Point: Creating new products & services for developing countries requires radical innovation and opens new opportunities in developed world markets as well

Story: GE Healthcare sells sophisticated medical imaging devices around the world. Historically, they have sold these high-end machines in emerging economies like India. But only 10% of Indian hospitals can afford a $10,000 ECG machine. Reaching the other 90% of the market takes more than simply cutting a few costs. It requires radical innovation and an in-depth understanding of local conditions.

For example, most Indians live in rural areas. That means they don’t have a local hospital to go to. Rather, the machine needs to go to them, and no rural healthcare clinic is going to lug a $10,000 machine into the field even if it could afford the device. Achieving the goal of a lightweight, reliable, simple-to-use ECG machine took radical re-thinking. GE built a device, called the MAC i, that could fit in a shoulder bag, has a built-in replaceable printer, and cost only $500. In addition, because the device would be used in rural locations with scant access to electricity, GE designed a battery that could do 500 ECGs on one charge.  To make it easy to use, GE designed the machine to have only three buttons. Finally, just because the device is inexpensive doesn’t mean it’s dumb.  Because the cost of a copy of software is zero, GE installed professional-level analysis software to aid rural doctors.

With its new MAC i, GE has unlocked a whole new market in developing countries.  Beyond that, GE has also opened up new opportunities back home — and that’s the reverse innovation side of the story.  How? The portable ECG machine with a $500 price tag is ideal for use in ambulances, saving lives of accident victims in rich countries as well.  Cheap, portable, and easy-to-use devices are desirable in any country.

Action:
Reverse innovation means designing a product for a developing country and bringing that innovation back home.

• Make the product extremely low in cost so that it is price-acceptable in developing markets and opens up new sales opportunities in developed markets
• Start from the ground up with a radical rethinking. (See also the Tata Nano example.)
• Plan for intermittent electricity
• Make the product modular to facilitate remote repair
• Make the product easy to use, like GE’s three-button ECG machine

Sources:

Vijay Govindarajan, “Reverse Innovation: A New Strategy for Creating the Future” HSM webinar March 18, 2010

Prof. Govindarajan will be speaking more on this topic at the World Business Forum in NYC October 5-6, 2009

India Tech Online

Tags: emerging markets, How-to, Innovation, Vijay Govindarajan, World Business Forum

Point: Ted Turner’s tips for seeing over the horizon

Story: Many leaders are described as “visionary” — I’m always curious as to how they got that way. Is it something they’re born with, or something we can we all learn?  I had a chance to participate in a Silicon Flatirons Q&A with media mogul Ted Turner as we probed this question with Ted.

Before CNN, people didn’t think that a 24-hour-a-day news channel was viable.  How did Ted prove them wrong? “It helps to see over the horizon,” Ted said.  ‘Most people can’t do it, but I think your brain is like a muscle. And just like any other muscle, you can use it and your brain will improve.”

Ted elaborated: “I have a 128 IQ, but 140 is genius.  I was in the 97th percentile, so that means 3 percent of people were smarter than me. I knew I was going to have to work hard if I wanted to accomplish something in life. So I read a lot — classics, warfare, Alexander the Great — I used my brain all the time. Everything I did was education.  Others just shot the breeze, wasted time — nothing wrong with that, but you can’t get to the top doing that.”

Ted’s answer points to a combination of aptitude and hard work. (I think it’s interesting that Ted thought being in the 97th percentile meant he’d have to work hard if he wanted to accomplish something — it reminded me of Andy Grove’s “only the paranoid survive” philosophy.)

What did Ted see over the horizon? As Ted described it, the idea for CNN was born of his own desire to stay on top of the news but, as a busy executive, not having time to watch the news during the two times a day it was on during the 1970s. “I knew I was gambling with CNN, but I knew it would work,” Ted said. “At the time, the news came on at 6:30 and again at 11pm. I never saw the news — it was inconvenient. I knew that having news on 24 hours a day so you could check in anytime was something that people would want.”

Beyond CNN, Ted was also working to build a multichannel universe. CNN fit into this universe perfectly.  In the 1970s, three broadcast networks — ABC, NBC and CBS — controlled the programming people could see.  For example, sports games across the country were televized, but they couldn’t be seen outside the local area because the broadcasters had a monopoly.  “The broadcasters had carved up the games,” Ted said, dividing the NFL, AFL and Monday Night Football between them. “Everyone paid the same prices and made the same profit. All three networks were happy, but I wasn’t happy” — customers weren’t being served, and incumbents had no incentive to change.

This is where Ted’s reading and habit of learning came into play again. “It was in early 1975 that I saw an article about communications satellites in Broadcasting magazine,” Ted recalled. Reading the article, Ted realized that he could use one satellite “antenna” in space to cover all of North America.  He’d found a way to compete with the established networks.

There’d be more hard work along the way — “We sweated payroll for ten years,” Ted said — but Ted relished the challenges. “The way to lead is with infectious enthusiasm, get everyone enthusiastic about what we’re doing.”

Action:
* Fit your current strategy into the larger picture: Ted’s vision for CNN was part of his overall goal to build a multi-channel universe
* Lead with infectious enthusiasm

Sources:
Silicon Flatirons Q&A November 13, 2009

Call Me Ted, by Ted Turner

Tags: leadership, profile, Ted Turner

Point: You may not be able to predict the future, but you can prepare for it by tracking early trends and staying open to disruptions.

Story: What will the web look like in 20 years? Stuart Miniman of the Office of the CTO at EMC Corporation asked me to contribute my thoughts on this, as part of EMC’s ON magazine celebration of the web’s 20th anniversary.

My predictions for 2030? I know that I don’t know, but I do follow some heuristics that are helpful regardless of which future materializes.

“You can’t predict the future,” said Google’s Eric Schmidt back in 1993 when he was president of Sun Technology Enterprises (a subsidiary of Sun Microsystems). “But you can estimate it.  Your estimations are based on understanding the model of technology.”  Schmidt’s mental model of technology involves looking at underlying drivers and expecting innovation from anywhere. “Don’t think your company is the best and will be the first to come with an innovation in your area.  That attitude will lead you to become blindsided.”

With that in mind, here are two trends I’ll be watching closely for emerging innovations:
* Geo-Spatial Data and Semantic Smarts

Consider these facts by Jeff Jonas, IBM Distinguished Engineer and Chief Scientist, Entity Analytic Solutions, IBM Software Group:

Mobile devices in America are generating something like 600 billion geo-spatially tagged transactions per day. Every call, text message, email and data transfer handled by your mobile device creates a transaction with your space-time coordinate, whether you have GPS or not. Every few minutes, it sends a heartbeat, creating a transaction whether you are using the phone or not.

The implications? Companies can use data analytics to learn unprecedented amounts of information on their customers (how far they travel, locations where they hang out, the people they hang out with). It may sound like big brother, but some consumers are already turning this into a big game and social lifestyle with the help of companies like Foursquare, Loopt, Brightkite, etc. There’ll be opportunities for companies to use this data combined with web-based data to serve their customers better.

With every device and service gathering more and more data and becoming more connected, systems will begin to “understand” the meaning of the data to give people what they want.  I don’t know if real AI will ever happen, but with all the available data, social tools, and clever people building clever companies, it seems that devices are going to act like they know the meaning behind the data and and take or suggestion actions to help you. For example, if your cellphone knows your calendar’s next appointment, your location, and gets the Tweets about the traffic jam on the highway, it can alert you to leave a little earlier or alert whomever you’re meeting that you’ll be late.

* Social/Distributed Decision-Making

Knowledge-intensive tasks such new product and service development will be aided by enterprise-wide collaboration systems with built-in voting, reputation systems, and predictive markets.  These concepts were envisioned by MIT Prof. Thomas W. Malone before the Web as we know it even existed. His publications, such as Computers, Networks and the Corporation, describe the organizational changes that networked computers would bring.

Tom Malone now heads the Center for Collective Intelligence at MIT. The center’s basic research question is:  How can people and computers be connected so that—collectively—they act more intelligently than any individuals, groups, or computers have ever done before?

I think one of the most powerful uses of the web in the future is for crowdsourcing and open innovation to tackle some of the world’s biggest problems.  Take, for example, that Innocentive just announced a GlobalGiveback Innovation Challenge Set to help solve some of the world’s water problems through open innovation. Other crowdsourcing platforms like ideas4all.com are enabling entrepreneurs to suggest product, service and business ideas to win funding.  The web will enable collaboration on a global scale that will let us marshal our creative energies to tackle global issues.

What do you think?

And, yes, whatever the future brings, there’ll be an app for that.

Action

• Look for things that are becoming ubiquitous but aren’t being used as much as they could be.
• Avoid self-centered attitudes about the future. Just because you don’t want to be tracked doesn’t mean others don’t want to be tracked or that someone won’t create a fun and rewarding reason to change your mind about tracking.
• Look for chocolate+peanut-butter combinations like geo-spatial data + semantics.
• Test out some crowdsourcing platforms (ideas4all.com is public and ongoing) to get a feel for how they work. Consider how you could apply them.

Sources:

EMC’s ON magazine: The Web at Twenty

Jeff Jonas: Your Movements Speak for Themselves

Eric Schmidt at the University of Colorado-Boulder, February 9, 1993

Tags: crowdsourcing, decision-making, future, geo-spatial, open innovation, planning, predictions, semantic web, trends