Is Your Company As Disruptive As MakerBot? Unlikely.

I don’t think many people are looking at MarkerBot right now and thinking “Damn that company is disruptive!”

But they should be.

MakerBot is the Brooklyn-based startup that makes open source 3D printers. 3D printers are “printers” that you can print physical, three-dimensional objects with. Objects like plastic busts of people’s heads. MakerBot’s goal is to “bring desktop 3D printing into the home at an affordable price.”

People look at MaketBot and see a lot of things. They see a cool, if somewhat esoteric product, made by Brooklyn hipsters. They see the funny projects that they do, like sending a bust of Steven Colbert’s head into space. They don’t see disruption right away.

But I’ve always thought they were future disruptors, and then last night I read somewhere that Jeff Bezos invested in their last round, and that confirmed my suspicions.

Jeff Bezos is like a shark with disruption: he can smell it six miles away. Where disruption is, he is.

All of that investment from Bezos et al isn’t to fund cool, hipster films of busts going up into space. Well sure, it is actually, in the short term. But in the long term, people are betting that MakerBot is going to disrupt something huge. Not just an industry, but INDUSTRY itself.

As in: where do you go to get things fabricated?

Right now you go to China. That’s the cheapest place in the world to fabricate, because you don’t have to worry about pesky things like liveable wages and working conditions. (At least not to the degree you have to somewhere like Detroit).

But imagine if you didn’t have to even go to China at all – imagine if it were cheaper than that, if you could just pop something into your printer and make it in your home?

That’s what MakerBot is working on. At the moment you can only do little things, and they aren’t all that strong. And you can’t whip off 1,000 while you go down the street for coffee.

But the idea, I’m sure – and this is where the disruption comes in – is that in five or ten years, the technology will have grown enough that you can do all of the above – make big, strong things, enterprise-level things, create a huge bunch of them.

And at that point, who needs China, or Detroit for that matter? You can make close to anything out of your bedroom, for the cost of the materials. (That’s assuming you have the technical know-how).

This is the way a lot of disruptive ideas start off. Very limited in scope, to the point of being considered toys. The telephone could only make calls between people two blocks away at first. Useless, the telegraph companies thought. Then it kept getting better and better. Pretty soon it could connect everyone in a town. Then long distance came in. Within 20 years, the telegraphs were gone.

Will that happen with 3D printing? Jeff Bezos clearly thinks there’s a good chance.

But the point is: I can’t think of many companies out there that have the potential to disrupt as much as MakerBot does.

Posted in Disruption, Entrepreneurs | 3 Comments

Why “Smart Cities” Wont Stop Global Warming – And May Even Accelerate It

Those of us who like to think about city-scale innovation also like to think that it is somehow going to lead us away from our carbon-abusing ways towards a new world of sustainability.

Well I’ve got some bad news: it’s not. Sorry to say it.

Civic innovation and “smart city” technology is going to do a lot to make cities more usable. But it isn’t going to help us solve the global warming conundrum. In fact it may even make it worse, accelerate the problem.

That’s right – all of those apps, all of that open data, all of those super-cool realtime traffic alerts, all of the things that make the system work better – they may actually making carbon output worse.

How?

There’s a little-known idea called the Khazzoom-Brookes Postulate (that name probably explains why it is so little-known), that explains it like this: increasing efficiency in any macro system has the unexpected effect of also increasing demand in that system over time. Basically, making a system more efficient makes resources in that system cheaper, which in turn makes using those very resources more economical and attractive to others, who then end up using more resources than they did before.

When things get more efficient, they get cheaper to everyone. And when things get cheaper, people respond by consuming more of those things than they did when the cost was higher. You end up back where you started, or worse. It’s a boomerang effect.

Let’s take a real-world example:

Say you build and launch an app that makes it easier for people to carpool. And say it actually works, and 10,000 people stop driving and instead share rides with others to work as a result. You’ve made the commute system more efficient – less energy spent to get people to work in the morning. Carbon output goes down. Great.

But a secondary effect of taking 10,000 people off the road is to create more space on the freeway during commute hours. The “cost” of driving, in terms of time, goes down for other people and businesses. That incentivizes them to fill up that space themselves. Even if they didn’t plan on using that space originally, they now think about using it – it’s a resource that was formerly expensive and is now suddenly very cheap. Some may decide to switch from taking the subway to driving, because it’s suddenly so easy to drive (extra space!). Others may be businesses who decide to open a new delivery route and make more money, because the lighter traffic presents an opportunity for them.

When all is said and done, according to Khazzoom-Brookes, you may very well have more than 10,000 people replacing the 10,000 free spots on the freeway created by the app. Your app to get fewer people driving has led to more people driving.

This goes on across every vertical, in every nook and cranny that you may be trying to improve. Making the system more efficient encourages people to use more resources, which pushes use of the system even higher.

This may be why, despite the fact that our cities are quickly getting smarter and more efficient than ever, 2010 saw the biggest single-year increase in global carbon output in history, what one scientist called a “monster” increase in emission.

None of this is an argument against making cities more efficient. Cities need to become more efficient, absolutely. But it is to say: efficiency is good for a lot of things, but it isn’t good for reducing carbon output.

What is good for reducing carbon output? Three things: legislation, behavior change, or clean energies. Or a combination of all three.

Maybe these things should be considered as part of a broader “Smart City” strategy as well, if we want cities to really be Smart?

Posted in Cities, Disruption, Innovation | 2 Comments

Banks: The Disruption Begins?

I wrote a few weeks ago about how banks were setting themselves up to be disrupted by introducing all sorts of extra fees for their customers and basing their business on services people didn’t need.

Now, just a few weeks later, 35,000 people have closed their accounts with major banks and put their money into Credit Unions, as a protest against customer abuse.

That’s certainly one kind of disruption – consumer-driven disruption. And it happened pretty quickly after I blogged that, no?

I told you the time was ripe, but I didn’t realize it was THAT ripe.

But I still think the path is clear for another kind of disruption to happen in banking – a business-driven disruption, where some smart entrepreneur realizes that banks today provide customers with WAY more service (and the fees that go with them) than customers really want or need. And that you could offer a smart alternative that offered a fraction of the services, with a fraction of the fees.

Someone could come along and say, “look, a good bank today really amounts to a couple of things: Cash machines everywhere (so you don’t have to pay fees to get money wherever you go), a good website, and the ability to talk to a human on the phone.” Forget branches, forget tellers, forget savings accounts, forget all of the other services banks offer. Banks, for most of us, are basically just glorified ATMs. A place to put the cash you’re planning on spending before too long, and an easy way to get that cash out. Just offer a checking account, lots of ATMs, and a good website. Plus a human on a phone, if you need one.

And no fees.

And for good measure, you do a deal with the smart phone makers to allow for NFC debit purchases, when that technology finally arrives.

If you do that, you disrupt banking with a new business model. One that focuses on eliminating the “value added” fluff that banks love (because it makes them all of their money) but which still serves 80% of the peoples’ needs (or is it 99%?) without the fees.

I’d use that bank.

Of course, I enjoy customer-driven disruption too, so seeing 35k people switch to credit unions in protest is satisfying for me. But I do expect to see that new bank model come along before too long. There’s just too much discrepancy between what banks are providing, and charging for, and what customers really want.

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Innovating On The Web These Days Is Like Creating a Better Bumper For A Ford Explorer

I wanted to pull this out of my previous post and make it its own post:

Increasingly, innovating on the web is like creating a better bumper for a Ford Explorer. And sure, Ford Explorers need better bumpers (they always do!), but that’s not what I got into the web for.

Are you working on the Ford Explorer these days?

Wouldn’t you rather be working on the thing that is going to replace the Ford Explorer?

What is that thing?

How can you get to work on it?

Posted in Disruption, Entrepreneurs, Innovation | Leave a comment

Appetite for Disruption

I’m going to come clean: I’ve got an appetite for disruption.

And it seems to be growing.

Day by day I’m becoming ever more interested in the notion of disruption. Increasingly, I find myself looking for areas that are ripe for disruption, and within those areas, looking for the particular thing that could be the disrupting factor.

When I read news articles or blog posts or Tweets, I’m constantly evaluating the information along the lines of disruptive vs not disruptive.

It’s like I’m developing this tiny little disruption filter in my brain.

And on the other hand I’m less and less interested in plain old innovation. Even innovations that are ground breaking are less interesting to me these days, if they’re not disruptively ground breaking. If they don’t somehow challenge the status quo of their field while breaking ground.

I don’t know why this is. It’s just something that has grown in me over time.

Maybe it’s because, as I said in my last post, the web is not very disruptive anymore. Up until fairly recently, the web and disruption went hand in hand. If you were innovating on the web, chances were you were also disrupting something, even if you didn’t know you were. So in just thinking about the web, you were also thinking about disruption.

Now that’s no longer the case.

Increasingly, innovating on the web is like creating a better bumper for a Ford Explorer. And sure, Ford Explorers need better bumpers (they always do!), but that’s not what I got into the web for.

So I find that as the industry around me, my field of choice, becomes less and less of a game about changing the game, I become more and more attuned to the blips on the radar that are in fact game changing — or to the opportunities, as I see them, for changing games one way or another. Regardless of whether those opportunities are related to the web or not.

It’s kind of liberating in a way – I feel the disruptive impulse in me is being freed from only thinking in terms of the web. I’m taking the blinders off and looking at the whole field of play, not just one aspect of it.

Are you feeling this way also? Or is it just me?

Maybe this is a passing interest, a blip on my own radar, touched off by reading some article or other. Maybe I’ll go back to thinking in terms of innovation and web startups and cities and in another week or so.

Or maybe this is the new level of focus for me, the point of engagement with new ideas around me from now on.

What about you? Are you finding yourself these days with an increased appetite?

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Let’s Face It, The Web Just Isn’t Very Disruptive Anymore

We’ve all grown up in a time when to do anything on the web is to be disruptive. Writing? On the web? Disruptive. Finding a date? On the web? Disruptive. It’s been going on for so long that we sort of think the web is disruptive, just by virtue of its DNA. Anything + web = disruptive.

And for most of our lives, that has actually been true. But over the past decade the notion of the web as disruptive has been quietly shifting. There’s still plenty of innovation happening on the web, but more and more those innovations are sustaining rather than disruptive. In other words, they make some existing company’s position stronger within an industry, rather than upsetting the entire industry.

The web is growing up. It’s no longer a gun-slinging frontier town where someone can come in with nothing more than a good idea and turn that into an empire.

Startups these days are less likely to blow up and become billion-dollar giants on their way to IPO, putting entire companies out of business along the way. They’re more likely to get acquired by some existing company early on (albeit sometimes for a hugely inflated valuation), or to be squashed entirely by a larger company that sees the value in what they’re doing and decides to copy it (as Facebook and Google do on nearly a daily basis).

There are disruptive ideas and opportunities out there – lots of them. But more and more, I see disruptive ideas that aren’t actually web ideas at all (like accelerators and co-working). Or if they are on the web, they include some major non-web component (like the coming disruption of banking). There are exceptions to this of course – AirBnb jumps to mind as one of them. But overall, the trend in disruption on the web is a downward one.

This should come as no surprise really. A gigantic industry has grown up around the web in our lifetimes. All of those huge companies want to grow and increase their revenue streams, and new web innovations are their power food for getting there.

But we haven’t really recognized this. Like the myth of the gunslinger in the wild west, the myth of the web entrepreneur starting a simple app and turning it into an industry-crushing behemoth lives on long past whatever truth lies behind it.

So if the web and disruption are parting ways, which way do you go? Do you stick with the web, innovating in increasingly industry-sustaining ways? Or do you look beyond the web and look for new ways to disrupt industries that may or may not include the web at all?

I guess that all depends on who you are, what you do, and what your appetite is for.

Posted in Disruption, Entrepreneurs, Innovation | 3 Comments

The Difference Between Steve Jobs and Bill Gates?

The whole world is eulogizing Steve Jobs today, on Twitter, in the media, in cafes, everywhere.

On the alumni list for ITP, the NYU grad program I went to, someone wrote in about an encounter he had with Jobs:

I asked him, “if you could talk to yourself from 20 years ago, what would you talk about?”  and he replied, “women” without missing a beat.

I thought this was funny in contrast to an exchange I had when I met Bill Gates several years ago:

I asked him, “what would you have done if you hadn’t started Microsoft?” he thought for a second and replied “Good question – I probably would have gone into economics.

It occurred to me that maybe that was a good way to think about Steve Jobs versus Bill Gates: Jobs driven by people and finding out what makes them tick, Gates driven by numbers and equations, and, well, economics. Jobs expressing his interests by creating a suite of lifestyle devices tailored to people’s everyday lives. Gates expressing his by creating an operating system that took over the world and office suite products that went on every computer in every company everywhere.

Kind of the opposing forces of the golden age of computers.

Does that hold any water? I can’t really say as I don’t (didn’t) know either men. But from way over here in Brooklyn, NY it seems like it could.

Posted in Entrepreneurs, People | 2 Comments

Wall Street, Bananas, and the Warlike Chimp

Still thinking about yesterday’s post on how Open is Dead, I took a short trip downtown today to check out and participate briefly in Occupy Wall Street. While I was there, I was reminded of this passage from the book Sex at Dawn (excellent book, a must-read). The passage is about Jane Goodall’s research with the (supposedly) warlike chimpanzees in Africa.

(Margaret) Power noticed that data Goodall collected in her first years at Gombe (from 1961 to 1965) painted a different picture of chimpanzee social interaction than the accounts of chimpanzee warfare she and her colleagues published to global acclaim a few years later. Observations from those first four years at Gombe had left Goodall with the impression that chimps were “far more peaceable than humans.” She saw no evidence of “war” between groups and only sporadic outbreaks of violence between individuals.

But Goodall’s impression of relative harmony was to change — not coincidentally, argues Power — precisely when she and her students began giving the chimps hundreds of bananas every day, to entice them to hang around the camp so they could be observed more easily.

In the wild, chimps spread out to search for food individually or in small groups. Because the food is scattered throughout the jungle, competition is unusual. But, as Frans de Waal explains, “as soon as humans start providing food, even in the jungle, the peace is quickly disturbed.”

Before the scientists started provisioning the apes, food appeared throughout the jungle, so the chimps spread out in search of something to eat each day. Chimps often call out to the others when they find a fruiting tree; mutual aid helps everyone and feeding in the forest isn’t a zero-sum endeavor. But once they learned that there would be a limited amount of easy food available in the same place each day, more and more chimps started arriving in aggressive, “noisy hordes”, and “hanging around”. Soon after, Goodall and her students began witnessing the now famous “warfare” between chimp groups.

Perhaps for the first time ever, the chimps had something worth fighting over: a concentrated, reliable, yet limited source of food. Suddenly, they lived in a zero-sum world.

Did you get that? It was the bananas that made the chimps warlike.

I feel like we’re all just chimps, hanging out in noisy hordes trying to get the bananas out of the box. And yeah, we’re warlike, because hell, there’s bananas in those boxes.

The people who work on Wall Street have found a way to get more bananas out than everyone else. And it’s gotten so bad that everyone else is now protesting for a fairer distribution of bananas.

But regardless of who gets what number of bananas, it’s still a zero-sum game we’re playing. One more banana for me means one less banana for you.

The question we should be asking ourselves right now is not just who should get what number of bananas, but how do we make it not a zero-sum game? How do we create a system where my helping you get bananas results in me getting more bananas too?

That’s where we need to go with this whole Occupy Wall Street thing. Not to a different division of bananas — that would just be retreading old ground — but to a different way of thinking about bananas and banana gathering entirely.

It’s a much tougher thing to figure out of course than just deciding how to split things up.

Will it get there? I don’t know.

Posted in Disruption | 1 Comment

Open Is Dead.

Open is dead.

That’s the conclusion I came to at a recent meeting of people gathered to talk about how to advance the Open Data agenda.

Open isn’t dead as a movement, it’s dead as a term that can be used to excite people, get them to rally around a cause, show up at an event, put themselves on the line for something.

Open Gov. Open Cities. Open Data. Open Source. All of these things are worthwhile things to pursue. All of the terms are tired and ineffective in advancing any agendas.

You’re never going to sell the wider world on the idea of Open. Other than the (relatively) small number of geeks who have already embraced it, people in general don’t care about Open. Politicians will never come out en masse for Open. Housewives (and house husbands) will never wake up thinking about Open.

Why? Because Open doesn’t seem to solve any of their immediate problems. It’s abstract. Fuzzy. It’s got a We Are The World feeling to it, but (like the song) there’s nothing concrete beneath that fuzziness.

If I’m a politician, why should I be in favor of Open Gov? If I’m a corporation, why should I be in favor of Open Data? That’s not clear. Certainly not by just hearing the name.

Okay, sure, Open Whatever sounds great if we’re talking about YOUR stuff being open. I love it when your stuff is open. (Free stuff!) But if we’re talking about MY stuff being open, what exactly is the value in that to me? I give away my stuff to… my competitors? My enemies? How does that work? What do I get out of that?

That’s what the term Open fails to explain, and what it HAS to explain if people who like Open are going to move it to the next level.

And the thing is, openness is not the end goal of Open. Open is a means to an end. It’s a means to a better, leaner, more reciprocal, more win-win ecosystem. And EVERYONE understands those terms. Even house husbands politicians. So why are we stuck on this term Open, which doesn’t pack the full punch it needs to? It’s time to bury the term Open and move beyond it to more meaningful, value-apparent terms. It’s time to get rid of the Old Open and talk about the New Open. Shared. Mutual. Reciprocal. Symbiotic. Win-win. Those are terms and ideas that people understand and that have value to them.

And they’re the terms that people (like me) who think things should be more Open should be using.

Posted in Cities, Innovation | 11 Comments

Are Banks Setting Themselves Up To Be Disrupted?

Banks these days seem to be going wild with new fees for everything. More and more, you can’t do anything without incurring a fee. Walk into a bank? Get a fee. Request an old statement? Get a fee. Close your account? Get a fee. It’s crazy.

And the latest fee announcement, the craziest of all, comes from Bank of America, which this week says it will start charging a $5 monthly fee to customers just for using ATMs.

It’s pretty infuriating for those of us who use banks–in other words all of us–but it also makes me wonder: are banks setting themselves up to be massively disrupted?

Methinks they are.

By adding all of these fees, tacking on all of this bloat, to something that people really just want to be painless and not cost them money, they’re setting the stage for someone or some group or some new way of thinking to come along and upend the whole notion of banking that we currently take for granted. The apple cart is getting so high off the ground, and so rickety, that someone could come along and turn it over before long with a new idea that catches people’s imagination in just the right way.

What would a disruption of banking look like? Could be a couple of things:

- One, it could come in the form of a new, low-end, no-frills bank that charges no fees and also offers no niceties. Think of Southwest Airlines as a bank: Peanuts for lunch instead of chicken parmesan. Rarely a direct flight anywhere. But dirt cheap. That’s what a low-end bank that could disrupt the current bank industry would look like. I would use that bank, and so would a lot of my friends. Just give me an ATM card and a good website where I can manage my accounts, and that’s all I need. Make sure there are ATMs for me all over the place. Forget about a branch entirely. Let me call in to a number when I need to speak to someone. Sure I’d miss the branch, but that’s not the point – the point is would I switch to that bank, if it was a hell of a lot cheaper than Bank of America? I would.

- Two, it could come in the form of a whole new type of exchange. This is more far-fetched, but it’s also pretty interesting. Crypto-currency, e.g. Bitcoin? New forms of local currency like Ithaca Hours? These are interesting because they disrupt not just the bank industry and who’s on top of it, but the whole idea of banks and currency altogether. This seems a lot farther off, but it also feels to me like where the world might be going in the longer run – over the next several decades. The disappearance of banking as we know it entirely. (Banking: what a 21st century idea!)

The first option is a no-brainer, and if someone with a couple billion bucks isn’t already starting a bank like that somewhere, I’d be surprised. The second option is a lot harder to see, and harder to make the case for – it’s the future, and it’s fuzzy, as always. But with movements like Occupy Wall Street popping up around the world and gaining momentum by the day, maybe the future is nearer than anyone would guess?

Anyway, if I were a bank like BofA, I’d be watching my back right now, and smiling more at my customers.

Posted in Disruption, Innovation | 4 Comments