Innovating in an Age of Personalization

DIY Culture And The Maker Movement Command The Future Of Innovation
OCTOBER 15, 2014 JENNIFER MARKERT
Photo courtesy of the Exploratorium via Flickr.

Ranging from crafts to robotics, a modern culture of DIY “making” is gaining commercial, corporate, and educational traction beyond the niche communities from whence it came.


The Maker Movement, as it’s called, promotes a culture that democratizes innovation, flips consumption on its head, and according optimistic leaders in the field, could spur a third industrial revolution in the future — one of personal manufacturing.

Here’s some AHA! facts to start with to show the size and scope of maker culture:

135 million U.S. adults are “makers”
Market for 3D-printing and other maker services expected to reach $6 billion by 2017
Makers fuel businesses pump $29 billion into world economy each year
First things first: What is the Maker Movement?

According to Technopedia and TechShop’s Maker Movement Manifesto (pfd), the Maker Movement is a growing trend in which individuals or groups of individuals — including hackers, crafters, and tinkerers — make, share, and sell unique products using available tools, often in a collaborative setting and for entrepreneurial purposes.

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Today’s maker culture is a modern iteration of a long history of DIY (do it yourself) trends.
Take for example the Arts and Crafts movement of the late Victorian period. It rejected industrial labor and the replacement of human workers by machines, and sought to improve the standards for design by putting emphasis on human craftsmanship.

This movement fizzled out in the early 1900s, as it was not a viable economic alternative to factories. Instead, it thrived as a hobby among those affluent enough to afford it. This sentiment has been attached to DIY throughout history — “making” as a pastime and recreation rather than a livelihood.

But more recently, technological innovations have brought the power back to the people — in essence, democratizing innovation. With the commercialization of computers, anyone could become a hacker. Today, the mass production of tools and technology enables cost-effective individual making, while the Internet enables the sharing, funding, selling, and socializing of ideas and products alike.

Collaborative spaces and communities

This isn’t just about individuals tinkering in their basements, however: behind every great movement is community, collaboration, and a lot of experimentation.

Also known as hackerspaces or fab labs, makerspaces (pdf) are physical locations in which people gather to share resources, network, work on projects, experiment, brainstorm, and learn.

One company called TechShop provides a chain of DIY workplaces nationwide. According to TechShop’s CEO, Mark Hatch, these fully-equipped shared spaces allow entrepreneurs to cut traditional development costs by as much as 98 percent.

Hatch calls the spaces “communities on steroids,” emphasizing how the collaborative ethos and startup-friendly culture builds support for people starting businesses.

The maker community extends online, of course: Maker Media, a global connection platform for makers, is responsible for MAKE magazine, Makezine.com, Maker Shed (and online store) Maker Faire (a growing and award-winning bi-annual event), and a beta social network space called Makerspace.com.

Social media magic

So you’ve got your makers, and you’ve got your space, but it takes the more than just that for innovations to transcend unlike ever before.

One key aspect that makes today’s Internet-age Maker Movement so special is the impact of social media in spreading and funding ideas, fast.

Websites like Etsy and Quirky act as online marketplaces for DIY products, stores like Inventables as a hardware source, Pinterest and Youtube as spaces tutorial space, and crowdfunding websites like Kickstarter ideal for raising money.

The only issue? Today’s Internet is not as equal opportunity as it purports to be. Given that exposure is oftentimes dependent on Google SEO priority and existing social media followings, competition for exposure is fierce and virality difficult to attain. This is what some call the politics of the attention economy, and it can act as much against aspiring entrepreneurs as it can for them.

Commercial adoption, or radical revolution?

According to the New Yorker, Maker Movement thinkers like Chris Anderson and Kevin Kelly envision a world in which personal manufacturing will “undermine the clout of corporations” and compete with mass retail goods — deinstitutionalization and empowerment of the individual that jives closely with libertarian viewpoints.

But at its heart, if the Maker Movement in theory is a rejection of capitalism in favor of a personal and creative autonomy, therein lies its flaw.

Already, larger corporate companies like GE and Free People, government agencies like DARPA, and universities have emulated the makerspaces that spawned innovative and profitable ideas like the MakerBot 3D-printer, Pebble smartwatch, Coin smart wallet, and more — while other companies have simply acquired such startups, as Facebook did with Oculus Rift VR.

It seems unlikely, then, that the Maker Movement will evolve into a full-scale revolution that undermines either government or capitalism — not yet, anyway — though it may morph society’s approach to consumption over time.

The takeaway: Looking forward

The growth and scope of Maker Movement suggests that it’s transcending ideologies by inching toward the mainstream on many levels, including government, corporate, and importantly, education. With the newest generation of minds exposed to maker-inspired curriculum, maker culture could become too integrated into society to even qualify as counter-culture in the not-so-distant future.

What would such a maker-made future look like? No one knows for certain. But if, as the Maker Movement Manifesto states, “making is fundamental to what it means to be human,” humanity — and the economy — can only stand to gain from more skilled makers, large and small.

Some AHA! facts to come away with:

There were over 280,000 Maker Faire attendees in total last year, with a 62 percent rise in attendance from 2009 to 2013.
It’s projected that by 2018, nearly half of Internet of Things solutions will be provided by startups less than three years old.
President Obama has expressed hope that future children will be “makers of things, not just consumers of things,” and the White House hosted its own Maker Faire in 2014.

This month, Melinda and I joined hundreds of scientists for a meeting in Seattle. The topic we discussed is something we’re all passionate about: how to harness the advances of science in ways that benefit the poor.

The occasion is the 10th anniversary of our foundation’s Grand Challenges in Global Health program, which we launched with the goal of identifying the biggest problems in health and giving grants to researchers who might solve them. To be honest, we’re not as far along as I hoped a decade ago; the process of developing and perfecting new tools—going from proof-of-concept through clinical trials, regulatory approval, manufacturing, and distribution—is even slower and harder than I thought. But we've learned a lot, and we've made some promising progress.

Grand Challenges has its roots in what I call catalytic philanthropy. It’s designed to fix market failures—places where capitalism fails to meet the needs of the poor. Why is there so much more research done on baldness than on malaria? Because rich people go bald, and they don’t die of malaria. Grand Challenges is like a venture capital fund in the sense that it backs a lot of ideas, knowing that many will fail, but a few could have a big impact. I’ll be delighted if five years from now, 20 percent of the initial projects are being deployed and saving lives.

The Grand Challenges run the gamut from making staple crops more nutritious to creating vaccines that won’t spoil when they get warm. The Wolbachia project that I wrote about in April—trying to stop dengue fever by infecting mosquitoes with a particular bacterium—also came out of a Grand Challenge.

We've made short videos about two other examples: an effort to identify HIV at the moment of infection and one to fight malaria by overloading the mosquito’s sense of smell (“like getting on an elevator with someone who’s put on way too much perfume,” as researcher Laurence Zwiebel puts it):

There’s another Grand Challenge that illustrates both what’s exciting and what’s hard about catalytic philanthropy: making the diagnosis of disease faster and more accurate.
Health clinics in many poor countries don’t have the same kind of sophisticated tools for diagnosing disease that many of us take for granted. If they do have access, it’s often a laborious process that involves mailing samples to a faraway lab and waiting for the results. The result: missed or delayed diagnoses and incorrect treatment plans. The evidence suggests that this problem has tragic consequences; in Tanzania and Nigeria, for example, studies found that misdiagnosis causes 25 percent of preventable deaths in children.

Imagine what would happen if American children were dying at that rate. The health-care market would spring into action, as dozens of companies went to work on new diagnostic tools. Yet because this was a problem of the poor world, companies were ignoring it. The market was failing.

So we challenged researchers: Can you create a new device that quickly diagnoses HIV, TB, malaria, and other diseases… accepts different samples, like blood, saliva, and sputum… is affordable… and reliable… and will work in a small clinic that has only a few hours of electricity a day?

Today, five public-private partnerships have taken up the challenge. The journey from idea to reality is a long one. For one thing, the partners had to figure out whether making such a machine was even technically feasible. It is—several of them have working prototypes. This is one of them, the Stratos, which our foundation is developing with a Seattle-based medical engineering company:

Walter Isaacson is one of the most respected biographers in the world, having written books about Steve Jobs, Benjamin Franklin, and Albert Einstein.

The former managing editor of Time Magazine, Isaacson’s work spans nearly four decades, across politics, education, and technology. His latest book, "The Innovators: How a Group of Hackers, Geniuses, and Geeks Created the Digital Revolution," is a culmination of his long journalistic career.

On Thursday, Isaacson gave a glimpse into that book through a LinkedIn post titled, “The One Thing Computers Will Never Be Able To Do.”

In the post, Isaacson argues the ability to think differently and possess an imagination is what makes humans to “remain relevant in an era of cognitive computing.” And that will help connect the arts with the sciences, which is precisely where the next digital revolution will come from, Isaacson writes.

Here’s what he said:

“The next phase of the digital revolution will bring a true fusion of technology with the creative industries, such as media, fashion, music, entertainment, education, literature, and the arts…This innovation will come from people who are able to link beauty to engineering, humanity to technology, and poetry to processors. In other words, it will come from the spiritual heirs of Ada Lovelace, creators who can flourish where the arts intersect with the sciences, and who have a rebellious sense of wonder that opens them to the beauty of both.”

Isaacson seems to have a point in making a reference to Ada Lovelace, an English mathematician from the 19th century. She was one of the early pioneers of computer algorithms and even predicted how machine programming could be used to play music, according to Slate.

Isaacson notes that the concept of connecting arts and science is nothing new, citing the case of Leonardo da Vinci and Einstein. But what makes this so exciting is that no one can predict what’s ahead of us, as he writes, “The interplay between technology and the creative arts will eventually result in completely new forms of expression and media.”

There are plenty of startups springing up to offer same-day telemedicine services, many using video on mobile devices. And Google is getting into the game, too.

But there may be room for everyone, because the services are addressing a huge market. In 2013, the average wait time for a family physician was 19.5 days, with same-day appointments practically unattainable without an emergency room visit. And studies show that wait time is increasing.

A new entrant in the consumer telemedicine space launched today to deal with the problem. PlushCare says its “virtual health concierge” service is unique in that the appointments are conducted by a group of pedigreed Stanford- and UCSF-educated doctors.

The appointments can be done by phone or via video on desktop, they cost the patient $45, and appointments are available the same day the request is made. The user can pay with a credit card, or using an employer flexible spending account.

PlushCare can feed clinical data from the exams back into the records system of the patient’s primary care doctor. (This subject, by the way will be one of the issues discussed at VentureBeat’s HealthBeat conference October 27-28.)

The service is available only in California right now, but will spread to other states in 2015, PlushCare says.

The other distinguishing feature of PlushCare, CEO Ryan McQuaid tells VentureBeat, is that the service doesn’t end when the video call is over. There’s no real time limit on calls, and patients can call back for another appointment free of charge if the original problem couldn’t be fixed as a result of the original appointment. The service will also do follow-ups to the patient if a lab was ordered.

McQuaid spent five years working at AT&T’s health accelerator before helping start PlushCare.

What PlushCare does differently is build long-lasting relationships with patients, where the virtual examination is just the start of the journey — as opposed to simply sending a prescription, McQuaid says.

PlushCare is funded by executives from Kodak, Splunk, Apple, and Jeff Jorgenson, the director of telemedicine at UCSF.  

Most people are lucky not to have to take any medications on an ongoing basis. But for folks with chronic conditions, it can be awful to manage.

Enter Pillpack, a company whose online pharmacy coordinates with doctors and insurance providers to deliver people the right medications at the right time, without all the hassle. The company is announcing today that it closed an $8.75 million funding round about a month ago, not too long after disclosing its first $4.1 million in funding back in February.

Pillpack is a fully operating, independent online pharmacy. It sends you two-week supplies of their prescription medications, vitamins, and over-the-counter medications individually packaged and organized by date and time you need to take them. Pillpack then bills you in four-week increments for the copayments and costs you’d normally encounter — pretty nifty and not more costly than the old-fashioned solution. Pillpack also has pharmacists ready to answer questions 24 hours a day via online message, call, or chat.

Founder TJ Parker, who grew up in the pharmacy business and spent his teen years delivering medicine to local customers and later worked for Massive Health, told VentureBeat that he came up with the idea after years of watching how awful the experience is.

“Is there an app I can build to make this better?” he asked himself. With 30 million Americans taking five or more medications per day, according to Parker, he saw a massive opportunity to improve the process.

Since its launch in February, the company has added about eight new states to its roster for a current total of 40. In July, it also did away with its $20 monthly fee to be totally price-competitive with brick-and-mortar pharmacies.

With its new cash infusion, Parker plans to focus on spreading awareness about his service, improving its product, and building out its operations and distribution. A mobile app is also on the roadmap and a very high priority, although Parker declined to share a specific release date, adding that it’s still early in the process and even 2015’s first quarter would be a very tentative goal.

Pillpack was recently joined by Y Combinator-backed Zenamins in the pill-mailing business (Zenamins sends you vitamins to help make sure you take them). The company’s bigger selling point is actually its goal of building a database that could help recommend better vitamin recommendations to people. Still, Pillpack is in no hurry to diverge from its current business model, though Parker said the company could do interesting things with its data someday down the line.

Accel Partners led this round of funding, with additional participation from Atlas Venture, High Line Venture Partners, QueensBridge Venture Partners, Andy Palmer, and David Tisch. Accel Partners’ Fred Destin is joining the company’s board as part of the deal.

Pillpack was founded in 2013 by TJ Parker, Brian Hoffer, and Elliot Cohen and is based in Cambridge, Mass. It previously raised $4.1 million from Atlas Venture, Box Group, and Founder Collective, among others.

When Marketing Adds Value - Pulling Rabbits Out of a Hat
Oct 22 2014 631Views 25Likes 5CommentsShare on LinkedInShare on FacebookShare on Google PlusShare on Twitter
A year after we started repositioning SuperMac, Engineering, which had been working on a family of new products literally for years, came to deliver some good news and bad news.

First the bad news: the new family of eight high-performance graphics cards we were counting on couldn’t be delivered. The plug-in co-processor architecture was too complex and couldn’t be made to work reliably. Instead of the family of eight products we were expecting, only one could be delivered. Nothing else was in the development pipeline for the next 12 months.

I couldn’t believe what I was hearing. One of the reasons I had joined the company was seeing these boards as hope for the future. Now we were faced with the fact that even though we were gaining market share daily, there was nothing coming out of Engineering.

Well not quite nothing: there was the good news. Instead of eight boards, Engineering was going to be able to deliver one new graphics board. Just one. But it was going to be the fastest graphics board ever made. In fact, according to our Potrero benchmark suite this new board ran our customer applications ten times faster than our current products.

I went home to think about this. Instead of a product family, we had a single point product. Each of my competitors had 5-10 graphics boards covering a range of prices with performance to match. Even our current product line had four graphics boards in it. Now our new product line would only have one board?! What could we do?

Marketing Gets into the Engineering Business
The next day I walked in uninvited to the VP of Engineering’s office and asked if he had a minute. I said, “I realize you’re trying to get the one board out to market, but I have a question – can you slow our new board down?” It doesn’t take much imagination to see the look he gave me when I asked that question. “Steve, this hasn’t been a good week. What do you really want?”

I felt sorry for him, he was working really hard to dig out of this mess. I replied, “No joke. Can you make it slower?"

I think he wanted to strangle me as he barely got out, “We worked for years to deliver a product that’s ten times faster than anything that exists and you want to make it slower?”

Well, not exactly, “What I want to know is if the board would work if you slowed it down by 10%?” Yes, was the answer. “How about if you slowed it down 20%?” Yes, was still the answer. “By 30%?” The change in his demeanor – from trying to kill me – to laughing, as it dawned on him where I was going, could only be described as hysterical relief. “40%?” Yes, yes and yes.

We were about to be partners in building a new product family.

Rabbits Out of the Hat – Branding and Line Extensions
First, what we proposed is that we take our world-class, ten-times-faster-than-anyone board and build an entire product family around it, by slowing it down. We wanted nine boards, each differing in performance by 10%. The only real difference between them would be the addition of “wait states” or “slow down” instructions on a chip. Our entire new product family would be an identical board.

Next, we were going to create three separate product families, each its own unique brand. And within each brand we would have a “good,” “better,” and “best” graphic board. All tailored to our color publishing market.

Finally, these product families would be priced to bracket (box in) everyone of our competitors’ products with better price and performance. We were going to price the products from $699 to $3,999. Our calculations had us losing money on the two lowest cost boards, breaking even on the third and making great margins on the other six. We calculated our blended gross margin for the company by estimating the number of units we would sell of each board times the gross margin of each individual board (then I crossed my fingers and prayed we were right).

In essence we were proposing that we ship the same board in nine different colored boxes and charge from $699 to $3,999 depending on the color of the box and the speed of the board. (This turned out to give our customers immense value. We would have charged $3,999 for the high-end board. Now we could give customers lower price boards without Engineering spending 12 months to design new ones.)

You’re Going to Do What?!
The reaction inside our company could not be described as polite. At first most people thought we were joking. No one believed it would work. Some engineers were insulted that we were going to slow down their board, and sales was convinced that within days of the board hitting the street we would have a black market in chips to speed up the $699 boards and turn them into $3,999 ones. My own marketing department was convinced that the same industry magazines, which we had managed so well, would turn on us when they saw that the boards were physically identical.

Yet I believed that this was the only alternative to slowly going out of business. (While our engineering department was close to the customer, seven of those eight products they were going to ship to those customers weren’t going to see the light of day.) Now it was up to Marketing is to take the technology as delivered by Engineering and shape it to the needs of the customers and market. By creating these new families of products we could provide real value to our color desktop publishing customers by giving them performance at a price they couldn’t get anywhere else.

A Big Idea – Marketing Adds Value.
This notion of Marketing taking what Engineering builds as a starting point, not an end point, is the difference between just being a marcom department and a value-added Marketing department. If all you’re doing is shipping and launching the product as spec’d by Engineering, you’re not adding value. The job of Marketing is to help Engineering figure out how to deliver product(s) that customers need and want. It starts with a deep understanding of what customers need (and making sure Engineering is getting continuous customer feedback and interaction.) We did that when we surveyed our customers. Next, we had a good understanding of the capabilities of the product that Engineering was building. And in this very unique case, we figured out how to maximize revenue and profit by branding and product line extensions.

We would use this same idea 10 years later at E.piphany.

SuperMac product line – built on a single graphics card

Relentless Execution
If we were right, this line extension and branding strategy would allow us to catch up to our competitors and overtake them.

Luckily marketing had built a reservoir of credibility with our peers and CEO. After the VP of Engineering described the alternatives (no new products for a year), desperation became the mother of innovation and we launched our new family of nine graphics boards. As far as manufacturing was concerned, they were the identical graphics board. As customers saw them, they were a new family of products aimed directly at the color desktop publishing market with astonishing performance and a low-cost entry price.

The results spoke for themselves: Not one black-market board ever appeared, and the press was satisfied with our “customer value and product family” explanation. Our new graphics boards became the market leader of the industry. In three and a half years SuperMac’s market share went from 11% to 68%, as we went from bankruptcy to $150 million in sales.

Years later, I was having coffee with the VP of Sales and Marketing from one of our competitors and he said, “We would have beat you guys, but we just couldn’t keep up with the tidal wave of products coming from your engineering department. They came up with exactly the right products at the right price.” I took a long sip of coffee as I thought of all the things I could say. Instead I smiled, nodded and said, “Yep, it was amazing, they just kept pulling rabbits out of the hat.”

Lessons Learned

At times, what Engineering delivers is the raw material.
Marketing's job is to take engineering products and use them to maximize revenue and profit.
In an existing or resegmented market, this may include branding and product line extensions.
This requires deep customer and competitive knowledge.
In most markets, “first mover advantage” is illusorily; fast followers often win.

The push to provide minute-by-minute patient monitoring may seem excessive at first hearing, but the impact both on patient management and patient outcomes can be significant.

In a typical hospital, patients are checked about every 4-8 hours. In an acute care situation it may be more frequent, but the truth is that nurses aren’t always available to give patients the attention they need — and sometimes these patients can become quite ill as a result.

Zephyr Anywhere’s BioPatch — a small, unobtrusive, bandaid-like piece of sophisticated electronics — is attached to a patient’s chest to collect all vital signs and transmit them to a nurses’ station for general ward monitoring. This is not the kind of data collected by consumer fitness wearables. We’re talking about medical-grade data from an FDA-approved device.

The BioPatch is used in combination with its software platform (ZephrLife), which uses a color-coded alarm system to notify nurses which patients are in acute need. The platform can also notify nurses directly via a cellular device. Hospitals can set their own standards and levels of alerts, allowing them to prioritize patients with far more efficiency.

Besides the obvious benefit of 24-hour monitoring, the patient’s hospital experience is also greatly enhanced. Without wired monitoring equipment, patients can be more mobile. They also don’t need to be woken up regularly for vital-sign checks, day or night.

The BioPatch can make the trip home with patients. By continuing to monitor patients with serious medical conditions after discharge (and transmitting data back to care teams via smartphones), the system can identify patients who are at risk for readmission, then enable care teams to intervene before it gets that far. It’s a win-win for patient and provider. For the patient it prevents the stress of returning to the hospital. And reducing unnecessary hospital admissions saves the systems lots of money.

Brian Russell, Zephyr Anywhere’s CEO, is just one of the many health tech leaders speaking at HealthBeat October 27 – 28. He’ll be joined by Lisa Suennen, Managing Partner at Venture Valkyrie and Stacy Enxing Seng, President of Covidien Vascular Therapies to talk about the merging of traditional med tech with the digital health world.

General Electric – a literal powerhouse of a corporation involved in virtually every area of industry, has been laying the foundations of what it grandly calls the Industrial Internet for some time now.

But what exactly is it? In this post I will try and give a basic overview of the ideas which they are hoping will transform industry, and how it’s all built around big data.

If you’ve heard about the Internet of Things which I’ve written about previously, a simple way to think of the industrial internet is as a subset of that, which includes all the data-gathering, communicating and analysis done in industry.

In essence, the idea is that all the separate machines and tools which make an industry possible will be “smart” - connected, data-enabled and constantly reporting their status to each other in ways as creative as their engineers and data scientists can devise.

This will increase efficiency by allowing every aspect of an industrial operation to be monitored and tweaked for optimal performance, and reduce down-time – machinery will break down less often if we know exactly the best time to replace a worn part.

Data is behind this transformation, specifically the new tools that technology is giving us to record and analyze every aspect of a machine’s operation. And GE is certainly not data poor – according to Wikipedia its 2005 tax return extended across 24,000 pages when printed out.

And pioneering is deeply engrained in its corporate culture – being established by Thomas Edison, as well as the first private company in the world to own its own computer system, in the 1960s.

So of all the industrial giants of the pre-online world, it isn’t surprising they are blazing a trail into the brave new world of big data.

GE generates power at its plants which is used to drive the manufacturing that goes on in its factories, and its financial divisions enable the multi-million transactions involved when they are bought and sold. With fingers in this many pies, it’s clearly in the position to generate, analyze and act on a great deal of data.

Sensors embedded in their power turbines, jet engines and hospital scanners will collect the data – it’s estimated that one typical gas turbine will generate 500Gb of data every day. And if that data can be used to improve efficiency by just 1% across five of their key sectors that they sell to, those sectors stand to make combined savings of $300 billion.

With those kinds of savings within sight, it isn’t surprising that GE is investing heavily. In 2012 they announced $1 billion was being invested over four years in their state of the art San Ramon, California analytics centre, in order to attract pioneering data talent to lay the software foundations of the Industrial Internet.

In aviation, they are aiming to improve fuel economy, maintenance costs, reduction in delays and cancellations and optimise flight scheduling – while also improving safety.

Abu Dhabi-based Etihad Airways was the first to deploy their Taleris Intelligent Operations technology, developed in partnership with Accenture.

Huge amounts of data are recorded from every aircraft and every aspect of ground operations, which is reported in real-time and targeted specifically to recovering from disruption, and returning to regular schedule.

And last year it launched its Hadoop based database system to allow its industrial customers to move its data to the cloud. It claims it has built the first infrastructure which is solid enough to meet the demands of big industry, and works with its GE Predictivity service to allow real-time automated analysis. This means machines can order new parts for themselves and expensive downtime minimized – GE estimates that its contractors lose an average of $8 million per year due to unplanned downtime.

Green industries are benefitting too – its 22,000 wind turbines across the globe are rigged with sensors which stream constant data to the cloud, which operators can use to remotely fine-tune the pitch, speed, and direction the blades are facing, to capture as much of the energy from the wind as possible.

Each turbine will speak to others around it, too – allowing automated responses such as adapting their behaviour to mimic more efficient neighbours, and pooling of resources (i.e wind speed monitors) if the device on one turbine should fail.

Their data gathering extends into homes too – millions are fitted with their smart meters which record data on power consumption, which is analyzed together with weather and even social media data to predict when power cuts or shortages will occur.

GE has come further and faster into the world of big data than most of its old-school tech competitors. It’s clear they believe the financial incentive is there – chairman and CEO Jeff Immelt estimates that they could add $10 trillion to $15 trillion to the world’s economy over the next two decades. In industry, where everything including resources is finite, efficiency is of utmost importance – and GE are demonstrating with the Industrial Internet that they believe big data is the key to unlocking its potential.

What's your view on the topic? Please share it in the comment field below.

What Peter Drucker Knew About 2020
by Rick Wartzman  |   11:00 AM October 16, 2014
Comments (13)       


When PwC released its annual survey of corporate chief executives for 2014, it was immediately obvious that change is on leaders’ brains: “As CEOs plan their strategies to take advantage of transformational shifts,” the consultancy reported, “they are also assessing their current capabilities – and finding that everything is fair game for reinvention.”

It’s no wonder why.

“Every few hundred years throughout Western history, a sharp transformation has occurred,” Peter Drucker observed in a 1992 essay for Harvard Business Review. “In a matter of decades, society altogether rearranges itself – its worldview, its basic values, its social and political structures, its arts, its key institutions. Fifty years later a new world exists. And the people born into that world cannot even imagine the world in which their grandparents lived and into which their own parents were born. Our age is such a period of transformation.”

For Drucker, the newest new world was marked, above all, by one dominant factor: “the shift to a knowledge society.”

Indeed, Drucker had been anticipating this monumental leap – to an age when people would generate value with their minds more than with their muscle – since at least 1959, when in Landmarks of Tomorrow he first described the rise of “knowledge work.” Three decades later, Drucker had become convinced that knowledge was a more crucial economic resource than land, labor, or financial assets, leading to what he called a “post-capitalist society.” And shortly thereafter (and not long before he died in 2005), Drucker declared that increasing the productivity of knowledge workers was “the most important contribution management needs to make in the 21st century.”

Sadly, judging from the way most of our institutions are run, we are still struggling to catch up with the reality Drucker foresaw. How should managers alter their approaches to fit the times? Here are six aspects of running an enterprise that should now be front-and-center:

Figure out what information is needed. “It is information,” Drucker wrote, “that enables knowledge workers to do their job.” This is especially true for executives. The trouble is, even in a hyper-connected world where endless amounts of data are literally at our fingertips, many rely on the producers of the data – the bean counters, the sales force, the IT department – to serve up the numbers they believe are most relevant. And these folks don’t necessarily have a clue. A 2014 McKinsey & Co. survey found, for example, that fewer than 20% of IT professionals say they are effective at targeting where they can add the most value inside their organizations. “An adequate information system,” Drucker wrote, must lead executives “to ask the right questions, not just feed them the information they expect. That presupposes first that executives know what information they need.”

Actively prune what is past its prime. Virtually every executive is eager to see his or her organization innovate. Through our work at the Drucker Institute, however, it is clear that most are reluctant to take the necessary first step toward creating the new: continually winding down those products, services, programs, and procedures that are no longer making a real contribution. “Every organization will have to learn to innovate” on a constant basis, Drucker wrote. “And then, of course, one comes back to abandonment, and the process starts all over. Unless this is done, the knowledge-based organization will very soon find itself obsolescent, losing performance capacity and with it the ability to attract and hold the skilled and knowledgeable people on whom its performance depends.”

Embrace employee autonomy. Drucker urged executives to push decision-making and accountability all the way down through the organization as early as 1954, when he introduced the concept of Management by Objectives. And yet there is ample evidence that most organizations remain paragons of command-and-control. In a knowledge economy, top-down direction is particularly detrimental because employees are bound to know more than their supervisors do about the specialized fields in which they operate. They may also know more about the customer—his needs and desires. “Knowledge workers have to manage themselves,” Drucker advised. “They have to have autonomy.”

Build true learning organizations. “If knowledge isn’t challenged to grow, it disappears fast,” Drucker cautioned. “It’s infinitely more perishable than any other resource we have ever had.” To keep it fresh, John Hagel, co-chairman of Deloitte’s Center for the Edge, says that firms need “new architectures” designed to increase the flow of information and learning inside and outside the organization’s walls. Traditionally, the organizing principle for businesses was to achieve efficiencies of scale. Now, Hagel says, “scalable learning” must be the aim. Pursuing it begins with redesigning work environments to foster new knowledge creation – that is, to move beyond sharing what’s already known to helping workers make genuine discoveries more quickly by tackling performance challenges together. Unfortunately, there’s an awfully long way to go. Asked how many corporations have implemented this vision, Hagel says: “The answer is zero.”

Provide a much stronger sense of purpose. Survey after survey reveals that the vast majority of employees are not engaged in what they do. One big reason is the failure to connect people’s jobs with a larger sense of purpose. Too often, the organization seems to be an end in itself; no meaningful link has been forged between the daily tasks of the enterprise and how they serve the customer and better society. “What motivates – and especially what motivates knowledge workers – is what motivates volunteers,” Drucker wrote. Among other things, “they need to know the organization’s mission and to believe in it.” A paycheck, even a fat one, is not enough. No longer can organizations expect to inspire “by satisfying knowledge workers’ greed,” Drucker counseled. “It will have to be done by satisfying their values.”

Be more mindful of those left behind. Drucker worried a lot about a group that he characterized as “knowledge-worker cousins”: service workers. “Knowledge workers and service workers are not ‘classes’ in the traditional sense,” Drucker wrote. “But there is a danger that … society will become a class society unless service workers attain both income and dignity.” He added: “Anyone can acquire the ‘means of production’, i.e., the knowledge required for the job, but not everyone can win.” Again, Drucker’s words prove prescient as the gains in the knowledge economy are hardly being shared equitably. “Our basic grievance with today’s billionaires is that relatively little of the value they’ve created trickles down to the rest of us,” the University of Toronto’s Roger Martin asserts. He warns that this situation is unsustainable, and that top executives need to rein in their compensation. Surely, Drucker would have agreed. “A healthy business,” he wrote, “cannot exist in a sick society.”

It’s easy to forget how profound the emergence of the knowledge age really is. Ours is “the first society in which ‘honest work’ does not mean a callused hand,” Drucker noted. “This is far more than a social change. It is a change in the human condition.” But for all that, what it takes to manage effectively now is no mystery. We’ve been headed down this path for more than half a century.

In his HBR piece, Drucker suggested that our great transformation would be completed by 2010 or 2020. It is high time that management started acting like the clock is running out.

As Apple gears up to unveil what many believe will be its latest iPad tablets and Mac computers on Thursday, Gartner has today published figures that underscore the challenge in the market for devices like these against the ineluctable rise of the cheaper, and ultimately more easily replaceable, smartphone.

Gartner’s Q3 and annual figures for device sales worldwide — covering smartphones and tablets as well as PCs of all sizes — shows that tablet sales in 2014 will only see 11% growth over last year, compared to growth of 55% the year before. This works out to a projected 229 million tablets selling in 2014, or 9.5% of overall worldwide device sales, which will total 2.4 billion devices for the year, and 2.5 billion in 2015.

The PC, meanwhile, continues its long-term decline: there will be sales of 276 million units in 2014, down from 296 million in 2013.

The winner in the consumer electronics race continues to be smartphones, and specifically the Android smartphone.

Devices built on Google’s mobile opeating system will see sales of 1.2 billion devices this year, working out to more than half — 51% — of all devices sold — smartphone or otherwise.

And while there are still sales of feature phones in the market (as evidenced by Gartner’s findings that feature phone-heavy Nokia remains number-three after Samsung and Apple), Gartner predicts that they are not long for this world. It says that by 2018, every nine out of 10 phones sold will be a smartphone.

It’s a trend that will be played out especially in emerging markets, where Android will cross the 1-billion annual market in sales in 2015 in geographies outside of markets like the U.S., Western Europe and Japan. This year, emerging markets already represent nearly three times the number of sales that take place in developed countries (see full table below).

The ultramobile promise

Ultramobiles, the not-quite-PC and not-quite-tablet and not-quite-phone category, will remain niche but continue growing: there will be 37.6 million of these sold this year, and as befits a fast-growing but still-small category, it will grow the fastest. Ultramobiles will essentially see a doubling in sales in 2015 while the other categories continue to see only modest rises.

But ultramobiles are also, effectively, suffering from the same issue as tablets (and to a lesser extent PCs): people are simply not replacing them as much. “In the tablets segment, the downward trend is coming from the slowdown of basic ultramobiles,” Gartner writes. The analysts believe that the life cycle of tablets and ultramobiles is around three years at the moment — meaning buyers this year won’t replace devices until 2018. Gartner says it projects 83 million less new tablet purchasers in 2014-2015 and 155 million less tablet replacements through 2018.

It’s not that these devices are unsatisfactory to consumers; quite the opposite. “I think that maybe they’ve lived up too much to their expectations,” jokes Roberta Cozza, a Gartner analyst and co-author of the report. “There are too many solid devices out there and users don’t have a reason to upgrade to the new units. They are just happy with software upgrades.”

She adds the she thinks tablet makers may already have to start setting their sites more on emerging markets. “I think that this market has really just reached a point of saturation in mature markets. In the US for example by end of 2014 we are expecting a 50% penetration. Things just had to slow down as new users are drawn to another device category, larger display smartphones.”

Samsung on top, but hurting from a lack of must-have new features

Cozza also confirmed for me what many of you probably already suspect: Samsung is head and shoulders above all other OEMs at the moment in terms of sales.

If we take all devices — including PCs, ultramobiles and phones, Samsung is still number one, with around a 20% share this quarter, she says. And to underscore how much Samsung’s fortunes are driving by Android, she points out that Samsung’s share in the PC category is “tiny.”

With Apple in second place at around 10%, Nokia in third just behind it and Lenovo in fourth in the overall category (the Microsoft-owned Nokia still has a pretty brisk trade in feature phones that buoys it), the stage is being set up for some rebalancing in the quarters ahead.

“We’ve definitely seen a slowdown in Samsung in Q2 in the smartphone market, and they’ve been losing share,” Cozza notes. “I think that the issue is that in the premium side of the market with phones, and they will have this even more so in Q3 and Q4, is that will be under pressure from Apple because now of the new alternative with larger display.” By this she means the new iPhone 6 models.

Premium device users, she says, haven’t had “enough reasons” from Samsung to either buy their new devices, or even stick with the brand. “Going form the Galaxy S4 to the S5 or even to the S4 from the s3, there is nothing really groundbreaking that generated a lot of replacement. On the contrary, we are going to see a lot of replacement on the Apple side because the bigger screen is a tangible feature to have.”

The emerging picture for emerging markets

While developed markets in many ways call the shots when it comes to the latest and greatest features and high-end handset sales, it’s the emerging market sector that will be setting the pace for volume growth.

Another fast-moving brand, Cozza notes, is the Chinese handset maker Xiaomi, which is now pushing more strongly into emerging markets outside of its home country. “We’ve seen really their share growing very fast and during Q1 and Q2 of this year, but as the Chinese smartphone market has reached saturation Xiaomi will go into other regions.” Another that will do this is Huawei, she says. “Now all these Chinese brands are really going into other markets, where the volumes will be.”

Indeed, when you consider Gartner’s figures for how emerging and mature markets are comparing in terms of operating systems, you can see how the volumes have massively shifted — a sign of where attention and investment will continue to go in years to come.

Next month, an earnest journalism startup called Latterly will embark on a bold experiment: whether it’s possible to run a business solely based on releasing high-quality nonfiction stories to the world.

Based in Bangkok, Thailand, Latterly will publish four new elaborate works of narrative journalism — with characters, plot, conflict, resolution, and all — on its website every month. The startup will charge readers $3 per month or $8 for a three-month subscription.

Aside from subscriptions, Latterly will have financial support from donors. But the list of obvious revenue sources ends there. There will be no ads — a quirk one sees occasionally with fledgling journalism startups these days. What’s more, the startup will apparently not care one drop about what takes off among readers and what doesn’t.

“Most importantly, we don’t care about clicks. We won’t monitor our traffic,” Latterly declares on its website. That’s a radical perspective in this page-view-centric journalism era, as websites clamor for attention with clickbait headlines, constant social-media promotion, and other gimmicks. Even newspapers like the Oregonian in Portland, Ore., have pushed reporters to focus on metrics like story count.

Latterly’s strategy, unconventional as it is, makes sense given the experiences of the people behind it. Co-founder Ben Wolford saw an emphasis on performance metrics rather than quality while working on staff at one U.S. newspaper. He’s convinced that readers want more than what he calls “quick-hit journalism.” And he and co-founder (and fiancé) Christina Asencio are banking on it to be able to at least cover the costs of the new startup.

“People will vote with their credit cards,” Wolford told me in a instant-message chat on Skype. “If our stories aren’t holding their attention, they’ll unsubscribe. That’s the new model for journalism, I think. Sure we’ll look at which stories are most popular, but the purpose won’t be profit like it was at places I’ve worked. Our survival isn’t as tied to the clicks as it is for traditional media.”

That’s gutsy. But at least the attitude puts Latterly in a club of startups that have tested out business models emphasizing quality of work.

Consider Atavist, the Big Roundtable, Byliner, Epic, and Narratively, the Riveter, among others. Meanwhile there are also startups that aggregate excellent long-form work, like Longform. And longtime technology journalist Steven Levy is creating a section at Medium to cover the industry in depth.

Latterly will produce more frequently than, say, Epic, Wolford wrote. And instead of focusing on a limited geographical area the way a newspaper would, Latterly will be an inherently international publication. Wolford will write for it from Thailand, and he’s looking for freelancers to contribute from different corners of the world, too.


Above: Ben Wolford and Christina Asencio, the founders of Latterly.
Image Credit: Latterly
Family and friends have put up money for the effort, and he and Asencio are in the process of creating a Kickstarter campaign to pay contributors.

“The Kickstarter is so that I don’t go broke paying for the kind of quality that will make this successful,” Wolford wrote. “100 percent of what we raise (we haven’t decided on a figure) will go into journalists’ pockets.”

No mobile apps are in the works at the moment; the site is responsive, Wolford told me.

For now, he’ll continue as an editor at the Bangkok Post, and Asencio, a human-rights attorney, will keep looking for work. But ideally, they’d like to work full-time on Latterly.

“Right now we’re selling an idea,” Wolford wrote. “When our first issue comes out in November, that’ll be the test of whether people believe in this kind of journalism.”

The Death of the Patient: Moving from 'Healthcare' to 'Health' and 'Patient' to 'Person'
Today, if you speak to anyone in the healthcare world, the discussion always begins and ends with making the change to a “patient centered care model” or putting the patient at the center of the care continuum. So much so, we recently added a “5th P” – Personal Responsibility – into our healthcare model: Prevention, Prediction, Personalization, Preemption. But looking at the bigger picture, what does this mean to all of us who have lives outside of the health statistic we are, the disease percentage we’re grouped within, or the Rx number pharmacists reference to fill our prescription?
To all the organizations, affiliations, companies, universities, and even social media groups that we identify with and belong to, we are individuals.  That’s not the case in regards to our affiliation or membership with insurance providers, medical practitioners, and pharmacies. As a cultural norm, we don’t define our personal identity as, for example, a member of Aetna AET -1.58% Health Insurance. That’s not something we’d put on our Facebook profile. So, how can we recreate our patient identity – a number, stat or percentage – to encompass who we really are?
To explore this concept further, I spoke with Dennis Robbins, Ph.D., a nationally recognized healthcare thought leader, steward and activist. He has been steering the patient- centric ™ movement that often admonishes us for not making changes in our lives to be healthier, sleep more, be less stressed, while at the same time, realizes that as “patients,” we are passive, vulnerable, sick, wounded , subservient, and on unequal footing, which creates a huge disparity and disadvantage for the person. For those reasons alone, it is critical to change the dialogue from “patient” to “person.”
Robbins outlines five main attributes that aid in a person-centric™ prevention model as displayed in the above graphic. This differs from prevention as the avoidance of illness, sickness and/or disease of the patient and personalizes prevention for the person.
“We can only make and activate changes in our lives as persons,” say Robbins. “As we’ve seen in the last couple of days in Dallas, when a person feels ill and goes to a ‘healthcare’ facility to seek treatment or peace of mind and is told to just go home, s/he must not become passive and subservient. We must do what we feel needs to happen to get our concerns addressed. That’s where the patient stops and the person begins. That transition may well save a person’s life, or in this case, multiple lives.”
He sees great promise in providing empowerment through mobile solutions and believes some of the newest wearables and tech toys, Fitbit, Jawbone and FuelBand are a great way to initiate the process of behavioral change that is self-directive, self-driven and personally meaningful.
The question remains, however, as to whether the provider and clinical community will be willing to embrace and to integrate this into their practices.
“There is a big gap between what is happening at the person level and at the clinical level,” says Robbins.
A larger question to consider is whether physicians are the best qualified to treat and manage health and wellness. In my opinion, the healthcare system is not set up to provide health. For the past 200 years, doctors have been trained to cure or reduce sickness, not prevent it. Even less emphasis has been placed on promoting and sustaining healthy behaviors. Therefore, the entire burden of prevention should not fall solely on the provider space or the person. The person, clinicians, community and system all play a part in ameliorating health and well-being.
In alignment with my perspective, Robbins believes our physicians are trained in treating sickness; they are not trained to promote health. He adds, “They are not trained in behavioral economics, mindfulness, nutrition, or exercise physiology either.”
As a result, many practices are realizing these limitations and expanding their teams to include these crucial disciplines.
“We are really talking about a whole different model of health and medicine,” says Robbins. “It’s no longer about sickness alone but also about wellness and promoting health and sustaining health behaviors.”
Robbins expanded on his trade-marked term person-centricity™, which is graphically depicted in the below image. In summary, he says patients don’t change, take ownership or self-determine their futures and destinies; people do. The prescription for health centers on meaningful changes in behavior in concert with person-centric solutions. Person-centricity™ moves beyond models of consumer/patient empowerment, centeredness, engagement, and activation, and is reflective of how individuals make decisions within the broader context of their lives. This distinction is not a facile shift in semantics but offers a fresh paradigm that accounts for the complexity and comprehensiveness of who we are.
The relationship between the notion of person-centricity™ and the transition from healthcare to health is symbiotic. The concept of person-centricity™ functions both as the missing link and the common thread that weaves together the needs, choices and aspirations of people throughout their health journey.
The changes required to create a healthier globe and lower the costs associated with lifestyle-related diseases need to happen on a personal level coupled with a supportive infrastructure to promote and sustain them. This shift is critical and a necessary part of every aspect of our transition from healthcare to health and to bending the sickness curve to better curb and control avoidable costs, promote and sustain health while reducing the unwanted sequelae of lifestyle-related disease and illness.
Robbins also spoke with me about the foundations of Western medicine. “Hippocrates in the Hippocratic oath use a Greek word called ‘diatia,’ which translates to healthy living and lifestyle,” he says. “We have deviated from that Hippocratic notion of what was it means to be healthy. Even then it wasn’t just about sickness; it was about health and wellness as well. We need to get back to that.”
So what can we digest from this thought provoking conversation? What action items can the world of health and healthcare enact? In essence, we need to work as a community to make becoming healthier easier. This needs to start with the individual – the person – rather than the patient. The healthcare world needs to move the trajectory from healthcare to health. That means making becoming healthier easier and by promoting and sustaining small lifestyle changes that collectively make huge differences.
Today, much of the drive for health is emanating from outside the clinical community – from employers, to educational institutions and governments to trade organizations, and beyond. There appears to be a parallel model emanating that focuses on health and wellness. It remains to be seen whether they will ever intersect.  I am hopeful technology will help healthcare shift gears faster than imaginable and drive this change.