Press Release: 

Innovation Up, But Success Elusive

INNOVATION ZEITGEIST, a new book by Silicon Valley guru Alistair Davidson guides managers through a world where everybody is inventing the same products at the same time.

Business is entering the era of continuous innovation. Managers are under pressure to launch a perfect new product or service almost overnight. Many companies are doing it wrong.

As a result, by some measures the business environment is worse for innovation today than ever before. With so many companies making lots of little innovations customers are being overwhelmed by technologies that demand too much of their attention and don’t meet their needs.

Davidson’s guide for managers, Innovation Zeitgeist: Competing in a World With Too Many Competitors, Amazon Kindle, June 2013, offers startling insights.

It’s easier to innovate than ever before, but it’s harder to be successful. Current research suggests that 3 our of 4 venture capital investments don’t return the original investment to the VCs; as few as 1 in 10 meet the VC return goals, and only 6-7% of CEOs make it to the IPO or being acquired.

Most companies underestimate the number of competitors developing similar products. The strongest predictor of success is offering a differentiated high value product. Me-too products don’t cut it in a world of hyper-competition where innovation is taking place in both developed and developing countries.

Many so called innovations are just small improvements or uncreative reactions to customers’ “points of pain.” Competitors are likely rushing a duplicate product or service to market. The resulting net competitive advantage: zero.

Products may be seductive to people like engineers and programmers, but services and solutions are more likely to be money makers for many companies.

Companies that  ‘spec’ a new product and throw over the wall to developers, are going to become extinct. Your customers and their customers won’t actually know that they want until they use it, so you better involve them in the development process from the beginning. ‘Waterfall’ is out. Agile is in.

With so many copycat competitors, you better make sure that customers love and trust you. The top strategy for the rest of the decade will be acting on behalf of the customers, not selling them more features they don’t use. You can’t sell useless bells and whistles or behave badly to customers in a world where customers are tweeting, blogging and rating you.

Embedded device, appliance or platform – it’s a critical choice as Nokia and Blackberry have found. Misjudging the shift can blow your strategy apart.

While individual product owner may think their product is simple to use, the reality is that consumers are drowning in information, accounts, passwords, spam and malware. Think “Simplify!” or you will lose your customers to those who do.

If you are selling digital content (video, e-books, music, software, games), the new frontier in marketing is figuring out what rights and services to bundle or unbundle with the content. You used to buy a one-time right to download a piece of music. Today, when you buy music, it can be bundled with the right to download any time or stream from the cloud.

Inheritance is a big problem for digital content. Most consumers don’t realize that their huge MP3, e-book, audio-book, software and games are not transferable. Think upset consumer when a parent dies and their book collection is not transferable.

He identifies ten approaches to privacy that a company can select from to create a better relationship with customers and win them away from the competition.

The next round of privacy issues are going to make the current problems looks small. Big Data means that companies can not only know about what you have done, but can predict what your secrets are and what you will do in the future. That may be OK for what restaurant you are going to, but not so much if they can deduce your involvement in something taboo or embarrassing.

The Internet is so important to business and personal life today, that we can expect new ways of making the anonymous authenticated. He speculates that owning a certified identity, being part of a ‘Tribe of Trust’ will be critical for the Internet to remain useful.

Alistair Davidson consults on strategy and business development. He’s a veteran Silicon Valley entrepreneur who has built and commericalized numerous software products including planning, innovation and strategy tools. He is the author of four books on strategy and technology, and a contributing editor at Strategy & Leadership magazine.

                                                                                      

Alistair Davidson Contact Information:                      

Phone: +1-650-450-9011

E-mail: Alistair@eclicktick.com

Web site: www.eclicktick.com

Innovation Zeitgeist Amazon web page: http://www.amazon.com/Innovation-Zeitgeist-Transformation-Competitors-ebook/dp/B00DBCQC3I/ref=sr_1_2?s=books&ie=UTF8&qid=1372344844&sr=1-2

Amazon author web page: http://www.amazon.com/Alistair-Davidson/e/B000APSDS6/ref=ntt_dp_epwbk_0

Reviewer Comments

"Alistair Davidson has written an ambitious, encompassing, and down-to-earth treatise on the current digital transformation.  It’s the best description yet of the digital transformation engulfing us and what we should do about it, written in plain language and illustrated with his own photographs and questions for the reader after every chapter. An iconic, original contribution to the literature on digital transformation that is hard to put down. There is good advice and commonsense written on every page.  Must reading."  Stanley Abraham, Professor of Strategy and Entrepreneurship, Cal. State. Polytechnic University, author of “Strategic Planning: A Practical Guide for Competitive Success.

"Innovation Zeitgeist is essential reading for any venture capitalist or startup. It forces the reader to consider what they are doing and what they must continue to do that is different than their many domestic or international competitors, a critical issue for successful startups and for high growth companies." Norm Fogelsong, General Partner, Institutional Venture Partners

“Alistair Davidson has produced an insightful analysis of innovation in the digital era.  This book is a must read for executives seeking survival and success in today's challenging competitive arena.” Robert Allio, founding editor of Strategy & Leadership magazine, former Dean of Rensselaer School of Management. Author of Seven Faces of Leadership

A.T. Kearney's clients are all facing the issue of their business being transformed by digital technology.  Innovation Zeitgeist is a great resource for helping our Digital Business Forum clients understand how important it is to actively scope and manage the changes to their business, organizational structure, acquisition strategy, business model and required innovation approaches. 

Michael Roemer, Partner and International Co-head of A.T. Kearney, Digital Business Forum

"In Innovation Zeitgeist, Alistair zeroes in on many of the key issues we see our market research service-industry clients facing - rapidly changing customer expectations, the need for rapid service introductions, more competition, a need to rethink business models and the types of innovation pursued." Jim Hollingsworth, VP Finance and Security, Pacific Consulting Group

                                   

                                                                                                                                                                         

Techniques for Spotting Plagiarism

More discoveries about plagiarism. Well, having discovered one silly teenager (she goes by Ali Renee Royster or Alianna Rene'e on Facebook, and by Alianna Renee on poetry.com) who has been plagiarizing my poems, I have now discovered the big leagues of plagiarism -- Baidu.com and China.com. They have wholesale importation of content.

I have tried out a number of tools for plagiarism tracking, but the simplest and least expensive approach is to just pick a sentence with an unusual combination of words and search on it in Google. It also suggests to me the advantage of having some unique word in your text that you can search on, perhaps in a reference where it might be less obvious.

http://mashable.com/2012/08/29/plagiarism-online-services/ lists some tools for detecting plagiarism.

I enclose an example plagiarism search on the title and first stanza of the opening poem in Silicon Valley Poems, California Weaving using the metasearch engine ixquit.com

First three results

Poems 2000-1 - Alistair Davidson's Personal Web Site
www.alistairdavidson.com/poems_2001.htm - Proxy - Highlight
And grass turned golden against the bluesky. ... summerblossoms, the greentreesoasis-likein the goldenhills. The almostperpetualbluesky.
Silicon Valley Poems

www.alistairdavidson.com/SiliconValleyPoems.pdf - Proxy - Highlight
It beginswith the beauty Vegetation Grass, the springflowers, summerblossoms, the greentreesoasis-likein the goldenhillsThe almostperpetualbluesky.

Weaving <3, by Alianna Renee
www.poetry.com/poems/317063 - Proxy - Highlight
It begins with the beauty Vegetation Grass, the spring flowers, summer blossoms, the green trees oasis-like in the golden hills The almost perpetual blue sky.

Privacy as Product Differentiation

In past times, the amount of information that businesses held about an individual was relatively small. Today, the amount of information held about a user can be astonishingly large. Location information alone gives detailed granular information about somebody’s life and travels. In a hypercompetitive world, differentiation on the basis of privacy policies represents a range of positioning that can be used to gain competitive advantage and also to claim (and presumably deliver) different levels of ethical relationships with customers. 

Roughly speaking one might imagine companies in a market pursuing ten alternative strategies:

1. Lie about what information is collected
2. Don’t reveal what information is stored about the user
3. Reveal policies and superficial description of information stored about the user
4. Reveal partial information about what is stored
5. Reveal all raw information stored about the user
6. Reveal all raw and evaluative information stored about the user including connections to other users
7. Allow editing and export of privacy information by user
8. Pay user to use their stored information
9. Make the information stored useful to the user
10. Make the information stored useful to the user and charge for it as a service

Today, few companies have been aggressive in their use of privacy information as a differentiator. Though some are now beginning to realize that government surveillance experience may influence customer attitudes. Perhaps an early sign of competitive use of privacy as a marketing weapon is an internal 2013 video developed by Microsoft (http://youtu.be/-Cr6AgUo764 ). Now leaked outside Microsoft, the video’s theme is that Google tracks everything you do so that it can make money off you. While it may not have been intended as an external marketing weapon, it does illustrate the kind of marketing campaign that might be pursued by aggressive companies in the future.

One can easily imagine that in a highly competitive market, where differentiation is hard to achieve, or when a smaller player wishes to gain on a larger player, that trumpeting premium privacy policies might switch customers. The Dutch search engine, IxQuick.com differentiates on privacy in a market dominated by Google. In banking, one of the oldest information businesses, privacy has been a key product attribute for decades, if not centuries. And it is also reasonable to expect that those that collect information from customers will make counterarguments around collected information making the service more useful or permitting the service to be free.

Two other factors make it likely that privacy will become a more important marketing issue. First, governments have put in place, Freedom of Information (FOI) laws. In 2013, the US Federal government is being required to make the default for government files a machine readable open format to increase the transparency of government information and decisions. In the US, the Obama administration has suggested a Privacy Bill of Rights which includes

• Individual Control: Consumers have a right to exercise control over what personal data companies collect from them and how they use it.
• Transparency: Consumers have a right to easily understandable and accessible information about privacy and security practices.
• Respect for Context: Consumers have a right to expect that companies will collect, use and disclose personal data in ways that are consistent with the context in which consumers provide the data.
• Security: Consumers have a right to secure and responsible handling of personal data.
• Access and Accuracy: Consumers have a right to access and correct personal data in usable formats, in a manner that is appropriate to the sensitivity of the data and the risk of adverse consequences to consumers if the data is inaccurate.
• Focused Collection: Consumers have a right to reasonable limits on the personal data that companies collect and retain.
• Accountability: Consumers have a right to have personal data handled by companies with appropriate measures in place to assure they adhere to the consumer-privacy bill of rights. 

Second, even if businesses in particular countries are able to prevent or modify legislated requirements for disclosure, market forces will, albeit slowly, move competitors to reveal more, and aggressive competitors to test and subsequently expand increased disclosure.

Increasing intelligence located in the “network” raises ethical issues in the same way that science fiction writer, Isaac Asimov raised them in thinking about the relationship between human and machine intelligences with his Three Laws of Robotics.

1.      “A robot may not injure a human being or, through inaction, allow a human being to come to harm.

2.      “A robot must obey the orders given to it by human beings, except where such orders would conflict with the First Law.

3.      “A robot must protect its own existence as long as such protection does not conflict with the First or Second Laws.”

In a sense, when businesses choose to store massive amounts of information, they take on a new responsibility not to damage the lives of those they serve. The responsibility is likely not merely ethical, but rather also a legal one. In the same way that we have slander and libel laws, and restrictions on disclosing medical records, unauthorized disclosure of private information will increasingly be exceptionally costly in terms of both legal suits and company reputational damage.

Even more thought provoking is the idea that a company may acquire, model or infer information that allows it make predictions about a user. Disclosure of such evaluative or predictive information, e.g. about financial condition, health, life expectancy, job prospects, political views, gender preference, proclivities around a taboo might be exceptionally damaging in some societies, a topic raised by another science fiction writer, Robert Heinlein as far back as 1939 in his short story, ”Life-Line”.

Copyright Alistair Davidson, alistair@eclicktick.com 2013, all rights reserved. Phone:  650 450 9011

Alistair Davidson is technology strategy consultant based in Silicon Valley. He is the author of four books on technology strategy, his latest being Zeitgeist Innovation: Digital Business Transformation in a World of Too Many Competitors, Amazon Kindle, June 2013 on which this article is based.

Brief Review of Extreme Trust by Don Peppers and Martha Rogers

Having just finished a book called Innovation Zeitgeist that suggests many people have the same idea at the same time, it should be no surprise to discover another pair of authors with similar ideas. In this case, the authors are the well known pair of Don Peppers and Martha Rogers who have written 10 books between them, primarily on the idea of one-to one-marketing, the concept that initially made their names famous.

The thesis of their book is that a high degree of customer trust, what they call "Extreme Trust" is a new requirement for success. The idea which is very similar to the notion of customer primacy or acting on behalf of the customer described in Innovation Zeitgeist shows very similar values for both books. Religions tend to have the rule: "Do unto others as you would, they would do unto you."  Both Extreme Trust and Innovation Zeitgeist share this core belief, whether you talk about it as a customer-centric perspective, an Outside-In perspective, or the role of a Chief Customer Officer/Chief Digital Officer.

Acting on behalf of the customer, Peppers and Rogers point out, is no longer optional in a world where bad behavior will get surfaced on social networks and via ratings. Practices that may be legal may not be adequate in a world where failing to meet customer expectations, gouging a customers or providing poor service is easily called out on Twitter, Facebook, rating sites and other social networks.

It's fascinating as an author to see how a different pair of writers, perhaps inspired by similar experiences, consulting projects, research data and observations can reach similar conclusions from different places and perspectives. I felt an immediate sense of intimacy with Extreme Trust, and admired the smoothly flowing writing and breadth of supporting research. In a subsequent phone conversation, Don and I hit it off immediately. It was a pleasure to meet an author whom I had followed since his first book.

All in all, I definitely recommend reading the book. Before or after Innovation Zeitgeist, it does not matter. The books have differences. Innovation Zeitgeist is more technology oriented, but the values, message and assessment of a digitized world have more in common than they have differently.

Blurbs: Reviewer Comments on Innovation Zeitgeist So Far

Part of the fun of publishing a book is getting feedback from readers for the back cover or page two in the Kindle edition. So here are the blurbs so far:

"Innovation Zeitgeist is essential reading for any venture capitalist or startup. It forces the reader to consider what they are doing and what they must continue to do that is different than their many domestic or international competitors, a critical issue for successful startups and for high growth companies." Norm Fogelsong, General Partner, Institutional Venture Partners

“Alistair Davidson has produced an insightful analysis of innovation in the digital era.  This book is a must read for executives seeking survival and success in today's challenging competitive arena.” Robert Allio, founding editor of Strategy & Leadership magazine, former Dean of Rensselaer School of Management. Author of “Seven Faces of Leadership”.

“A.T. Kearney's clients are all facing the issue of their business being transformed by digital technology.  Innovation Zeitgeist is a great resource for helping our Digital Business Forum clients understand how important it is to actively scope and manage the changes to their business, organizational structure, acquisition strategy, business model and required innovation approaches.” Michael Roemer, Partner and International Co-head of A.T. Kearney Digital Business Forum

“Mr. Davidson has a knack for bringing the thirty-thousand foot practice of strategy down to earth. His discussion of strategic considerations leads directly to an actionable planning structure. Strategy, then, can form a tactical plan. The benefit of the book is twofold: food for thought and a framework for action.” Bruce Rosebrugh, President, VPQ Scientific

"In Innovation Zeitgeist, Alistair zeroes in on many of the key issues we see our market research service-industry clients facing - rapidly changing customer expectations, the need for rapid service introductions, more competition, a need to rethink business models and the types of innovation pursued." Jim Hollingsworth, VP Finance and Security, Pacific Consulting Group

“Bravo! Innovation Zeitgeist offers deep yet pragmatic ideas to address today’s business challenges. Alistair Davidson’s depiction of trends dramatically altering the competitive landscape such as technology overabundance and customer attention scarcity hits the nail on the head.”  Adrian C. Ott, author, “The 24-Hour Customer”; CEO, Exponential Edge Inc.

"Alistair Davidson has written an ambitious, encompassing, and down-to-earth treatise on the current digital transformation.  It’s the best description yet of the digital transformation engulfing us and what we should do about it, written in plain language and illustrated with his own photographs and questions for the reader after every chapter. An iconic, original contribution to the literature on digital transformation that is hard to put down. There is good advice and commonsense written on every page.  Must reading."  Stanley Abraham, Professor of Strategy and Entrepreneurship (Emeritus), Cal Poly. Pomona University, author of “Strategic Planning: A Practical Guide for Competitive Success”.

Innovation Zeitgeist book now available on Amazon Kindle

Innovation Zeitgeist: Digital Business Transformation in a World of Too Many Competitors is now up and downloadable for $2.99 at Amazon as a Kindle book. I have also reformatted my first Kindle book, Silicon Valley Poems.

The genesis of this book was actually quite surprising to me. It was customer demand driven as opposed to author driven. I participate in a MeetUp group on Product Management run by Francis Kurupacheril. I put together a presentation on strategic product management (available at http://www.eclicktick.com/Davidson%20Strategic%20Product%20Management%20Presentation.pdf ) which I presented on April 9, 2013.

A friend, Jeremy Hill read the presentation and immediately suggested that I should turn it into a book and so two months later, it is published. Innovation Zeitgeist is my fifth book, four of which have been around strategy, technology and innovation. In some ways it's the most interesting because it represents a progression from my earlier books. My first book, Seizing the Future, dealt with the importance of technology in changing strategy and policy choices. My second book, Riding the Tiger, addressed the narrower question of information management strategy. It was particularly authoritative because one of the three authors, Harvey Gellman had been the first person to buy a computer in Canada, while my partner, Mary Chung and I had been doing interesting work in strategic planning tools and artificial intelligence. My third book, Turn Around! was focused on software development and business development choices for software companies.

Innovation Zeitgeist is more encompassing than Turn Around! or Riding the Tiger. It was triggered by a number of observation that I had made working with clients and startups over the past decade.

The first observation was that it was increasingly difficult to do a startup or develop a next generation product in a large business without running into the problem that many other organizations were developing similar products.

The second observation was that if you try to choose a product or service, increasingly it's a very challenging task. There are just too many to evaluate.

The third observation was that engineers and developers are often a poor model of a potential buyer. In many product categories, customers care little about the features that developers have sweated over. In many cases, the customer would prefer a service or a solution rather than buying a product.

The fourth observation, which I borrowed from Joe Pine, author of Mass Customization, is that for some product categories, experiential marketing is the most powerful way of influencing customers. REI offers courses to teach you about a sport and let you try out equipment. That's likely to be far more affecting than seeing a piece of equipment in a store.

The fifth observation was based upon research by Bob Cooper (McMaster University, author of Winning at New Products). His research has suggested over several decades of work that the most important predictor of new product success is offering a differentiated high product. Yet differentiation is the single most difficult task in a Zeitgeist world. New methods of differentiation need to be though about.

Innovation Zeitgeist: Digital Business Transformation in a World of Too Many Competitors, Amazon Kindle book released this past week.

It's not often I get to announce a book on my blog. This week I released my fifth book, Innovation Zeitgeist: Digital Business Transformation in a World of Too Many Competitors. It's my fourth business book.

The thesis of the book is actually quite simple. We are living in a age where many people are attempting similar innovations at the same time. As a result, entrepreneurs and product managers have to think more carefully about their strategies. 

A key take-off point for the book is the research of Robert Cooper (Winning at New Products), whose research suggests that the strongest predictor of innovation success is offering a differentiated high value product. The two ideas raise the central problem that the book addresses: "How do you achieve high value differentiation if lots of people are offering similar products?"

Innovation Zeitgeist attempts to answer that question and provide help to entrepreneurs and products managers who want to avoid having a me-too product.

In the book, I propose a number of ways of thinking about the problem. For example,

1. Instead of automatically thinking "product innovation", many companies need to think about migrating from product to service, from service to solution, from solution to experiential selling.

2. Instead of thinking only about selling a product, managers need to think about different ways of monetizing a product. The range includes sales and licensing, rental, subscription, advertising supported, sponsored and product placement as potential means of monetization.

3. In a digital age, many content products can have different rights and services attached to them than were attached to the physical version of the product. For example, you used to purchase music in an MP3 format with the right to download the music once. Now, many MP3 sales include cloud storage and streaming for the music purchased. Book content can be bought as a physical book, e-book, audio book or sometimes rented, or sometimes borrowable under a subscription program such as Amazon Prime. Even more interestingly, Amazon now offers some books in both Kindle and audio format with the ability to synchronize both media so that if you wish to continue listening to a book you have been reading in the car, you can switch seamlessly from visual to audio versions.

4. In an accident of timeliness, I also discuss who privacy can be used as a source of differentiation.

Innovation Zeitgest is priced at $2.99. Please read it and because it is published electronically, I plan on incorporating new content as suggestions and examples from readers are submitted to me.