completely discarded. What I think today is very different from what I thought 20 years ago. And in 20 more, my ideas will be somewhat or quite different. Thought can become obsolete.

My Blog is a place for exploration. Many of the subjects I write were not thoughts until I put the words down. I start with a title. Any title. Sometimes these titles come to me as I am writing. I take a little break, create a blank document, I write the title centered and in bold letters and save the file with the title as the filename. At some point I go back and complete the thought. Many other subjects are based on ideas I have had for a long time and writing them down is just a way to formalize them. “Why OpenSource?” is one such subject. Since 1994 I have been selecting OpenSource as my weapon of choice, so writing about it was just a formalization of what I have done for years.

My Blog is a place for sharing. Have a child, plant a tree and write a book. I have tried to write a book. I have children and have planted trees. But writing a book has proven difficult. So the blog will have to do as a stand in. I have always been very giving with my ideas. Not necessarily always a good thing, but since I believe in transparency, sharing my ideas is part of it. In many cases my own transparency has been used against me. It is just the price to pay for upholding certain ideals. Ideas that are not shared are ideas destined to die. I am not saying share your secrets. Secrets are thoughts that must not be shared.

My Blog is a place for self-promotion. In exposing my ideas I am saying: ”Look how good I am, how intelligent and sophisticated a thinker”. And on every post on every topic I am also saying: “Check out my grasp on the subject, look what I can do for you, look at what I bring to the table”. Why hide it, I am not a modest man. But the bravado of my youth has given way to the wisdom of age. I do not have to shout very loud anymore about these things, I show them with action. These writings are just but a small taste.

In the end, my Blog is for me. And yes, my wife is after all, right. This is indeed a repository of my ideas and expressions. It is a repository for my thoughts. It is definitely my pensieve and I can come back to it anytime I want and re-evaluate my ideas and thoughts.

You see … ideas evolve even in this short a time.