Point: Organizing innovation investments into broad themes focuses energy and enables collaboration

Story: Until 2008, Hewlett-Packard Company (HP) Labs ran hundreds of research projects. Then new HP Labs’ director Prith Banerjee reduced the total number of projects and organized research into eight cross-cutting themes: Analytics, Cloud, Content transformation, Digital commercial print, Immersive interaction, Information management, Intelligent infrastructure and Sustainability. They then invited universities to submit research proposals within these core themes. In 2008, HP selected 45 projects at 35 institutions to receive HP Labs Innovation Awards. Winners in 2009 will be announced on March 16.

Similarly, Boulder venture capital firm Foundry Group invests in five themes: Human Computer Interaction, Implicit Web, Email, Glue, and Digital Life. The commonality among these five themes, besides the tie to software/internet/IT, is that the themes are horizontal rather than vertical. The themes cut across industries, just as HP’s the areas do. The Foundry Group’s goal is to identify underlying technology protocols and standards that have the potential to win big. When evaluating whether to invest in a new company, “our first question is, does it fit our investment themes?” said managing director Brad Feld. “We focus on broad horizontal themes where we can create market-leading companies.” For example, the Foundry Group invests in Lijit Networks, Inc. because Lijit’s search infrastructure services apply to any online publisher and because the search methodology uses people, their content, and their network connections to produce search results with unprecedented relevance.

Both HP and Foundry Group seek and invest in “big ideas” that have the potential to transform the marketplace. Investing horizontally means looking at transformational ideas that can lead to opportunities in many industries. For high-risk research and venture investments, choosing horizontal areas is a better risk management strategy for three reasons. First, it makes success less dependent on adoption of the idea within a given industry. Second, you avoid running into a major stumbling block, such as regulation or a big competitor, that could derail your success in a single industry. Third, it helps create agility by creating core innovations that can be adapted to a range of verticals, as needed. A horizontal approach lets you have more “irons in the fire” without being scattered. The grouping gives you a diversity of opportunity without the burden of a scattered approach.

Action:
* Aggregate and focus your R&D or project investment efforts into horizontal thematic areas
* Become an expert in those themes to seek out and nurture the big ideas
* Look for opportunities that cut across industries
* Avoid the temptation to be pulled in different directions that would dilute expertise or investment

For more information: HP Labs reports on its restructuring and open initiatives by Dean Takahashi

HP Labs’ eight theme areas

Foundry Group Theme Investing by Brad Feld

Silicon Flatirons Interview Series

Tags: agility, analytics, awards, Case study, core, HP, Innovation, investment, investment themes, R&D, research labs, risk management, transformational, underlying, venture capital

Point: Use technology to get real-time, full-time feedback from users

Story: Designing new products seems like a guessing game: which features do users want? In the early days, engineers had to guess. Then came market research: asking people which features they’d like to have or which they prefer from among the choices. Of course, users often have difficulty articulating what they want.

Next, some companies hired ethnographers to observe users in action. Software maker Intuit, for example, sent software engineers to watch how users tried to use accounting software. Intuit’s QuickBooks succeeded because its developers had watched users struggle with traditional accounting software and solved the difficulties they were having.

Other companies built usability labs, which have the advantage of measurement but are in controlled settings. Ethnographic techniques and usability labs improve upon market research, but they are expensive and can only watch a small sample of users for a short time.

Now, technology lets companies go one better. Software companies who host their applications in the cloud can see what customers are doing – in real time, all the time. They can see which features really get used and which don’t. They can notice if users hit the “undo” button frequently, which suggests that the feature isn’t doing what users expect it to do. Sam Shillance, co-creator of Writely, found that what users of his word processing tool wanted most was a way to let several people edit a document together. (The Writely app was bought by Google and is now in Google Docs). Finally, as new types of users adopt the product or as new uses arise, developers can continue to adapt their software from the stream of feedback of usage patterns.

Action

• Think about how you can put more of your product or service? on the web or in cloud media so that you can watch user behavior.
• Look for evidence of frustration (e.g., use of “Undo,” help requests, problem reports)
• Watch which features users use first, and keep those simple. That will make your product easy to adopt and will reduce first-use frustration.
• Improve the functionality of the most-used features.
• De-emphasize (or rework) the least-used features.

For further information: The Netbook Effect by Clive Thompson

Tags: customer-centric, ethnographic, evaluate, features, functionality, measurement, software, usability, web

Point: Use publicly-available photos to shed light on tourist delight

Story: Barcelona invested heavily to revamp the city to attract tourists for the Olympics and beyond. What places did tourists visit? What did they see and like? What did they tell their friends about? The city can measure tourism dollars, but the intangible experience of pleasure is harder to measure.

The Los Ojos Del Mundo (The World’s Eyes) project helps provide some answers. The project looks at the publicly-available photos on Flickr that people post of Spain. Using data mining and visualization techniques, team members from MIT’s SENSEable city lab plotted photos onto a map of Spain. The concentration of photos shows which places tourists deem most photoworthy and want to share with their friends.

Action: Consider what data is publicly available on your product, brand, or city. Flickr, Twitter and blogs are all rich sources of user-generated photos, opinions or reviews. Analyze which features or aspects of your product are displayed or mentioned. This data helps reveal how customers portray, experience or feel about your product.

For more information: See Los ojos del mundo (the world’s eyes) for full information on the project as well as additional photos, courtesy of http://senseable.mit.edu/worldseyes/press.html
Girardin, F., Calabrese, F., Dal Fiore, F., Ratti, C., and Blat, J. (2008). Digital footprinting: Uncovering tourists with user-generated content. IEEE Pervasive Computing, 7(4):36-43.
Girardin, F., Dal Fiore, F., Ratti, C., and Blat, J. (2008). Leveraging explicitly disclosed location information to understand tourist dynamics: A case study. Journal of Location-Based Services, 2, 1, 41-54.
For more on creative design and the field of information visualization: Information Aesthetics

Tags: crowdsourcing, customer experience, customer satisfaction, data mining, data visualization, digital footprint, intangible, passive location logs, patterns, product review, publicly-available data, tourism, user-generated content, web-based