Category Archives: Disruptive Innovation

Pay. Mobile Payment will grow fast this time. (Updated Oct. 29th)

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Apple Pay was introduced this week and just like with the Apple Watch it is receiving much attention, not all from believers. Google Wallet has been around for since 2011 and has been available in many locations. Why they have not promoted it much more, I will never understand. It allows for a typical Apple late entry approach that will in my mind make true mobile payment finally come true.



Why will Apple Pay work? Why will Apple Pay help accelerate mobile payment adaptation? A few key reasons:

  • Even though the Google Wallet app has been downloaded on many Android phones it is not as easy to use. Apple Pay is build on a very robust platform and is very easy to use. With new iPhone 6 volume building quickly it will gain momentum quickly.
  • I think they have been very clever to announce it at the same time as the Apple Watch. With the Apple Watch it will be even more easy to use since you just raise your arm.
  • Apple has also a very good track record building networks of companies that will support it. Their first wave of banks and stores is already a good start. Stores will benefit by moving consumers through their lines quicker.
  • They will have learned from the under promotion by Google and will advertise with their launch partners. Their partners have more incentives this time and they have already started.
  • Apple Pay is easier to use than a credit card, even though credit cards are also easy to use.  However, the recent credit card data hacking events have put the spotlight on privacy and security issues for the the consumer.  The Apple Pay system is more secure then credit cards (no paperwork, no data is shared with the vendor, nobody else can use it.) which will be a key educational message that consumers will more easily consider than before.
  • Apple will not have access to purchase information and does not store transaction data. They are making this a key differentiator with Google Wallet since Google is not clear what their intentions are in the long term with transaction data.

Many hurdles are still in place that need to be overcome. (The interesting aspect of the Apple Pay launch will be that Google Wallet will benefit significantly as well so maybe Google will need to thank arch rival Apple for taking the plunge). Apple Pay’s success will be based on easy of use and it must be more secure than other options. Early indications are they have succeeded with easy of use, which will only increase when the Apple Watch comes out. Mobile payment will finally become mainstream in the next 3 years and companies need to be ready for it.

UPDATE:  October 29, 2014

The Apple Pay launch has been a success with users registering more than 1 million credit cards on Apple Pay in the first 72 hours last week, making it the most widely used contactless payment system available. At the same time, the battle for mobile payment dominance has increased with CVS and Rite Aid deciding to pull their support for Apple Pay. They will support the system from Merchant Customer Exchange called CurrentC which is expect to go live in 2015. They were consistent and also blocked Google Wallet. CurrentC will work very differently and is not expected to be as user friendly as Apple Pay or Google Wallet. In addition, merchants will have access to your shopping data since the data will be stored which Apple Pay will not do. Privacy concerns and easy of use will give the upper hand to Apple and will hurt merchants over time. There will be many stages in this battle that has just began.

We know the dangers of disruption so why are we fighting it?

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Excerpts of an article by  in 

October 7th, 2014

So the real question is, why are so many companies not taking the right steps – why are they resisting? Peter Sondergard’s, global head of research for Gartner, answer is simple. “The new digital businesses have lower margins.” Given that, today’s businesses have a difficult challenge. Do they take short term and potentially massive pain and bet on a larger market share with far lower margins. Or do they soldier on believing that somehow they will defy the odds?

There is a second and compelling reason why companies are hesitating to do what they know is inevitable. Digital businesses are different. A digital business may be agile, but to do that it will take risks. Digital businesses are not afraid of failure and risk taking. Yet the mainstay of the enterprise in so many companies from banking to retail to government to manufacturing to natural resources – all of these need “rock solid systems and processing.” When the consequence stoppage in production runs into the millions of dollars, it’s hard to accept failure.

Digital machinists versus digital humanists

Gartner sees this as a conflict between two mind-sets. The “digital machinists” represent the old enterprise with its need for uninterrupted operation and “rock solid” processes. The new thinking of the “digital humanists” runs counter to everything that the “digital machinists” think.

“Digital humanists” are driven by principles not processes. These principles, Sondergard outlined as:

  • People – at the centre of all actions is a concern for human beings and a focus on the user/customer experience.
  • Embracing the unpredictable – where machinists try to control deviations from the norm, humanists exploit these to learn and explore new ways of performing services.
  • Respect for personal space – or in the words of another analyst, humanists don’t do things that are “creepy.”

The challenge of the bi-modal enterprise

Who is right? According to Sondergard, they both are. Companies need the rock solid business processes to exploit current business opportunities but they also need to embrace the humanist ideals to avoid disruption by agile competitors. They need to be bi-modal.  A traditional enterprise may not be able to instantly transform into a start-up, but we can all incubate start-ups within our existing enterprises.

Leading companies get this and are embracing these moves to a new digital first approach on new businesses and services while they defend but gradually scale back their traditional business.

The digital transformation

As Sondergard pointed out, it’s not just businesses that are changing. Technology is changing us as well. There is a power shift happening as we move from physical to digital enterprises. Power is moving from corporation to customer. In enterprise technology, it is moving from structured IT departments and processes to business leaders. It is shifting from enterprise to employee. At every level, power is moving from its existing base to new distributed, decentralize but no longer “de-personalized” model.

As technological change accelerates, it accelerates the power shift to the new “digital humanists.”

The Internet of everything

If you had to look to find one current trend that would show the pace and extent of change, you need look no further than what has been termed the “Internet of everything.” Cisco Systems product marketing manager Beth Barach presented on this topic during the 2014 Gartner Symposium in Orlando.

For those who wondered what the difference was between the Internet of everything (IoE) and the Internet of things (IoT), Barach gave an elegantly simple answer. The Internet of everything is, as the name implies – everything. It is people, process, data and “things.” But the “things” are special. They are not just the devices, they are the sensors that supply the data. In turn, that data runs more and more of our day to day world – transit, homes, office buildings, infrastructures and even our cars – just to name a few areas.

These “things” operate our world and provide the data that controls that world. This is how we benefit from the Internet of everything. The “things’ give us the data and the data drives the rest.

A blessing and a threat

The dirty little secret is about these “things” is that that as they assume more and more control of our businesses and our day to day lives, they also present more and more of a risk. And as they grow in numbers the threat becomes even greater. The more of these devices that exist, the more likely it is that they will be compromised. On a recent TV show, a fictional plot showed a pacemaker being hacked. Gartner estimates in a few years this will be a reality.

Businesses know this too. Cisco’s Barach showed us that 73 per cent of companies expect IoT to cause security threats. Yet by the same data, only 13 per cent of companies feel they are addressing this challenge.

Is it a technical problem? No. It’s a mind-set problem. Like the “digital machinist” and the “digital human” there two distinct mind sets at work – the Information Technologist (IT) and the Operational Technologist (OT) The OT mindset actively pursues the benefits of a proliferation of devices and sensors. The IT mindset sees and tries to mitigate the risks and return the company to the certainty of “rock solid” processes. The OT mindset has no time for this.

The reality is that they are both right in their own respect. According to Cisco’s Barach both are critical to organization success. There is no technological miracle – few if any of these devices and sensors have any security built in. What is needed is a cooperative approach to solve this contradiction – how do you collaborate to build “rock solid” security and still have the agility and ability to harness learning and the “power of serendipity” which is such a part of the digital enterprise?

How to do it in real terms

As Gartner analyst Frank Buytendijk pointed out, this way of thinking is not new. Jim Collins, the guru of modern strategy has said that successful companies had to escape the tyranny of or and embrace the possibility of and.  The only problem, Buytendijk pointed out is that Collins didn’t tell us how to do it.

Two presentations at the Gartner Symposium tackled this in real terms. The first session, led by Richard Hunter another senior Gartner analyst, looked at scenario planning as a way to do strategic planning in a time of uncertainty and ambiguity.

Traditional strategic planning requires that you determine and place a bet on a future state or environment. This works well if the future is predictable and stable, which we have discovered, it is not. Scenario planning invites us to embrace this uncertainty and imagine several futures. Each will have its own strategy to address it. Each will have a series of leading metrics to tell you in advance if that strategy needs to be employed. It’s a very flexible and for those who do it well – a very practical and reliable method of strategic planning and response.  In fact, the only real way to “fail” at scenario planning is to be too timid. Failure in this is failure of imagination. Because as Hunter says, “if you are imagining a vastly different future, you’ve probably got it wrong.”

The future is wilder and more unpredictable than we think. One analyst gave an example using the film “Minority Report” with Tom Cruise. In the film, Cruise manipulates a 3D computer interface in mid-air. In 2002 that was astonishing. Today, the parts to make that interface, according this same analyst, would cost $70. If we fail to vividly imagine the future – if it doesn’t seem like we are really pushing the envelope, in this age of rapid change, we are likely to underestimate the degree of future change. The failure of scenario planning is the failure of our imagination.

The failure of analysis

Failure of our analytical minds to imagine the real scope and complexity of change is an issue. Frank Buytendijk showed that we “analyze too much and synthesize too little.”

The bottom line is this: analysis focuses on our differences. Synthesis focuses on what makes us the same. We need to stop thinking in terms of “either-or” and differences and to embrace the digital idea of “and” – of synthesis. In a time of change and of great ambiguity this is where the great ideas are born and nurtured.


Four terms that resonate:

  • Uncertainty.
  • Bimodal thinking.
  • Synthesis.
  • Digital.

Master these.


Google picks up incredible visual translation app Word Lens and makes it free

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By  in TechRepublic
May 20, 2014
Word Lens
 Image credit: Apple


Back in 2010, a company called Quest Visual debuted a little app called Word Lens. It scarcely seemed possible, but the app translated a number of different languages in real time using just the smartphone’s camera. When traveling in a foreign country, Word Lens users would simply hold the phone up to a sign and the camera would immediately translate it.

Currently, users can translate between English and Portuguese, German, Italian, French, Russian, and Spanish.

It’s easy to see why Google would want to own it — its stated mission is to make all the world’s information searchable in any language — and Google Translate generally does this quite well, at least for web pages.

With Word Lens, iPhone users can translate the world. Apple even featured the app in its recent “Powerful” television ad for the iPhone 5s, and it’s obvious why.

Even better, it doesn’t require a connection to the internet, which is another benefit for business travelers.

Word Lens isn’t perfect. It has trouble with particularly stylized text or handwriting, and the translations will make occasional mistakes. However, most of the time, it will at least get the point across.

No financial terms on the acquisition, which was announced on Quest Visual’s website, were disclosed. Neither company shared details on what the future holds for Word Lens either, other than the website saying that the app and language packs would be “free to download for a limited time,” while the Quest Visual team transitions to Google. Individual language packs previously cost $3 each.

Quest Visual

 Image credit: Quest Visual

The app itself is free to download from the App Store for both the iPhone and iPad, and I couldn’t recommend it more highly. The translations are available via an in-app purchase, though they are currently free. It’s also available on the Google Play Store for Android users.

Because we don’t know how long Word Lens will remain on the stores, I recommend that you pick it up as soon as possible, particularly if you travel internationally.

Word Lens is truly one of the killer apps for mobile, and it should be a staple on every phone. Here’s hoping that Google keeps it around in some form or another and doesn’t kill it off.

What about you? Do you have a situation where you used — or should have used — Word Lens? Let us know in the comments below.


On-Demand Services are changing industries.

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Condensed from Steve Schlafman’s blog dates May 4, 2014.

In the pre-mobile era we had to search yellow pages (or google), find a provider, call  or email that provider, wait to connect with someone, schedule a convenient time, hope the provider arrives on time, and then pay with a credit card or cash.  Thankfully, a new array of mobile services removes all of that friction we were used to experiencing. Welcome to the uberification of our service economy: 

The U.S. economy is largely driven by the service sector so it’s only a matter of time until all of our services are accessible via our mobile devices.  The implications are huge for large companies like Google and Craigslist as well as thousands of regional and local service providers.  Hundreds of billions of dollars of enterprise value are up for grabs.  As you can see from the market map, we now have on demand services for: 





Apps are emerging in categories like elderly care, medicine, real estate, and security. Additionally, there are a variety of B2B services emerging such as office cleaning, supply replenishment, tech support, and fleet management. All industries at some stage will feel the impact of on-demand services.

Staying Relevant? As smartwatches explode, where are the watchmakers?

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Between Google Glass, Samsung’s Dick Tracy watches, FitBit and Nike fitness trackers and Apple’s long-rumored iWatch, wearable technology is clearly the next big thing – a $19 billion market by 2018, according to Juniper Research.

For the geek crowd, the conversation is no longer whether consumers will embrace it, but which brand they’ll be wearing: Does Samsung make my butt look big? Does Google Glass go with my shirt?

But what’s striking about the list of companies dominating the wearable landscape is that most are fairly new to the space. Where are all the companies that have been creating watches, glasses and the like for generations?

“We have all the know-how but we don’t want to build up stock of technology bombs people won’t want to buy,” Swatch CEO Nick Hayek told Reuters recently, brushing off the threat of smartwatches. Indeed, Hayek called it a gateway to more traditional watch sales.

‘We don’t want to build up stock of technology bombs people won’t want to buy.’- Swatch CEO Nick Hayek

“If people who never used to wear anything on their wrist start wearing a so-called smartwatch,” he said, “then we certainly can convince them quickly to try wearing a beautiful watch instead.”

Swatch knows a thing or two about “technology bombs.” In 2004, the Swiss watchmaker joined forces with Microsoft for the unfortunately named Paparazzi “smart watch” (this was back before we were savvy enough to combine the terms into a single, handy word).

The device was big and expensive, and it suffered from the hangups we’ve come to expect from tech products released before their time. And it wasn’t alone.

Other watchmakers told they were also into the tech well ahead of the current boom.

“Since 2011, [we’ve] provided consumers with Bluetooth-enabled timepieces that sync to a smartphone to get email/call alerts, control music and set alarms,” Casio vice president David Johnson said in an e-mail.

The company’s Sports Gear STB-1000 was one a handful of smartwatches announced in January that was actually created by a watch manufacturer.

But Casio never uses the term “smartwatch” in its press materials, and indeed, the device may be more correctly a digital watch with smart features. It pairs with an iPhone to receive notifications and track your activity, but those seeking the app capabilities of a Pebble or Samsung Galaxy Gear will almost certainly be disappointed.

“What truly sets Casio apart in this category is its history as a watch manufacturer,” Johnson said. “The STB-1000 is not a response to what the other manufacturers are introducing; it’s simply the latest launch within our Bluetooth LE series of watches.”

Timex had a similar response when asked how it planned to counter the smartwatch surge, insisting that the company “will continue to be at the forefront of watch technology – as it has been for 160 years.”

Michèle Szynal, a spokeswoman for the Dutch watchmaker, pointed to existing features like fitness tracking as evidence of Timex’s focus on tech, and she advised us to “stay tuned” for future announcements.

Rolex declined to participate in this story.

Rather than simply playing catch-up with gadgets from Samsung, Pebble and the like, watch and smartphone manufacturers have arrived at similar functionality from two different approaches.

Over the years, the Casios and Swatches of the world have slowly added new technologies to their arsenals, arriving at more robust versions of what we’ve traditionally come to think of as a digital watch.

On the other side are companies employing full-color displays and powerful processors developed for the smartphone revolution. The result has been smartwatches that are more akin to tiny phones than Casios.

Some of traditional watchmakers’ reluctance to embrace a more smartphone-like approach can likely be chalked up to the fact that, for a number of them, the smartwatch craze carries a sense of deja vu. After all, the year before Swatch and Microsoft unleashed the Paparazzi on the world, Fossil harnessed the Palm operating system for a wrist-worn PDA that suffered a number of the same problems.

This time out, though, consumers appear ready to wear their computers on their wrists. In the past week, Pebble – that plucky little crowdfunded startup – revealed that it has sold an impressive 400,000 units, while Google announced its Android Wear smartwatch initiative, which will likely further interest in the space from big gadget manufacturers like Motorola.

And, of course, all signs point to a smartwatch from Apple. And if there’s one thing Apple’s good at, it’s bringing marginal hardware categories into the mainstream. Can you see iPod, iPhone, iPad?

Will watch manufacturers continue to play it safe as smartphone makers eat into their market share? Or will they embrace growing public interest and take another shot at the smartwatch space? As Timex told us, we’ll have to “stay tuned.”

Time will tell.

Augmented Reality Finally Starts to Gain Traction

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Wall Street Journal- Technology

March 3, 2014

Tech start-ups like Blippar, Layar and Daqri are testing new marketing features enabled by consumer mobile devices. They’re using augmented reality technology that enables a smartphone or tablet to recognize real live objects and then activate video or graphics that relate to the object. Katherine Rosman reports.

Augmented reality—a technology that enables mobile devices to recognize live objects and then activate video or graphics—has been stuck for years in new-tech purgatory, where ideas loll in the hope of finding mainstream applications.

That may be changing, at least in the eyes of marketers, print publishers and retailers, who are testing new ways to promote their brands on ever-present mobile devices.

Startups like Blippar, Layar and Daqri are beginning to make inroads, offering technology that lets people point their smartphones or tablets at objects—whether a can of soda, a magazine cover or an in-store display—and then watch video or high-tech graphics unfurl on top of the objects on screen.

AR remains clunky at times, and there is little research showing that layered content translates to sales and customer loyalty. Many advertisers are reluctant to talk, out of concern for revealing their strategy. But the mass adoption of smartphones and tablets and the promise of wearable devices is helping spur interest in the technology.

Augmented-reality apps, such as this one from Daqri, use a mobile device’s camera to scan objects and activate interactive graphics. Parker Eshelman/The Wall Street Journal

Sometimes referred to as “interactive print,” AR is finding its greatest consumer-market ally in the print magazine industry. Some AR programs activate content on tablets that can be viewed only as long as the device hovers over certain print, making the print an essential element of the experience.

In publications like Elle, readers can focus a tablet on a film review and watch as the movie’s promotional trailer begins to play on the device’s screen. When an AR-enabled app from Maxim magazine zeroes in on the magazine’s cover model, a video from the photo shoot begins to play. An interactive ad from CoverGirl in the March issue of Cosmopolitan magazine allows readers to “try on” a makeup product via an AR app to find the right shade. The makeup can then be purchased directly through the app.

“Consumers are increasingly using their phones to navigate the physical world, and magazines are a part of that,” says David Carey, the president of Hearst Magazines which publishes Cosmo, Elle and Esquire, each page of which is interactive.

Some advertisers also see promise in AR, saying the technology has the ability to captivate people with products and compel them to watch branded content intently. Consumer brands like Heinz and Pepsi PEP +1.67% have worked with Blippar to test the apps on their products.

Using the Blippar app, a consumer can point a mobile device at one of 20 million cans of Pepsi, PepsiCo Inc.’s flagship product, and unlock interactive content from the National Football League, including recipes and a ticket sweepstakes for next year’s Super Bowl.

But industry analysts caution that AR’s success depends on people finding it easy to use and recognizing value in interacting with videos and graphics. “If the content isn’t brining additional value, then mainstream consumers [aren’t] going to use it twice,” says Tuong Nguyen, a principal with research firm Gartner.

Mr. Nyuygen says he expects great growth in the industrial realm, where AR can sometimes help mechanics fix equipment and warehouse operators find and keep track of inventory. “If something makes someone’s job easier,” he says, “the adoption will be quick.”

AR companies are trying to make it easier for creative executives to make the sort of content that will grab consumers. In the past few weeks, both Daqri and Blippar have released products that can be licensed directly by brands and advertising agencies to build and activate their own AR experiences. Layar has had such a product on the market for nearly two years.

For more innovative campaigns, brands are working directly with the technology companies. For the North American International Auto Show in Detroit earlier this year, Ford Motor Co. F +1.12% debuted its first AR experience to promote its vehicles.

Attendees were prompted to download a special “Ford 4D” app and to look through the app at a graphic affixed to the cars. The app recognized the graphic and launched imagery on the smartphone that made the car appear as though it was coming off the screen in real-life dimension. For the Escape sport-utility vehicle, users could swipe the screen to open the back of the vehicle and activate a virtual version of it filling up with simulated animated soccer balls.

Ford has used the 4D display at subsequent auto shows in Toronto and Washington, and plans to do so again at the auto show in New York in April, says David Tillapaugh, its auto-show operations manager. Mr. Tillapaugh said it is too early to tell if more consumers chose Ford for having interacted with the cars in 4D, and he declined to cite the cost of the promotion. But he says consumers at the auto shows have been very engaged with the 4D display. “It has a lot of stickiness,” he says.

Ford’s 4D experience was created by Daqri, a Los Angeles company founded in 2010 by Brian Mullins, a graduate of the U.S. Merchant Marine Academy who later worked for the U.S. Transportation Department to help develop technology to help aircraft carriers float into docks seamlessly.

Last month, 325 representatives of more than 200 companies attended a two-day convention at Daqri’s headquarters to learn more about technology Daqri is building for universities, manufacturers and entertainment companies.

The marketing of a marketing product is a focus of all AR companies because the success of the technology’s adoption hinges on brands helping to promote the campaign. Last December, Kohl’s Corp. promoted holiday items on an AR-enabled seven-page ad that unfolded from the cover of Food Network Magazine. But nowhere on the ad were consumers told to download an app and hover it over the print ad to experience multimedia features.

Lisa Hu, a spokesperson for Blippar, says “user education” is paramount in building campaigns, as some companies may already have created the ads before making them interactive or limit the space needed for instructions.

Consumer brands experimenting with AR are reluctant to discuss if the technology is helping to increase sales. Matthew Szymczyk, chief executive of Zugara, a virtual dressing-room technology that is AR-powered and aims to help digital fashion shoppers, says the technology is too young to judge its efficacy.

“Some people say AR is a gimmick, but social media was initially considered a gimmick too,” he says.


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From March 14 issue of Fast Company by Jon Gertner



Thanks to the customizable nature of LEDs, they can provide better light where it’s needed–­helping pedestrians and drivers navigate sidewalks or twisting roads. 
Unlike incandescent bulbs, LEDs will last decades–many are rated for lives of 20 or 22 years. The bulbs use a fraction of the energy of older technologies, which means they’ll have a profound impact on carbon dioxide emissions. 

Based on Philips’s research in Europe, LEDs can be set to wavelengths that appear to measurably improve education environments. The lights can boost concentration or alertness, or aid in relaxation.

Specific light recipes have been shown to speed patient-recovery times in hospitals. Meanwhile, new home medical devices are reaching the market in Europe that utilize intense blue LED lights to ease back pain. 

Due to their digital and connectable nature, LED bulbs–such as Philips’s Hue–can be accessed and controlled from anywhere there’s an Internet connection, via a smartphone app. 

In horticulture, plants respond differently to various light wavelengths. Tailoring the output of LEDs for greenhouse growing has already been shown to increase crop yields. 
LED lights fitted with sensors can automatically know how much illumination is needed, and where it should be directed. The lights will adjust to a crowded party or to a dark ­parking garage. 

Allowing employees to create personal lighting environments that vary in color and intensity could boost job satisfaction and (quite possibly) productivity.

The Internet Of Things Is More Like The Industrial Revolution Than The Digital Revolution

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Key Points:
  • As the Internet subsumes physical objects, the rate of change is accelerating.
  • Stogdill believes these converging phenomena have put us on the cusp of a transformation as dramatic as the Industrial Revolution.“Everyone will be affected by this collision of hardware and software, by the merging of the virtual and real,” he says.
  • “Everyone will be affected by this collision of hardware and software, by the merging of the virtual and real,” he says. “It’s really a watershed moment in technology and culture. We’re at one of those tipping points of history again, where everything shifts to a different reality.
  • Data will literally grow physical appendages, and inform industrial production and public services in extremely powerful and efficient ways.
Forbes 2/10/2014

How The Internet Of Things Is More Like The Industrial Revolution Than The Digital Revolution

By Glen Martin

Philadelphia’s Centennial Exposition of 1876 was America’s first World’s Fair, and was ostensibly held to mark the nation’s 100th birthday. But it heralded the future as much as it celebrated the past, showcasing the country’s strongest suit: technology.

The centerpiece of the Expo was a gigantic Corliss engine, the apotheosis of 40 years of steam technology. Thirty percent more efficient than standard steam engines of the day, it powered virtually every industrial exhibit at the exposition via a maze of belts, pulleys, and shafts. Visitors were stunned that the gigantic apparatus was supervised by a single attendant, who spent much of his time reading newspapers.

“This exposition was attended by 10 million people at a time when travel was slow and difficult, and it changed the world,” observes Jim Stogdill, general manager of Radar at O’Reilly Media, and general manager of O’Reilly’s upcoming Internet-of-Things-related conference, Solid.

“Think of a farm boy from Kansas looking at that Corliss engine, seeing what it could do, thinking of what was possible,” Stogdill continues. “When he left the exposition, he was a different person. He understood what the technology he saw meant to his own work and life.”

The 1876 exposition didn’t mark the beginning of the Industrial Revolution, says Stogdill. Rather, it signaled its fruition, its point of critical mass. It was the nexus where everything — advanced steam technology, mass production, railroads, telegraphy — merged.

“It foreshadowed the near future, when the Industrial Revolution led to the rapid transformation of society, culturally as well as economically. More than 10,000 patents followed the exposition, and it accelerated the global adoption of the ‘American System of Manufacture.’ The world was never the same after that.”

In terms of the Internet of Things, we have reached that same point of critical mass. In fact, the present moment is more similar to 1876 than to more recent digital disruptions, Stogdill argues. “It’s not just the sheer physicality of this stuff,” he says. “It is also the breadth and speed of the change bearing down on us.”

While the Internet changed everything, says Stogdill, “its changes came in waves, with scientists and alpha geeks affected first, followed by the early adopters who clamored to try it. It wash’t until the Internet was ubiquitous that every Kansas farm boy went online. That 1876 Kansas farm boy may not have foreseen every innovation the Industrial Revolution would bring, but he knew — whether he liked it or not — that his world was changing.”

As the Internet subsumes physical objects, the rate of change is accelerating, observes Stogdill. “Today, stable wireless platforms, standardized software interface components and cheap, widely available sensors have made the connection of virtually every device — from coffee pots to cars — not only possible; they have made it certain.”

“Internet of Things” is now widely used to describe this latest permutation of digital technology; indeed, “overused” may be a more apt description. It teeters on the knife-edge of cliché. “The term is clunky,” Stogdill acknowledges, “but the buzz for the underlying concepts is deserved.”

Stogdill is quick to point out that this “Internet of Everything” goes far beyond the development of new consumer products. Open source hardware and software already are allowing the easy integration of programatic interfaces with everything from weather stations to locomotives. Large, complicated systems — water delivery infrastructure, power plants, sewage treatment plants, office buildings — will be made intelligent by these software and sensor packages, allowing real-time control and exquisitely efficient operation. Manufacturing has been made frictionless, development costs are plunging, and new manufacturing-as-a-service frameworks will create new business models and drive factory production costs down and production up.

“When the digital age began accelerating,” Stogdill explains, “Nicholas Negroponte observed that the world was moving from atoms to bits — that is, the high-value economic sectors were transforming from industrial production to aggregating information.”

“I see the Internet of Everything as the next step,” he says. ”We won’t be moving back to atoms, but we’ll be combining atoms and bits, merging software and hardware. Data will literally grow physical appendages, and inform industrial production and public services in extremely powerful and efficient ways. Power plants will adjust production according to real-time demand, traffic will smooth out as driverless cars become commonplace. We’ll be able to track air and water pollution to an unprecedented degree. Buildings will not only monitor their environmental conditions for maximum comfort and energy efficiency, they’ll be able to adjust energy consumption so it corresponds to electricity availability from sustainable sources.”

Stogdill believes these converging phenomena have put us on the cusp of a transformation as dramatic as the Industrial Revolution.

“Everyone will be affected by this collision of hardware and software, by the merging of the virtual and real,” he says. “It’s really a watershed moment in technology and culture. We’re at one of those tipping points of history again, where everything shifts to a different reality. That’s what the 1876 exposition was all about. It’s one thing to read about the exposition’s Corliss engine, but it would’ve been a wholly different experience to stand in that exhibit hall and see, feel, and hear its 1,400 horsepower at work, driving thousands of machines. It is that sensory experience that we intend to capture with Solid. When people look back in 150 years, we think they could well say, ‘This is when they got it. This is when they understood.’”

This post originally appeared on O’Reilly Radar. (“More 1876 than 1995”).

On-line reviews are causing the Twilight of the Brands

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Key Points:

  • Brands have never been more fragile. What has really weakened the power of brands is the Internet, which has given ordinary consumers easy access to expert reviews, user reviews, and detailed product data, in an array of categories.
  • A recent PricewaterhouseCoopers study found that eighty per cent of consumers look at online reviews before making major purchases.
  • Upstarts now find it easier to compete with the big boys.
  • The positive, if you build a better mousetrap, people will soon know about it.


The New Yorker by February 17, 2014

Twelve months ago, Lululemon Athletica was one of the hottest brands in the world. Sales of its high-priced yoga gear were exploding; the company was expanding into new markets; experts were in awe of its “cultlike following.” As one observer put it, “They’re more than apparel. They’re a life style.” But then customers started complaining about pilling fabrics, bleeding dyes, and, most memorably, yoga pants so thin that they effectively became transparent when you bent over. Lululemon’s founder made things worse by suggesting that some women were too fat to wear the company’s clothes. And that was the end of Lululemon’s charmed existence: the founder stepped down from his management role, and, a few weeks ago, the company said that it had seen sales “decelerate meaningfully.”

It’s a truism of business-book thinking that a company’s brand is its “most important asset,” more valuable than technology or patents or manufacturing prowess. But brands have never been more fragile. The reason is simple: consumers are supremely well informed and far more likely to investigate the real value of products than to rely on logos. “Absolute Value,” a new book by Itamar Simonson, a marketing professor at Stanford, and Emanuel Rosen, a former software executive, shows that, historically, the rise of brands was a response to an information-poor environment. When consumers had to rely on advertisements and their past experience with a company, brands served as proxies for quality; if a car was made by G.M., or a ketchup by Heinz, you assumed that it was pretty good. It was hard to figure out if a new product from an unfamiliar company was reliable or not, so brand loyalty was a way of reducing risk. As recently as the nineteen-eighties, nearly four-fifths of American car buyers stayed loyal to a brand.

Today, consumers can read reams of research about whatever they want to buy. This started back with Consumer Reports, which did objective studies of products, and with J. D. Power’s quality rankings, which revealed what ordinary customers thought of the cars they’d bought. But what’s really weakened the power of brands is the Internet, which has given ordinary consumers easy access to expert reviews, user reviews, and detailed product data, in an array of categories. A recent PricewaterhouseCoopers study found that eighty per cent of consumers look at online reviews before making major purchases, and a host of studies have logged the strong influence those reviews have on the decisions people make. The rise of social media has accelerated the trend to an astonishing degree: a dud product can become a laughingstock in a matter of hours. In the old days, you might buy a Sony television set because you’d owned one before, or because you trusted the brand. Today, such considerations matter much less than reviews on Amazon and Engadget and CNET. As Simonson told me, “each product now has to prove itself on its own.”

It’s been argued that the welter of information will actually make brands more valuable. As the influential consultancy Interbrand puts it, “In a world where consumers are oftentimes overwhelmed with information, the role a brand plays in people’s lives has become all the more important.” But information overload is largely a myth. “Most consumers learn very quickly how to get a great deal of information efficiently and effectively,” Simonson says. “Most of us figure out how to find what we’re looking for without spending huge amounts of time online.” And this has made customer loyalty pretty much a thing of the past. Only twenty-five per cent of American respondents in a recent Ernst & Young study said that brand loyalty affected how they shopped.

For established brands, this is a nightmare. You can never coast on past performance—the percentage of brand-loyal car buyers has plummeted in the past twenty years—and the price premium that a recognized brand can charge has shrunk. If you’re making a better product, you can still charge more, but, if your product is much like that of your competitors, your price needs to be similar, too. That’s the clearest indication that the economic value of brands—traditionally assessed by the premium a company could charge—is waning. This isn’t true across the board: brands retain value where the brand association is integral to the experience of a product (Coca-Cola, say), or where they confer status, as with luxury goods. But even here the information deluge is transformative; luxury travel, for instance, has been profoundly affected by sites like TripAdvisor.

For consumers this is ideal: they’re making better choices, and heightened competition has raised quality and held down prices. And they’re not the only beneficiaries; upstarts now find it easier to compete with the big boys. If you build a better mousetrap, people will soon know about it. A decade ago, personal-computer companies like Asus and Acer had almost no brand identity outside Taiwan. Now they are major players. Roku, a maker of streaming entertainment devices, has thrived even though its products have to compete with similar ones made by Apple (which is usually cited as the world’s most valuable brand). And Hyundai has gone from being a joke to selling four million cars a year. For much of the twentieth century, consumer markets were stable. Today, they are tumultuous, and you’re only as good as your last product. For brands like Lululemon, there’s only one consolation: make something really great and your past sins will be forgotten. 

ILLUSTRATION: Christoph Niemann

Not too long: The Robots Are Coming

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Google and other companies believe that robots today are like cell phones back when they were the size of bricks.   REUTERS/Fabrizio Bensch

Snow White was prescient. In a scene from the 1937 Disney movie, she gets a team of birds and cute woodland animals to clean the dwarfs’ house while she warbles “Whistle While You Work.”

A decade or two from now, that’s going to be how you take care of your house – except the work will be done by small robots, each built for a single purpose. They will hover in the air to pick up clutter, climb walls to wash windows and scuttle under furniture to vacuum while you sit back with a cappuccino and binge-watch Breaking Bad reruns.

Outdoors you’ll find a robot swarm cleaning the streets, trimming trees, and watering plants. Little packages will get dropped off by flying quad-rotor drones, probably emblazoned with the familiar smiley face. For the big stuff – like, say, a refrigerator – an autonomous vehicle guided by Google technology will pull into your driveway, and a hulking Google bot with six legs will carry the fridge up your stairs and gently set it where you want it.

Over Thanksgiving, Amazon unveiled its drone delivery project on 60 Minutes, and in no time the jokes and indignation were flying:

Hunters will grab their shotguns and use the drones like clay pigeons.

The drones will short out and fall from the sky by the hundreds when a rainstorm blows in.

Walmart is working on drones that kill Amazon drones.

Then, days after Amazon’s reveal, Google went public with its new robotics unit, run by Andy Rubin, the whiz who created Google’s Android operating system. The message: Google’s investment is no lark. Robots are for real.

In fact, Google and a lot of other companies believe robots today are like cell phones back when they were the size of bricks and cost $6,000. It may take 10 or 20 years, but before long everybody is going to have a robot – or several.

These robots will not look the way most people expect – they won’t walk and talk like C3PO or Rosie from The Jetsons. An all-purpose humanoid robot doesn’t make much sense. As tech thinker Kevin Kelly wrote, “To demand that [intelligent robots] be human-like is the same flawed logic as demanding that artificial flying be birdlike, with flapping wings.”

Instead, the world will gradually acquire many kinds of robots, each designed and built to most effectively carry out a particular task in a way that saves humans time, money or drudgery.

The Amazon drones would do that. Loaded with artificial intelligence, they promise to deliver small items faster than any human could.

Google’s experimental driverless cars are robots. One day, a delivery truck driver will seem as redundant as an elevator operator.

Robotics and artificial intelligence are tough fields, but there’s so much research lab and start-up money going into it, we’ll get the technology right long before we sort out how to integrate robots socially, legally and practically. It’s less difficult to imagine delivery drones working than to imagine the New York sky darkened by thousands of the things carrying everything from shoes to Chinese take-out.

“We’ll solve those kinds of problems when the benefits to society become large enough,” says Colin Angle, chief executive officer of iRobot, maker of the granddaddy of consumer robots, the Roomba vacuum cleaner. Angle notes that when cars were invented, they were insanely dangerous and disruptive and widely hated.

Society is already a long way into robotics and we often don’t know it. I recently visited some family members who own an enormous farm in Saskatchewan. They handle the harvest with just three people and a giant combine that has so many smarts, the driver mostly rides along and never touches anything. In another decade, the smarts will be so good that the farmer can stay inside and play the commodities market while machines do all the work in the field.

Robot news will keep coming. A company called Knightscope just unveiled its robotic security guard. It could roam a warehouse floor at night, its camera keeping an eye out for anything unusual, its chemical sensors sniffing for leaks.

A startup called Play-i is making toy-like bots that can teach a 5-year-old how to program bots. And you know where that will lead in two decades: 25-year-olds who can invent ever more intelligent bots.

Rodney Brooks, who runs the robotics lab at the Massachusetts Institute of Technology and co-founded iRobot with Angle, has a new robotics company, Rethink Robotics. It is making an inexpensive industrial robot that is simple to train and can work alongside a human. An entrepreneur, for instance, could set one up in her garage and teach it to make something, creating a small automated factory.

Brooks and Angle have long believed the Roomba was the first phase of the “robot-enabled home.” They followed Roomba up with the Scooba floor-washing robot, and promise more along those lines – perhaps a window-washing bot, or a clothes-folding bot. (iRobot won’t give specifics.) The bots will likely all be wirelessly connected to each other, and to a kind of “head butler” robot that takes commands from its owner and hands out tasks to the many mini-bots.

It’s no fantasy, Angle insists. This is the not-to-distant future.

Plus, it’s a whole lot easier than getting birds and squirrels to do your dusting.