SOPHISTICATED FINANCE

The Trilogy of the Fourth Industrial Revolution--Nature-Design-Technology

My professional life revolves around entrepreneurship in its many forms, the Fourth Industrial Revolution--4IR (that the World Economic Forum correctly started heralding a few years ago) and how these two themes intersect around opportunity, wealth creation and social innovation. One of the devices to understand the 4IR is what I call the Trilogy, which was written about by Daniel C. Wahl in the very good article, "Facing Complexity: Wicked Design Problems". The Trilogy, which is a device to simplify the 4IR, is that this revolution can be understood as the convergence of nature-design-technology. Until today I would have said go away and study complexity science, artificial intelligence, bio-mimicry, slime mold, design thinking and 10-20 other concepts and then the Trilogy is obvious. Today I had a realization. 

Fashion represents the Trilogy. Please remember my twenty years in retail and retail consulting. Now one might argue that fashion has existed from before we left the caves (all of intellectual history beginning from the first drawing on a cave wall) and you would be correct. Remember, it could be that all of human history can be understood through the lens of the Trilogy-nature-design-technology (see this article on the Krebs Cycle of Creativity). Now back to explaining the Trilogy in terms of fashion.

 

Now almost everyone can understand fashion in terms of design, at least it is superficially obvious. Technology is much the same, with different fabrics and colors being the result of technology. Where it becomes interesting is when we consider the role of nature in fashion. Of course, nature is where we introduce the human-centric focus and that leads us to the drape of the clothing on the body, the equally important emotional engagement of the wearer and most importantly to the question of customer self-esteem. What the fashion example makes clear is that every consumer opportunity, product or solution should be considered in the terms of the trilogy, whether you were sitting outside a cave or a modern design studio. As you venture forth in the 4IR remember one does not understand fully until one can explain the issue or opportunity in terms of nature-design and technology.

 

Note: The Krebs Creativity Cycle is not obvious and takes awhile for people to appreciate its utility. I will do a followup post to explain its utility in more detail.

 

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Milton Glaser on Design

By Milton Glaser

 

In January 2013 I wrote in SF about Milton Glaser.

"Over the last few years I have become a student of design. I think it is the closest discipline to entrepreneurship and many principles of design are directly applicable to new business development. I have been reading Debbie Millman's new book, "How to Think Like a Great Graphic Designer " in which she interviews many of the great graphic designers of the late 20th century. Several designers defined design as the combination of strategy and intellect. Interesting that they omit art or creativity in the definition. Also noteworthy is that so many graphic designers moved on to do architecture and product design. The chapter on Milton Glaser is perhaps the best. The intellect of the man is quite exceptional."

In a recent Quartz article, Glaser defines design:

“Design is the process of going from an existing condition to a preferred one,”

Note the simplicity of the definition. 

A New Competitive Advantage

Part of the benefit of teaching is what you learn from the students. Yesterday in class one of my students made what I thought was an interesting observation. More and more companies are disrupting themselves. He said that the ability to disrupt your own company was a competitive advantage. In other words, consistently disrupting your own company is a unique input or expertise that satisfies the conditions for a competitive advantage. 

For those who forget how to define a competitive advantage, the definition is below.

1. Valuable--has significant value to the customer
2. Rare--not common
3. Inimitable--not copiable
4. Not Substitutable--there is no substitute

The expertise of disrupting oneself is similar to the expertise of designing airplanes for quick rebuilding. This airplane manufacturer can crash, rebuild and test again faster than their competitors. This expertise enables them to get to market faster. The self-disruptor is constantly identifying a smaller feature set that satisfies an unserved portion of the market. The ability to see the unserved need and match it with a feature set repeatedly becomes a competitive advantage. 

The more I think about this idea the more I like it. Imagine that you are running a food company. It might be easier to identify new products looking for ways to disrupt existing products rather than the more traditional ways used in the food industry.

 

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Learn from a Great Designer

A few years ago I had the pleasure to work with Yves Behar at fuseproject. He was the designer for the One Laptop per Child laptop and then the tablet (the project I lead). Yves has many talents, as would be expected from a world class designer, but what I always noticed was his unwavering focus on understanding the customer.

This story from the fuseproject blog, "On Crafting Wearability", makes the customer focus clear. I inserted the bold to show the insights about the customer in the reprint of the story below.

"Wearables represent an immensely excited and daunting design challenge. There are very few things, let alone electronic devices, that we wear on our bodies 24/7. In fact, we entered wearables because we felt that, in addition to our technological assets, the key to true success would be creating something inspired and unique -- something you would love to wear. Delivering on these principles is not easy. It takes time, commitment, invention; these combined with great engineering and never tried before manufacturing methods has led to a new collection of UP2 and UP3 offerings.

UP2, already the slimmest and lightest wearable on the market, has been reimagined with a new style strap, making it look even smaller on the wrist. The rope-like TPSIV rubber band with a polished metal hook is a new style that is extraordinarily comfortable and graceful. The open strap gives more breathability on the wrist, while looking complementary next to a watch or jewelry."

Would you have researched wearables well enough to draw the insights bolded above? I particularly like the insight about the wearable looking good with a watch or bracelet.

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Design Thinking Miami

(Concept from Stanford Design School)

Saturday I went to a workshop hosted by Design Thinking Miami. I went to see how some one else teaches design thinking. In 3.5 hours we went through an exercise to develop a new wallet for our "partner" in the workshop. I had about half the time, 1.5 hours, to interview my partner on his needs, ideate and build a prototype. My partner was a young design student and most of the people had professional reasons to be there. Two notable exceptions: a litigator who thought design thinking would be useful to lawyers trying to better understand the other party to the litigation and a mother (HBS MBA) who thought design thinking should be taught in elementary school. After a 30 minute conversation I am not convinced that we need design thinking in elementary school. Critical thinking will suffice. All in all, I recommend Design Thinking Miami events to anyone who wants to learn about the subject, brush up their skills or meet some people you don't see every day. 

I had one observation from the event. I prefer a slower pace to design thinking. Having five minutes to interview on needs or ideate solutions is not enough time, but it was done this way for the workshop. However, what I noticed is that all the novice design thinkers in a rush to complete the task in five minutes tended to refrain from criticizing or voicing prejudices. In a sense the fast pace made the novices more open minded and less critical, which is one of the key techniques in design thinking. One is more open minded when one is less judgmental. 

The takeaway: When you have to solve a complex problem, set a very fast pace for the process so people do not have time to be judgmental, if you are working with novices to design thinking. For more experienced practitioners, I recommend a more normal pace.

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Miami Service Jam This Weekend

"The Miami Service Jam is the local chapter of the Global Service Jam (GSJ) community. The GSJ is an annual 48 hour event where people in over 100+ cities get together to apply design thinking and prototype solutions for a common design challenge. Participants from all over the world interact over social media and upload videos of their prototypes to the GSJ website.  

 

This is a fun, volunteer run event open to anyone who wants to learn more about design thinking, connect with interesting people and build their creative confidence.

 

Website: www.miamiservicejam.com

 

Eventbrite: https://miamiservicejam2015.eventbrite.com

 

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Design Thinking Miami

Since 2012 I have posted about 40 articles on design thinking.

Yesterday I met with the Founders of Design Thinking Miami, Mariana Rego and Jessica Do. These ladies are evangelizing design thinking through a series of practical, hands on workshops that they do regularly. Mariana first studied design thinking as an engineering student at the University of Miami.

Mariana is also the Miami coordinator for Launch Code, a program to develop qualified programmers and place them in jobs at local companies. Mariana reports that 70 companies have signed up in Miami to take interns as the first step toward permanent positions.

Yesterday I also visited Entopsis at the Hialeah Technology Center. Entopsis is applying artificial intelligence to medical diagnostics in a very interesting new way. The Hialeah facility is a very nice location if you need a lab or light manufacturing space for an early stage company and the rents are comparatively low. Also, very convenient to the airport. 

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• Design Thinking
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• How to Manage the Uncertainty of Design

 

What Microsoft Learned about App Development that Google Needs to Learn

Perhaps because Google won a big contract to provide Office apps to PwC  (the large  international accounting firm), they have recently launched a PR campaign all over the web for "Google Apps for Work". An example of the PR is this Silicon Alley Insider story, "Google shares its plan to nab 80% of Microsoft's Office business". A sentence in the article caught my attention:

"Google is constantly looking at how people are using Apps and trying to entice them to use it more."

Google is renown for using data in its product analysis, which perhaps makes the above quote mundane. However, I think it points out the problem with Google's approach to software. Data only describes current usage. If we examine saving a file in Google Docs, Google sees it saved online, perhaps Google sees it downloaded to the computing device...but Google never sees it then saved in Dropbox. You might ask why someone would prepare a document in Google Docs and save it in Dropbox. There are probably ten good reasons, none of which show up in Google's user data. 

Microsoft recently launched a new Outlook app for iOS 8, which I tweeted :

Nine days later, I think that Outlook is probably the best mail iPhone app ever...and it includes a good calendar app. If the Outlook calendar app had appointment multiple alerts I would stop using a calendar app. What I particularly like about the app is the seamless integration with Dropbox and Google Drive, both of which I use daily. (Dropbox holds the docs I produce and Google Drive holds third party documents.) It also seamlessly integrates Gmail and other mail providers.

I am not a Microsoft fan boy. For many years I competed with them and I intentionally avoided their products. The only nice thing I could say about Microsoft was to my entrepreneurship students--"Microsoft is an excellent example of monopoly, which economists tout as an attractive business model". With the passing of time I have mellowed on Microsoft. (A tweet rather than a full blog post shows that I am still conflicted.) I tried the new iOS Outlook partly because in 25 years of using email, I have never found an email app on any device that I really liked until the new Outlook. However, let's get back to Google.

How was Microsoft able to develop such a great new mail app, while Google is still constrained by its data. The answer is quite simple. Most of the design and code for the new Outlook came through an acquisition, where the previous company was not constrained by the corporate mindset of a Google or Microsoft or F500.

I imagine when the Microsoft execs saw the other company's mail app, they just thought OMG and quickly bought the company. I commend Microsoft for admitting somebody understood the customer better and did a beautiful design. I wish Google would make some app acquisitions, get a better understanding of the user and perhaps learn more about UI design. BTW I use a lot more  apps from Google than Microsoft, but I hope that Microsoft's new acquisition has some new ideas for other apps. Today I am less hopeful about Google.

 

 

The Proof the Internet is Spawning more Informal Education

By: Candya Pradipta

Everyone recognizes the importance of globalization, in part brought about by the growth of Internet users. Finding new suppliers and lower cost suppliers for everything has become markedly easier in the last 10-20 years. The range of products and services has expanded from merchandise to parts to software development and tax preparation. Quality is still an issue as standards vary around the world but much progress has been made.

One area where standards have improved internationally is in design. Design quality around the world has risen markedly in the last ten years as sites such as ISSUU and Behance demonstrate. For example, in the 1990s nobody in Indonesia produced the quality of design work that Candya Pradipta regularly delivers. When I shared Ms. Pradipta's portfolio with my oldest friend in Indonesia (who attended Fashion Institute of Technology in NYC), she made an interesting comment:

"She's really Good!! The quality of design education in Jakrta and Bandung especially has grown by leaps and bounds!  The internet is the great leveller!"

I like that phrase, "The internet is the great leveller". The force that is leveling the field is the informal education one can gather from the Internet in the "creative arts", such as design, art, music and film. A good example is all the high quality content on design thinking. We all tend to focus on MOOCs and EDx and Khan Academy, but the much more powerful tool is just Google search in the hands of a motivated learner.

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Plan Less

I think it is debatable whether the best management thinkers today are at Santa Fe Institute (SFI) or the U.S. Army. Both groups share at least one common interest—complexity--as contrasted with the complicated. SFI's approach to complexity tends to focus on advanced mathematics. The U.S. Army's approach involves design thinking and is comparatively more understandable. Today's post comes from The U.S. Army Marine Corps Counterinsurgency Field Manual via the Farnam Street blog.

 

When should one plan? Much less often than you think. I am not advocating one go mindlessly through life, although it may be less stressful, but rather that one use alternatives to planning. A quote from the Field Manual:

 

"Planning applies established procedures to solve a largely understood problem within an accepted framework. Design inquires into the nature of a problem to conceive a framework for solving that problem. In general, planning is problem solving, while design is problem setting. Where planning focuses on generating a plan—a series of executable actions—design focuses on learning about the nature of an unfamiliar problem." (My emphasis)

Planning, a series of executable actions, applies in situations that are deterministic and likely to be expressible in numbers. Sales forecasting, architecture, engineering are some disciplines that are largely deterministic. Much larger are the domains that do not lend themselves to mathematical approaches, such as most things that involve politics, emotion and the arts. In these areas, design thinking is one peferred approach. 

 

If we consider managing a business, perhaps the startup effort to find product/market fit lends itself more to design thinking. Maybe growing a business from $30-100 million in annual revenue is more of a planning exercise, until you need to revamp a product, react to a monster competitor entering the market or adjust for a law change (think Uber). Actually most of the events affecting customers or products are not handled by planning. This type of event is not deterministic in nature. Design thinking and framing the problem correctly are a better approach, which is why you can plan less. 

 

Happy holidays.

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User App Login Issue

About two years ago I visited a friend in NYC who was part of a team doing a mobile shopping app. He gave me a link to download the beta app to my iPhone. To login to the app I had to use either my Facebook or Twitter account, both of which I had at that time. I asked him why I had to use either of those accounts to login and he told me that the company did not want users who did not have social media accounts. I said I thought that was a bit presumptuous, especially for a startup, but he assured me that the special login requirement would not affect customer adoption of the app. An historical note, the app never caught on and my friend moved to a different startup.

Yesterday I read a story, "Users Are Growling About Apps That Require Facebook", where they describe a dog app where you have to login with Facebook. Given that dogs are not allowed to have Facebook pages and friends (which I personally think is very unfair), the writer points out that requiring a Facebook login for a dog app is illogical. This story made me think of my friend in NYC.

If the login does not facilitate ease of use or increase the value of the app to the user, keep it as simple as possible. 

Image credit: thebarkpost.com

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Physics and Economics

A story at the Santa Fe Institute led me to this fascinating article, "Arrogant physicists — do they think economics is easy?". A few quotes from the article.

1. "This is precisely why many physicists, myself included, are convinced that modern economics is indeed, in an important sense, “held back because of a deficiency of mathematical tools and techniques”
2. "The economy is a vast and complicated set of arrangements and actions wherein agents—consumers, firms, banks, investors, government agencies—buy and sell, speculate, trade, oversee, bring products into being, offer services, invest in companies, strategize, explore, forecast, compete, learn, innovate, and adapt. In modern parlance we would say it is a massively parallel system of concurrent behavior. And from all this concurrent behavior markets form, prices form, trading arrangements form, institutions and industries form. … One of the earliest insights of economics—it certainly goes back to Smith—is that these aggregate patterns form from individual behavior, and individual behavior in turn responds to these aggregate patterns: there is a recursive loop. It is this recursive loop that connects with complexity. Complexity is not a theory but a movement in the sciences that studies how the interacting elements in a system create overall patterns, and how these overall patterns in turn cause the interacting elements to change or adapt. … Complexity is about formation—the formation of structures—and how this formation affects the objects causing it." Brian Arthur Complexity Economics
3. "To look at the economy, or areas within the economy, from a complexity viewpoint then would mean asking how it evolves, and this means examining in detail how individual agents’ behaviors together form some outcome and how this might in turn alter their behavior as a result. Complexity in other words asks how individual behaviors might react to the pattern they together create, and how that pattern would alter itself as a result. This is often a difficult question… And so economics early in its history took a simpler approach, one more amenable to mathematical analysis. It asked not how agents’ behaviors would react to the aggregate patterns these created, but what behaviors (actions, strategies, expectations) would be upheld by—would be consistent with—the aggregate patterns these caused. It asked in other words what patterns would call for no changes in micro-behavior, and would therefore be in stasis, or equilibrium." Brian Arthur Complexity Economics

Interesting notion that economics was in part defined by the math available at the time.

I also find the description of economics as a complex system one of the better descriptions of complex systems. This could, however, just be explained by the fact I understand more about economics than physics or quantum mechanics.

A related article from Santa Fe Institute.

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Leadership and Management

I recently heard a story first hand where HBS staff visited a high school in Mexico to evaluate how effective the case method was for younger students. To evaluate the students' learning, the HBS staff first question to the students was "what is the difference between leadership and management?" I wonder how many of the MBAs in the U.S. could provide as good an answer as the Mexican high schoolers who had been using HBS cases with their non-business teachers for five years.

According to an excerpt from a new book by John Kotter at HBS, "Accelerate: Building Strategic Agility for a Faster-Moving World",

• Leadership is "about setting a direction. It's about creating a vision, empowering and inspiring people to want to achieve the vision, and enabling them to do so with energy and speed through an effective strategy." Vision-Empowering-Strategic
• Management is "a set of well-known processes that help organizations produce reliable, efficient, and predictable results. Really good management helps us do well what we more or less know how to do regardless of the size, complexity, or geographic reach of an enterprise. These processes include planning, budgeting, structuring jobs, staffing jobs, giving people time-tested policies and procedures to guide their actions, measuring their results, and problem solving when results do not fit the plan. Process-Scale-Results

The theme of Kotter's book is that we have perfected management over the last century, but that leadership has not kept up with the changes in technology, information, globalization, etc. The vision and mission of organizations need to be update by the leaders to recognize the new environment. 

How do leaders deal with complex problems might have been a better theme. Management has advanced sufficiently to deal with simple and complicated problems, but it is not suited for complex problems. That is one reason that scenario planning and design thinking have emerrged as "new" processes. A comprehensive presentation of the various techniques and processes to deal with complex problems would have been interesting contribution to the leadership literature.

For the difference between complex and complicated problems, see this post.

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Summer Project

With the semester finishing in a few weeks, I am thinking ahead to what course(s) need to be revamped for the fall semester. Definitely considering my newest course, Entrepreneurship, Design and Thinking (EDT), for some serious re-work.

Parts of the course really worked well:

1. Design thinking (More on Design Thinking)
2. The e-book "Art of Design". My students were blown away by this book as much as I was. 
3. The Shell "New Lens Scenarios" stimulated a lot of original thinking from the students about the future

Willian Duggan's book "Strategic Intuition" was a book I really liked, but the students seem to have missed the point.

Someone has suggested that I make EDT a pre-requisite for my course in social entrepreneurship. I like this idea because the work on thinking and design thinking is excellent preparation before one tackles worldwide social problems. I also like the idea of having two years to teach some fairly complex subjects. 

Thinking the course project might be to explain how plants identify familial offspring and "share" with them without a brain or processor. Definitely a complex question suitable for design thinking and it ties in nicely with two topics--neuroscience and AI--that I plan to expand in the seminar. May be too tough a question for under graduates. Might be a good example to learn about how to approach impossible problems :)

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Seminal Thinking on Creativity

"The Act Of Creation is absolutely fantastic — necessary, even — in its entirety. It will change the way you think about everything, including thinking itself." Big Think

I have been studying creativity for about three years. This quest began after the simple realization that a process or heuristic is only as good as the thinker. So how does one think better, which really means more creatively. Early on I realized that Einstein explained creativity correctly as a combinatorial process. Effectively all new ideas are just combinations of old ideas rearranged. It has to be that way. It's obvious if you "think" about it. 

I took to explaining creativity as a slot machine where when the three apples line up, out pops the creative idea. Metaphor is not my strong suit so I was very pleased that I had a metaphor to explain a complex subject--creativity. Today I found out that Arthur Koestler used the same metaphor in 1964 to explain creativity in The Act of Creation. Big Think calls the book the seminal work on the "anatomy of creativity". More on Koestler, creativity and thinking is in this Big Think story, "How Creativity in Humor, Art, and Science Works: Arthur Koestler’s Theory of Bisociation". Well worth reading in its entirety.

Studying creativity changes the way you understand thinking and the way you think. Readings on creativity, like philosophy, should be a required subject for college students.

 

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New Duarte Presentation Guide

Nancy Duarte is one of the premier presentation story tellers in the world. For example, she did Al Gore's Ted Talk on the environment. Coincident with this week being Ted 2014, she has released a web-based guide for effective presentations that have the ability to "change the world".

The guide is called Resonate. One could easily teach a whole course on presentation, storytelling or screenwriting from Resonate. Nice discussions of creativity, emotional engagement, empowerment and the ancient Greek's view on all these subjects. 

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Thoughts on Google Glasses

Everybody I met last week was talking about Google Glasses. Rare that my week is so heavily themed, but it must mean something. One person said that everyone will buy them when they go mass market at $400 sometime in 2014. 

A few thoughts on Google Glasses:

1. Hat advertising will become big as everyone runs facial recognition software through their glasses; hint: all the logo images captured by Google
2. People will realize that visual recognition software works on body parts besides the face.
3. Porn viewing (and all video) will further increase as Google Glasses permit private viewing everywhere.
4. As soon as Google Glasses have full phone functionality, phones will go away to wherever the Palm Pilot went; personally I cannot wait for that day.
5. Google Glasses for pets will be a market with owner and pet glasses paired.
6. Big business applications for Google Glasses where images and "hands free" meet, e.g. surgeons

Shouldn't be long before professors ban Google Glasses in class. Silly professors.

AND A HAPPY NEW YEAR TO ALL!

 Image credit: http://www.stoneforge.com

 

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An Insight on Thinking from the iPhone 5S

This morning I had breakfast with a successful young businessman who a few years ago graduated from Yale. Suffice it to say, a very smart guy.

While he went to pick up some food, I noticed his brand new iPhone 5S. I have not spent much time with the phone so I figured I had a few minutes to check it out. As soon as I brought up the home page I stopped exploring the phone. This man's phone was organized so differently from my iPhone that I started thinking about why it was organized so differently. His phone had many, many different collections of apps organized into boxes labelled "productivity", "business", etc. and did not even use the second home page for apps. Each box had about ten individual apps inside. When he returned with his food, I asked him why he organized his apps the way he did. He first answered that he did not like to flip through pages to find apps, but that could not be the real answer because we all flip pages constantly on our iPhones. I suggested to him that the way he thinks is using frameworks. He fits new ideas into existing frameworks. The "productivity" box was a framework. Framework thinkers excel at analysis and deductive thinking.

My iPhone uses multiple home pages and almost no boxes to collect related apps. That form of organization suggests to me that I am more of a pattern recognition thinker (individual icons match to the app) and not passionate about a subject, such as music. Pattern recognition normally suggests more creativity and inductive thinking. I must be the exception that proves the rule.

One of the smartest people I know has an iPhone home page that is almost evenly balanced between boxes of apps and individual apps. The boxes all have many apps inside. She excels at problem solving and operations.

Three data points do not establish a valid theory. More research is required to prove me correct about home page organization reflecting thinking styles or strengths. However, the next time you interview a new hire candidate, perhaps you should ask to see their phone. Note: A mix of boxes and individual apps on the home page, but where the boxes have few apps inside, probably suggests a lower quality thinker. Only one box filled with many, many apps probably signals a person's passion, which may or may not be consistent with job requirements.

Comments about how you organize your phone home page and what kind of thinker you are can be posted below.

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Motorola's Project Ara Joins Phonebloks Movement.

About a month ago I wrote a story,"Phonebloks: Absolutely the Coolest Geek Idea of 2013". Today Fierce Wireless published a story that Motorola's project Ara is joining the Phonebloks' movement. Setting aside poetic license, I love the idea of a Phonebloks "movement". Every great idea should target the status of a movement. Martin Luther King, One Laptop per Child and the early days of PCs, to cite a few examples, all achieved the status of a movement. Perhaps Google's ownership of Motorola was all that it took to go from "crazy idea" to a community and soon a movement.

For those of you who do not memorize SF blog posts (which you should), let me remind you of Phonebloks. Phonebloks is built on the idea that instead of upgrading a phone by buying a new one, one could merely purchase upgaded components (screen, processor, wi-fi antennae, etc.) that would snap on to what Motorola calls an endoskeleton. Every phone would become reparable or upgradeable at a fraction of the current cost. 

Now that Google has announced replaceable component phones, Samsung will soon come out with their take on the Phonebloks concept. Like the popularity of open software, perhaps this new variation of open hardware will inspire upgradeable TVs and printers. Just the reduction in carbon emissions from shipping parts rather than new units should motivate us to support the Phonebloks idea. Perhaps we will even see the return of electronics repairmen to swap out compnents for those of us challenged in the physical world. Turning IT into a components design and manufacturing business (ignore operating systems for the moment) would probably lead to the breakdown in the industrial clusters in China and the return of manufacturing jobs to the U.S. If most applications move to the web because of ubiquitous Internet connectivity, the complexity of computing devices including phones could be simplified. This would result in the simplification of operating systems and a reduced requirement to re-write for new components.

I pre-ordered a Palm Pilot and the first Blackberry with voice. I think a phone based on the Phonebloks concept could be a change of similar proportions.

 

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Phonebloks: Absolutely the Coolest Geek Idea of 2013

Today's post was inspired by an article I found on Google+. If you have a bit of the geek in you, you should use Google+. The Math Group is particularly good.

All the business/tech news recently is about Apple's new 5S phone. For a gazillion dollars you can have a better processor, a better screen, a better camera and a few other new features. If we look at the real benefits of the new phone, the new processor maybe cost $15, the new screen about $25 and the camera let's generously say $10. Adding a generous 40% gross margin, the total value of the three new features was around $80. However, a purchaser will actually pay a gazillion, which is a lot more $80.

Why can't we just buy the new components and plug them into an existing iPhone? Two reasons:

1. The iPhone (and every other mobile device) is not designed to be repaired by the owner
2. Nobody sells individual components for mobile devices

(If you are wondering why you never asked yourself this question, read this article on functional fixedness.)

Less you think I am crazy, a new project is being launched to addreess repairability and individual component sales in mobile devices--PhoneBloks. Think of lego blocks embedded with the major components of a mobile device. Want to buy a new screen, just buy that Lego block. Want the latest wi-fi antennae, just buy that block. See the picture below.

Now the phone may not be pretty enough for celebrities and those who go clubbing on South Beach, but for those of us who only upgrade our devices when the old one dies or a new version of the operating system has terrific new features (which in my case has never happened with a phone), a Lego block phone might actually get me to upgrade....a component. Follow PhoneBloks. It's a very cool idea.

Note: If Microsoft wanted to gain share in phones and tablets, this is a bold strategy that might work. Talk about disruptive!!

 

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