Tag: disruptive innovation

• How new technologies spread (and what that means for superstar cities)

  We know that innovation and economic growth tends to be unevenly distributed. This is the bull case for living in cities and, more particularly, for living in certain cities. But of course, the big question these days is whether or not our little work from home experiment has proven that, for the first time ever, work can now decentralize.

  Well here is a unique study that looked at 29 disruptive technologies over the last two decades in the United States. Using three main sources — patents, job postings, and hundreds of thousands of earnings calls — the team traced where new innovations/technologies have tended to emerge and then how they spread (or didn’t spread) across the rest of the US.

  Their initial findings won’t surprise regular readers of this blog. There are indeed a certain number of pioneering superstar cities. Within their list of new disruptive innovations, the team found that about 40.2% of them came from California. The next “super-cluster” was along the Boston-Washington corridor in the northeast with ~21.2%. By narrowing down their list to “disruptive patents”, as opposed to all patents, innovation looks even spikier.

  

  Next the team looked at how these disruptive technologies tend to diffuse across the country. This is where job postings and earnings calls come into play. New technology gets created in California garage. Cool. But at what point do CEOs across the country start talking about it and hiring people who are capable of doing things with it? This next figure shows that diffusion at various time intervals.

  

  Now here are the important takeaways. New disruptive technologies clearly take time to spread. However, high-skilled hiring tends to spread much more slowly than low-skilled hiring. This kind of makes sense as you’ve got a built up and entrenched knowledge base in these pioneering locations.

  But what this also means is that pioneering locations tend to maintain their hegemony for quite some time — decades. The high-paying jobs stick closer to home for much longer, presumably because geography makes it harder to transfer knowledge. This is, of course, based on historical data. But I remain highly suspect that Zoom calls can really disrupt the importance of our superstar cities.

  Maps: Vox

  2021.08.15

• The “job” of a McDonald’s milkshake

  Management guru Clayton M. Christensen died this week. Sadly, he was only 67 (leukaemia). A professor at Harvard Business School, Christensen was best known for probably two things: His work on disruptive innovation and his teachings on how to live a more fulfilling life. If you’ve read anything on innovation and disruption, I am sure you’ve come across the work of Christensen. He had a way of explaining things by reframing them. Here is a short video about the “job” of a McDonald’s milkshake. And here is another one where he explains the cycle of disruptive innovations, sustaining innovations, and efficiency innovations. Both videos are worth watching.

  2020.01.24

• Business model innovation

  Fred Wilson has a great post up on his blog today about open protocols. By open protocols he is referring to things like TCP/IP (transmission control protocol and internet protocol), HTTP (hypertext transfer protocol), and SMTP (simple mail transfer protocol). Whether you realize it or not, you rely on these protocols every single day if you go on the internet, browse the web, and write emails.

  If you’re interested in these sorts of nerdy things, I recommend you read his post. I’m not going to write about open protocols today – though I do find them fascinating. Instead, I would like to talk about the last paragraph of his post. 

  Here it is:

  “I believe that business model innovation is more disruptive that technological innovation. Incumbents can adapt to and adopt new technological changes (web to mobile) way easier than they can adapt to and adopt new business models (selling software to free ad-supported software). So this new protocol-based business model feels like one of these “changes of venue” as my partner Brad likes to call them. And that smells like a big investable macro trend to me.”

  This is interesting to me for 2 reasons.

  First, business model innovation is incredibly powerful. Once a company has built itself up around an existing model, it can be painfully difficult to change. Imagine you have a 200 person sales team that would become unnecessary should you pivot your business model. Are you going to fire them and make the switch?

  This is also one of the reasons why some tech companies can exist for so long before they make any money. Sometimes – but not always – it’s because the investors believe that if the company has users, attention or whatever it may be, that they will figure out a way to monetize them/it. And maybe, just maybe, it’ll be a business model that no one has ever thought of before.

  Second, look how he is publicly sharing his investment thesis. Why would he do that? Shouldn’t he just go off and do it and not tell anyone? Clearly, he too believes that there’s greater value in being open and transparent.

  2016.07.31

• Introducing Tech:NYC

  Following the lead of San Francisco, a new non-profit, member-supported organization for New York tech companies has just launched. It’s called Tech:NYC. Here are their goals, taken from this blog post:

  Tech:NYC’s primary goals are to support the growth of the technology sector in New York City, to increase civic engagement by leaders of the New York tech community, and advocate for policies that will attract tech talent, jobs, and opportunity to NYC.

  Tech:NYC will advocate for policies that: 1) underscore a regulatory environment that supports the growth of technology companies and technology talent in NYC; 2) promote inclusivity; and 3) ensure access for all New Yorkers to connectivity, technology tools, and training.

  What makes something like this important is that many public policy issues are now rooted in the tech sector. Think about all the debate regarding ride-sharing, home-sharing, drone regulation, contract employees, and so on.

  But what is also clear is that many cities are struggling to deal with these issues. As I’ve argued before, just saying no to innovation that doesn’t fit neatly into our currently regulatory boxes is often shortsighted. 

  So how do we put in place policies that deliver the right results and that are balanced? How do we grow the tech base while at the same time managing the disruptive fallout? That’s what this group hopes to do.

  And it strikes me that every big city could likely benefit from an organization like this.

  2016.05.03

• A revolution in personal mobility

  

  In the spirit of Startup Weekend, I thought it would be interesting to go back in time and pretend to pitch one of the most disruptive innovations of the 19th century: the automobile.

  Typically pitches start by first outlining the problem. The idea is to make your audience aware of the pain point, so that they feel excited when you ultimately pitch your solution.

  In the case of cars, the incumbent technology would have been horses. So I can imagine somebody standing up and talking about how horses are slow and how they drop stinky poo all over our city streets. And that the time has come for a revolution in personal mobility! Enough of this crap! 🙂

  But while many of us probably can’t imagine a world without cars, try and put yourself in the shoes of somebody at the end of the 19th century who can’t imagine a world without horses. And then think about all the things we have subsequently done to make cars thrive:

  • We paved roads and created networks of freeways.
  • We invented rules of the road to ensure that people were operating these new devices properly.
  • We created a licensing system to ensure that anybody who was operating a car was doing so relatively safely and following the rules that had been created.
  • We created schools that taught people how to be better drivers.
  • We started insuring cars for when accidents inevitably happened.
  • We started having to accept fatal car accident and pedestrian deaths.
  • We built networks of gas stations. As of 2004, there were 168,000 retail locations selling gas in the United States.
  • We had to give over large land masses to parking. In fact, we reorganized entire cities so that the car could be better accommodated.
  • And we setup government transportation divisions to make sure the needs of the car were always being met.

  This is a long list of things we had to do to make cars possible and I’m sure there are many others that I have missed. Today, we all know how disruptive cars have been and we’re certainly questioning many of the things we have done. But we also accept this list as being largely normative.

  However, before they were the norm, they were insurmountable challenges. How will we teach everyone how to drive these new cars? How will we minimize accidents? How will we make it easy for people to refuel their cars? Where will people store them when they’re not using them?

  There were a lot of moving parts to figure out. 

  Which is why people like Paul Graham have argued that the best ideas almost have to live in your unconscious mind. Because your conscious mind would simply reject them as viable options as soon as you started thinking about all the required moving parts. I guess that’s why they say there’s a very fine line between crazy and brilliant.

  Image: Benz Velo

  2014.11.25

• Disrupting everything

  Last year when I started working on Dirt—which was really my first startup—I had a number of people say things to me like: “Wow, that’s quite a change, going from real estate into tech.” But that’s not the way I saw and see it.

  I don’t think you can silo industries like that anymore. Technology is touching everything. Some would even go so far as to say that every company in the world is, or will be, a software and technology company.

  The way I looked at it was that I was starting a technology-enabled real estate company. I was hoping to leverage the internet to improve the way things are done in an existing industry. Of course, by improve I really mean disrupt—which is arguably the biggest buzzword in the tech community today:

  “Disruption is not so much a trend as an especially lucrative world philosophy favored by technophilic entrepreneurs. It’s the only path towards progress. If you’re not disrupting something you might as well go collect kindling and roast raccoon meat in the hills of Cupertino.”

  A good example of how disruptive innovation is reaching all sectors of the economy, including government, is the New Haven-based startup called SeeClickFix (which I discovered via This Big City). What it does is allow citizens to report non-emergencies (like potholes) to their local government. Governments can then respond and manage these tasks. (Sorry Rob Ford. Now you don’t need to return all those phone calls.)

  But moreover, I think it shows that technology is not only going to disrupt business and industry, it’s going to disrupt the way cities function and the way we live. I don’t know what that’s ultimately going to look like, but I can already feel it underway.

  Albert Wenger, of venture capital firm Union Square Ventures, recently argued—in a talk at DLD—that we are still in the midst of a transition from the Industrial Age to the Information Age. And I buy that. With every new disruption, we’re one step closer to completely making that transition. But we’re not quite there yet.

  The Industrial Age drove people out of cities. It made cities dirty and undesirable. But in the Information Age, cities are damn important and it’s where people want to be. Look at all the people rushing back to urban centers.

  So if technology has the power to disrupt business, industry, and cities, I suggest we stop just thinking about technology in isolation and remember the powerful words of Marshall McLuhan: “The medium is the message.” Don’t just focus on the obvious or you’ll miss a tidal wave of change happening beneath the surface.

  2014.02.13