New technology, new business!

The Internet is always a happening place – in a cyclical manner, either business drives technology evolution or technology drives new business ideas. Web 1.0 was about ‘Read only’ with largely static information push whereas Web 2.0 dealt with ‘Read Write’ phenomena – examples are social webs, refined search engines, online media, content aggregation/ syndication and mashups (Flickr, Google Maps etc). Here are a few technology changes which are impacting business on the internet…

As per ReadWriteWeb’s Richard MacManus, some of the key trends are:

- Structured Information (Data and Services) and not Pages are the future focus (e.g. Amazon E-Commerce API, Dapper, and Twitter API etc) which leads to concepts such as Symantec Web, Filters / recommendations and Personalization. All of this makes social and business interaction more secure, authentic and better organized.

Symantec web leverages existing web information, applying specific vertical semantic knowledge and delivering results as a consumer centric web application. A good example is Reuters Open Calais API that does a semantic markup on people, companies, places and events. Therefore, data portability and connectivity become very important for enabling the Symantec web. Some of the other products to watch include Twine, Freeset, Powerset, Talis, TrueKnowledge, AdaptiveBlue, TripIt, Spock, Quintura and Hakia.

- Data driven web is about APIs, web services and open data standards becoming more prominent – also beyond the PC, as the focus again shifts to mobile and IPTV which are again structured content- we can also see a lot of PC applications being made available on the mobile to provide a seamless experience. There are many open data products – e.g. Google’s Android mobile OS, data remix products like Dapper and Yahoo! Pipes, lifestreaming apps like Tumblr, Jaiku, Onaswarm, FriendFeed etc.Open data standards involve data portability (taking data from one site to another – e.g. dataportability.org), open IDs (portable single sign on IDs), Social networks (e.g. Google’s Open Social) and APML (attention standard or what you read, write, share and consume).

- Mobile web focuses on applications and services that are portable, location aware and integrated with physical world. The mobile phone is always on, always carried and has a built in payment model that makes it attractive as a revenue generator. Devices like iPhone have revolutionized the web UI, added full feature desktop applications and rich HTML emails (competition to blackberry). Some interesting mobile apps include Gmail Java app, Google maps for mobile, Opera Mini, Fring (VoIP and IM), Twitter (for micro blogging) and Shozu (send media to the web).

- Recommendation engines cannot be far away with all that content on the web! These are primarily driven by a user need for personalization and involve different techniques (personalized, social, item or a combination of all the three). Examples of such engines include Amazon, Netflix, Stumble Upon, delicious, Pandora etc.

Business view of these technologies

As per the McKinsey Quarterly, some of the key business trends include Information based business; automation of information, putting more science into management, using customers as innovators and extracting value from interactions. Interestingly, these relate directly to the technologies mentioned above in more ways than one and mostly revolve round the internet! Throw in a few more concepts like virtualization 2.0, web gadgets, branded professional video content, wireless USB and high speed Bluetooth and you have quite a handful of technologies to keep you busy for a while!!

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Learn from the small

Is innovation something only for the big players, with deep pockets and large R&D budgets? Or is it something a smaller company can also aspire? Nobody can dispute the fact that having a large R&D budget definitely helps. IBM, AT&T, the great innovating companies of the past century, have all invested billions of dollars in R&D. The pharma companies today do the same. The US Department of Defense, owner of the world’s largest budget, is also the world’s most significant R&D center.The famed ‘military-industrial’ complex of the US is no myth.Even the Internet came out of one such R&D project.

But, do small companies need to give up?

SMEs have their advantages too!

What are the forces that constrain innovation? A rogue’s gallery would line up something like this:

• Resistance from the established product or market regime. It was not for nothing that GM created a separate unit called Saturn to design and build its next generation car – it knew quite well that its existing status-quo- loving units could never do it. IBM resorted to a similar device to create its own PC. Obviously, the smaller you are, and the less successful you are, the less resistance you will have to deal with when you want to do something new!

• Bean counters know the cost of everything, and the value of nothing. Such corporate nay-sayers are much more common in big companies than in small ones!

• Too many layers between the ‘ideas person’ at the top (usually the founder/CEO) and the front line troops who have to execute the new idea. Again, won’t SMEs be much better off here? Strangely enough, it has been my experience that the CEO/founder is usually the one brimming with ideas – which is why he is the founder, after all. His/her problem usually is,people to take his/her ideas seriously! Anyone familiar with the way companies actually work would understand what I am saying – only the naïve think a CEO just has to issue orders, and the job gets done!

It almost looks like SMEs have an unfair advantage!

What is innovation, anyway?

One of the most innovative companies I have ever studied was a small company in Ahmedabad called Amtrex. While other companies were merely running management development courses on BPR, Amtrex was actually doing it redesigning its business processes, so a customer could get an air conditioner in 24 hours (In India, mind you!), reconfiguring its new product development process to cut the time from concept to market by more than half, and so on. Why was it able to do such things? Because a small group of people at the top dared to think it could be done, had nothing to lose by doing things differently, and in fact, realized that the company could only expect to survive by doing things differently.

After all, innovation can be in business processes, business models, too.

The best recent case is of Twitter. The founder, Evan Williams, worked at Google, supposedly the most innovative large company in the world, and found the processes there, far too stultifying to come up with anything new. He realized very early that most new ideas cannot be easily understood by anyone other than their creator, and that they happen mostly by accident, not by design or management process. Though Google consciously builds management processes to encourage innovation, it wasn’t enough for Mr. Williams.

Listening to the unvoiced voice of the non-customer!

Finally, where do the most innovative ideas come from? From the market, yes, but not necessarily the one we mean. Blue Ocean ideas come from listening to non-customers, not to customers. Southwest Airlines, to quote an obvious example, could never have come up with its innovative business model by asking airline travelers what they wanted. If that had been the way to get ideas, American and Delta would have been much better at it, since they have millions of captive customers. Southwest created their business model by listening to non-airline-travelers.

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