Everytime an engineer joins Google…

.. a startup dies.  It’s a great quote – apparently from entrepreneur Chris Dixon, and quoted in today’s article in the Guardian about the EU’s antitrust review of Google.   I’ve also seen the great Wired article on  Google’s search algorithm by Steven Levy which gives an insight into the work that Google do behind the scenes to ensure that they keep at the top of the pile in the search game.

Any large business that gains a dominant position in an industry (as Google certainly has done in the search and advertising game) is going to be subject to lots of regulatory scrutiny.  The size of Google does result in real power.    The best people will want to work for Google (at least for a while) and as the Chris Dixon quote implies, this is likely to lead to a reduction in innovation.  But at the same time, Google employees will leave, and many great startups have ex Google people behind them, so overall I don’t think that is a real issue.

But control of what product or service being advertised in search results does mean that Google has a pretty influential role, and you can easily see that when a company who obtained much of their business from high placement in Google search results is vulnerable to Google changing the search algorithms. If they are no longer in the top placements then they could be very badly impacted.  But I hope that potential regulators really think long and hard about intervening, and the ultimate test needs to be the internet customer.     Any intervention must clearly provide for a better service for the internet customer.   And in particular I really hope that EU or other regulators can be kept away from any involvement in the details – because search placements are so important, a whole SEO industry has emerged to help companies increase rankings.  I trust Google more than an independent regulator to manage the continuous evolution of new strategies for gaming search placements.

Is anyone reading this blog in favour of regulating Google, and if so, why?

Google and intelligent pipes

I think that the shift to mobile internet use is one of the major drivers for innovation, so I was interested to pick up on the remarks made by Eric Schmidt of Google (see report from The Register)  in a Q&A session at the Mobile World Congress in Barcelona.

As one question put it  “To me, it looks like Google wants to turn the mobile operator into a dumb data pipe, where you [Google] provide all the services on top”.  It’s the question that I’d also have liked to have put if I was in the audience.  I think that this is exactly the fate of the mobile operators (it’s largely already happened to fixed broadband players).  The emergence of smart devices is allowing the platforms to become the new focus for innovation.     It’s a bit simplistic (ie it’s not just Google – many players will be competing on top of the dumb data pipe) but at the moment it looks likely to happen.

Of course Eric Schmidt denied the premises of the question.  And went on to talk about the importance of intelligence in the pipes.  Google (and other players) need infrastructure that is smart – and offers additional capabilities.   He also talked about the opportunities that the growth in mobile data opened for mobile operators to make money.  But his bottom line was ‘network neutrality’, and to my mind this means that in the long run we will end up with operators mainly running the pipes.  And I suspect that as a consequence most of the pipes are likely to be fairy dumb.

I think it is a matter of where the money comes from, and where is the best return on the investment.  It is possible for network operators to make money in many ways.  They could charge for content.  But the amount that they make on content is a lot less than they could make by investing the money in gaining more customers.  Similarly for devices.  Operators could (and sometimes do) design or build exclusive devices.  But the amount of money that the make on the device isn’t likely to be anywhere near the return on investment.   And in the services area – they could offer applications through apps stores.  But they would have to sell an awful lot of apps to make the same returns as they do on their infrastructure businesses.

Of course when they do invest in infrastructure, if you want smarter infrastructure you have to find a way of getting someone to pay you to build it if you want a decent return on your investment.  But much of the added intelligence only provides small benefits to the other players operating in the field. So I would predict that while we will get some ‘smarter infrastructure’ it’s going to be relatively small – and most infrastructure will be minimum needed to support the majority of services that operate over the top of the infrastructure.

So I predict that applications are going to increasingly drive purchase behaviour, and the applications will be delivered through application stores, rather than mobile operators.  Application stores dramatically increase innovation.  By reducing the barriers to entry  (before the emergence of the application stores bringing a mobile data application to market was really hard) many more players come up with ideas.  Many, even most ideas don’t work well.  But consumers can find the applications that fit their needs, and Darwinian evolution leads to a set of winners.  The consumer benefits.

It’s interesting that one of the other major announcements at the Mobile World Congress is the announcement of the ‘Wholesale Applications Community‘ where a long list of mobile operators and industry device manufactures are getting together to provide a single route to market for developers of applications.   If the alliance works, we should end up with an apps store that could rival the Apple and Android apps stores.   I think this is a good move – but I suspect the main advantage to the mobile industry is to allow them to compete better with Apple and Google for the basic network and device space. …

What do you think?

Innovation and NASA

I’ve been looking at the press on Obama’s budget and the decision to can the ‘Constellation’ programme that was going to put people back on the moon.  And then Mars.   I used to be a great Science Fiction reader, and in my youth lived through the exciting times that led to the original moon landings.  And I do think that we ought to be exploring space – although I also recognise how much we need to do to fix the planet we live on.    I really think the world should always be investing in a small amount of leading edge activity, extending the limits of human knowledge.   We also need these programmes to inspire more people to study science and take on science careers.

I also think that the US administration has done exactly the right thing in dropping the current plans.  I’m not an expert in this area, but it seems that manned space exploration has lost its way recently.  The space shuttle was a great idea – and we’ve seen some wonderful spinoffs (like the photos and knowledge from the Hubble Space telescope).  But the International Space Station has been a disaster, and the ‘Constellation’ programme seemed very old fashioned in its approach, very expensive, and threatened to completely dominate US space funding for the foreseeable future.  And to be honest I don’t see travelling to the moon as particularly useful – it seems to me that the next step for humankind should be to go to Mars, and the moon seems a bit of a dead end.  If Mars has water which looks increasingly likely, then there is a strong possibility of being able to create the resources needed to survive, and generate fuel required to return.

In the UK the newspapers have been reporting the end of manned space flight.  I think that’s not the right – it even looks to me as if Obama has increased the budget for NASA. I’m hoping that much of this money will be spent outside NASA, and used to encourage innovation in private developed space travel.  At the moment many small companies are developing space vehicles, and we even have people looking at developing space elevators.   I expect that with the right kind of encouragement from NASA  the private sector will be able to take greater risks and through competition innovate to create some of the breakthrough ideas we need to succeed.

There a good post on Rand Simberg’s blog which provides a lot more detail behind the decision.

What do you think we ought to be doing to promote innovation in the area of space travel ?

Could online marketplaces tackle poverty?

Attended a RSA lunchtime event on 28th January,  chaired by Matthew Taylor, but where Wingham Rowan, James Purnell MP and Jerry Fishenden of the LSE put forward the case for online marketplaces.   The basic pitch is that the Government should be encouraging the development of an online market (like eBay) but focused on the needs of the less well off and unemployed – allowing them to trade time and skills, resources and even money.  Wingham showed a good  working prototype  of the system at ‘Slivers of Time Working’ project, and there was also an excellent report handed out from the Joseph Rowntree Foundation titled ‘Could online marketplaces tackle poverty?’.

It’s an interesting space.  Many people in poverty have many different sources of income – could be a mix of benefits, informal work & perhaps other black or grey market activity.   A lot of services are difficult to market outside personal relationships.  The ‘slivers of time working’ project enables people to track reputation, build skills and potentially use these skills to enter the full time work market.   Potentially the same system could be used for trading or hiring goods, and even provide a mechanism for micro-credit services.

I see this as a great opportunity for a large company who wants to get really involved in a widespread internet project.  To make this work, the core system needs to have an extremely low cost of operation (under 2% of the revenue value traded on the market), but if you can make a system that works widely in this way then I could see it become the defacto way of trading many resources – and potentially not just confined to the less well off.  It could easily become another eBay or Craigslist if it went global.

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Apple’s new iPad – a new category or not?

I’ve been trawling around the web, looking at the reviews from the launch of the new Apple tablet.   I guess that the iPad is only really significant if it represents the launch of a new class of devices.  Sure tablets have been around for a long time – but has Steve Jobs and the Apple team managed to produce a workable tablet or not?

The web has the usual mix of people who think it is totally revolutionary, and a lot of people who are unhappy about various aspects of the device.   I’ve been impressed with the reports of how fast the tablet works.  There is something about speed which is important, and I think that the fast HTML response of the original iPhone (compared to earlier devices) was certainly one reason why the iPhone worked so well.

Another plus is that the design and user interface (and mix of applications) will be immediately be usable by everyone who has used the iPhone.  That is very positive.

And the price points look very cleverly positioned for a first generation product.  It’s not quite cheap enough to be bought by everyone – but the second generation product probably will be.  And to me the low prices suggest that Apple see a lot of the money coming in the future through the sales of content and applications.  Apple really are shifting towards becoming a major provider of on-line services.  Choosing to compete so storngly with Amazon for online books is another sign (and very positive for the industry).

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IBM and the Internet of Things

Thanks to my regular Twine digest, I found a Read Write Web posting from Richard MacManus reviewing a recent speech by IBM CEO Sam Palmisano on 12th January at Chatham House. The focus was on the IBM “Smarter Planet’ initiative in IBM’s own words:

By a smarter planet, we mean that intelligence is being infused into the systems and processes that enable services to be delivered; physical goods to be developed, manufactured, bought and sold; everything from people and money to oil, water and electrons to move; and billions of people to work and live.

The initiative is  broad – but at the heart is based on three core trends – availability of enormous computational power (often embedded in everyday objects), connecting devices through the internet (sometimes called the Internet of Things) and the availability of processing power and analytics to turn all the data into knowledge.  The talk listed many examples of ‘Smarter Planet’ initiatives – including transport congestion schemes, smarter healthcare systems, improved financial services, smart meter systems and reduced supply chain costs for major retailers.  But all these initiatives raise some interesting questions…

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Innovation and spamming

In the last few days I’ve had to manage a spam attack on this blog – it started late last week, and by this morning I’ve had over 260 comments attached to the site. most advertising pharma and other dubious products. I wonder if this was triggered by the article that mentioned pharma. As always with spam I find it pretty amazing that people somewhere are paying for this service – I find it difficult to imagine that anyone, anywhere could actually follow a link in one of these posts and then buy something. Yet there must be one or two people who actually do – and the Economics of the Internet mean that even very low hit rates (in this case I’d imagine it must be less than 1 in 10,000) still generate a return somewhere for the spammer authors. Anyway – I’ve been very glad to find some effective spam control plugins. But be aware I don’t have the time to trawl through the spam – so if anyone posts a comment and it doesn’t appear on the web site, it may well have been lost to the spam police.

Glaxo, Malaria & Open Innovation

Reading the morning paper, and I came across  this article in the Guardian saying

GSK will publish details of 13,500 chemical compounds from its own library that have potential to act against the parasite that causes malaria in sub-Saharan Africa, killing at least one million children every year. It took a team of five investigators a year to screen the two million compounds in GSK’s library – its entire collection of potential drugs and possibly the biggest such library in the world. The move was given a cautious welcome by charities such as Médecins Sans Frontières, although Oxfam questioned whether other big drug companies would want to develop treatments from GSK patents.

This is a good move.  Malaria is arguably one of the major problems in the world.  It has a huge cost to society – particularly in Africa, both in terms of loss of life, but also in reduced quality of life for many more people.  Jeffrey Sachs in the must read book ‘The End of Poverty‘ points out that Malaria has a massive economic impact, and indirectly is one of the causes of poverty and the lack of development in the Third world.  He’s quoted on wikipedia as saying that the economic cost of Malaria in Africa is around $12bn a year – and he estimates it would take about $3bn a year to prevent Malaria – so it would be sensible to have a global initiative to do this (using many methods – including simple initiatives like increased use of nets) but the sad truth is that Malaria is also a problem of the poor – and so existing Pharma companies are unlikely to spend the large sums of money needed to take potential drug cures to market.

Glaxo suggests that by releasing the chemical compounds it will enable many researchers to investigate and find better fixes for Malaria. I suspect that the initiative will generate a lot of new activity – and perhaps introduce an additional Open Innovation model into the pharma business.   But it will still need some broader backing to take solutions to market.  Ideally it would be good to see countries come together to back this kind of activity – and some vehicles like The Global Fund to Fight AIDS, Tuberculosis and Malaria do exist (although I suspect not sufficiently well funded by our politicians).   It is also an area that the Gates Foundation is working on, and perhaps other large charitable organisations could help fund.

Perhaps the real innovation challenge is to find new models for getting Pharma solutions more widely deployed in the world. Deployment in the third world is a major challenge.  But even closer to home, we have major problems in getting new drugs to market.

Pharma seems to be an area where there is huge effort on regulation in many countries that increases the cost of deployment of drugs.  The focus on regulation is understandable given previous tragic mistakes – but I feel we probably have the balance between risk and reward wrong.  There are huge inefficiencies – why have different approval schemes for different countries – could we not streamline the process?  And use ICT to speed up and share information on drug use and interactions, so making it quicker to get drugs to market.    For most drugs I’d assume in this day and age the best way of delivering them to customers would be through the post – a GP could enter a prescription, and they could be delivered the next day, cutting out all the middlemen in the way.  Each person could have a centralised record, which they could control and interact with – providing feedback to GP and drug companies (suitably anonymised).   In the future, also perhaps provide increased information on genetics to enable gene/pharma interactions to be identified.  We could make the whole process so much more effective than at the moment.   But like most industries, Pharma is incredibly complicated, and there are many embedded interests that are likely to make major improvements difficult to make.

Do you have any ideas for getting pharma solutions faster to market?

Innovation exemplar – Evernote

Mashable has a great video (about 15 minutes long) with Ben Parr interviewing Evernote CEO Phil Lubin.  I’m very fond of Evernote, which in my view is one of the best applications available for the iPhone (providing note synchronisation), and also works across platform to enable you to quickly retrieve stored information. I was an early adopter, and I use it everyday. It also has some really neat technology embedded in it – for example if you upload a photo Evernote will index any text it can find so you can subsequently search photos you have in Evernote for text.   In the rest of this post I’m going to argue that Evernote is also a really good example of how to build a successful startup.  It’s a great example of innovation at its best.

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Photorealistic video in your mobile?

From my weekend edition of Feedly, I’ve just come across an article  Architecture on the Cusp posted on BLDGBLOG by Geoff Manaugh that highlights The Third & The Seventh, a fifteen minute film by Alex Roman.  He apparently took a year off to create an entirely computer-generated, yet extremely beautiful photorealistic tour of what I believe are real buildings. I really recommend looking at this film.  And I’m going to argue we will see the underlying technology used more often in everyday life in the future.

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