Of Horseshit & Innovation

A horse produces between 15 and 35 pounds of manure each and every day — great news for market gardeners but not for a city like that of New York in the 1890’s, with its formidable 100,000+ horses transporting its people & goods. That’s a daily 2.5 million pounds of manure dropping onto the streets of the city and a very shitty problem to have. Even before adding in a quarter of a million gallons of equine pee (see this Penn University’s report). No wonder the city was plagued by hoards of flies, for whom such a fetid, soaking mess was the perfect breeding ground — with extra nutrition being the 40 or so horses that collapsed & died each day. Often left to decompose where they fell to make the shifting of each 1,300lb carcass that bit easier. Easier, that is, so they could be dumped on the nearest piece of waste ground or slide into the waters surrounding the city. George Waring, Jr., who then served as the city’s Street Cleaning Commissioner, described Manhattan as stinking “with the emanations of putrefying organic matter.” Another observer wrote that the streets were “literally carpeted with a warm, brown matting . . . smelling to heaven.”

You don’t really have to wonder too much why the theme of the 1898 International Urban Planning Conference — held of course in New York — was How to Deal with Horse Pollution.

Rarely has there been a situation more visibly ripe (or indeed aromatic) for the forces of innovation and technology to come together over to deliver a solution. Yet, despite the famous “If I had asked people what they wanted, they would have said faster horses” adage ascribed to Henry Ford (that he almost certainly didn’t make), the issue of poo and pee and decaying corpses on the streets of New York wasn’t actually what led him to adapt the moving assembly line process that ended the equine and begun the automobile age. It ruins a story but Ford was never looking to solve a horse pollution issue. In fact, he wasn’t really trying to solve a transportation problem at all. What he was trying to do was to bring down the very high production costs of what just happened to be automobiles, using assembly lines, interchangeable parts, and financing.

Innovation rarely follows the problem/solution focussed path we spend our lives hoping for and make our organisations plan around. Unfortunately, for lovers of a renaissance painting of history, neither is it driven by eureka moments so beloved of motivational speakers and bathtub geniuses. While innovation does requires knowledge, ingenuity, focus and sometimes — only sometimes, mind you — genius, it also requires the more mundane — some way of leading us away from a superficial view of the world — away (at least fleeting) into words that can aid our recognition of what is really confronting us. Words like why, why not, what if, could we? If… Words that help us in looking rather than just give permission to do.

There’s a great example — using the shipping industry — of why, where & how you look at things actually matters. In The Discipline of Innovation, Peter Drucker writes:

“For 50 years after the turn of the century, shipbuilders and shipping companies worked hard both to make ships faster and to lower their fuel consumption. Even so, the more successful they were in boosting speed and trimming their fuel needs, the worse the economics of ocean freighters became. By 1950 or so, the ocean freighter was dying, if not already dead.
All that was wrong, however, was an incongruity between the industry’s assumptions and its realities. The real costs did not come from doing work (that is, being at sea) but from not doing work (that is, sitting idle in port). Once managers understood where costs truly lay, the innovations were obvious: the roll-on and roll-off ship and the container ship. These solutions, which involved old technology, simply applied to the ocean freighter what railroads and truckers had been using for 30 years. A shift in viewpoint, not in technology, totally changed the economics of ocean shipping (my emphasis) and turned it into one of the major growth industries of the last 20 to 30 years.

The real problem in shipping was one of recognition — of where the problem lay in the first place. The horse wasn’t the real problem in late 19th century cities. It was the lack of an affordable process for its replacement. We’re often exhorted in our time at work to “think outside the box” or indulge in “blue sky thinking” (and other meaningless stocking fillers) in order to uncover some new new thing that is believed to be, somewhere, somehow, hidden. Yet innovation is rarely hampered by a lack of ideas, but rather a lack of noticing the good ones that we already have. Part of this is a connection problem. Douglas Copeland (kinda) said in 1990 that “the future has arrived — it’s just not evenly distributed yet“. Part is also a bias we all share against what seem new and creative ways of doing things when faced with even small amounts of uncertainty about the future. We thus lock ourselves into a situation whereby the same uncertainty that triggers a desire for innovation often rejects its own outcomes.

Kodak’s research laboratory, for example, invented the first digital camera in 1975 but didn’t pursue it as it devalued its existing profitable products — paying virtually no attention as Sony developed its own prototype and stole the immediate future of digital photography out from underneath them. Likewise, Xerox developed the first personal computer, but didn’t invest enough in the technology and allowed Steve Jobs & Apple to snatch the opportunity away. I seem to remember a newly privatised British Telecom (spun out from the UK Post Office 3 years earlier in 1991) thinking it just needed everyone to make one extra telephone call a week using its copper lines rather than respond to the opportunity of mobile telephony.

Clayton Christensen has done great work with his theory of disruptive innovation (first put forward in his 1995 The Innovator’s Dilemma). He showed how cheaper, simpler or just unexpected products & services bring down huge, well run ’market owners’ such as U.S. Steel, Xerox and Digital Equipment. This happens, he says, not by offering a better product after careful customer research but when the underlying assumptions of a market are jumped up and down on before being trashed (more often through splendid ignorance rather than a rational game plan). These trashings, he says, are nearly always impossible to foresee, are always painful to watch and are harder still to make any sense of.

That is the story of the RIM/Blackberry response to the truly earth shaking innovation of the iPhone. In a darkly compelling look, Michael Mace in 2010 writes of the window of perhaps 2 years the company had to respond to the warning signs of Apple induced disruption:

“If you work at RIM and are reading this, here’s what I want you to understand: Your company’s at risk. Your great financials mask that risk, and give you lots of logical-sounding reasons to avoid making the changes that need to be made. RIM is like a 53-year-old man who has high blood pressure and cholesterol but tells himself that he’s OK because he can still run a half-marathon. You are indeed fine, right up until you have the heart attack. Then it’s too late.“

Was 2 years enough time to re-engineer EVERYTHING? Their thinking, product, company and whole business? Well, in RIM’s case we didn’t get to find out as they didn’t even try. But the answer is probably no anyway. And yet the company had two of its best quarters as it veered towards the dead zone. A big part of Blackberry’s problem was lack of recognition: it continued to assume its customers were the centrally financed, risk averse CTOs & IT departments who claimed to represent their company future spend. But you can’t ignore the needs & desires of all employees by failing to see them as the consumers your product really thrives off. This problem of recognition can be the only reason RIM launched the Blackberry Playbook in 2012–5 years after iPhone and essentially a piece of useless, half working junk even before it hit the shelves (and then refused to budge from).

That same year, my previous startup, Audioboo, undertook a user research session — amongst inner city London teenagers — that I was present at. Nearly all using Blackberry devices, nearly all hating them; the poor build quality, the slowness, the constant reboots. One single thread kept them hanging in contract and that was Blackberry Messenger — an app (RIM realised far too late) that could have spearheaded a multi device, consumer focussed, future if the recognition amongst management had been there. But, as Christianson makes clear, why should it have been?

For the iPhone made no sense to an industry placing a premium on the lowest possible power or bandwidth, focussed so massively on reducing bytes across infrastructure. It was a world gone mad to be suddenly confronted with the iPhone’s constantly draining battery, sloppy data control — a device built on a philosophy (and I strongly believe that is the right word to use) that just assumed bytes would be free. Few then imagined just how available wifi would become at home and that every urban setting — hotel, airport, buses, streets — would offer it, often for free.

And Apple’s device worked straight out of the box. It is hard to remember that in those days that it was not unusual to spend the first hours with a new phone talking to customer support trying to set up now taken for granted basic services such as email or your address book. Very expensive hours for the provider (a cost which worked its way down the chain in higher tariff & handset costs) and exceedingly high friction for the customer. The seamless integration of wifi on the iPhone thus became a super, super quick advantage because Apple had recognised where the real problem was. And it was in a different place than everyone else thought it SHOULD be. Benedict Evans wrote this telling piece in Feb 2016:

“Today, one can date ‘mobile’ to before iPhone and after iPhone. But the interesting thing, looking back, is that before the iPhone, it didn’t really feel like we were desperately in need of some catalytic event. People in the ‘Middle Ages’ didn’t know they were living in the ‘Middle Ages’’. It felt like we were making steady progress. It wasn’t clear at all that we were waiting for a new class of device, with a new approach, that would transform the mobile internet from a segment of telco revenue into a near-universal experience that would become the main part of the internet itself.”

And of course, one of the things that kicked people out of The Middle Ages was innovation — that of the printing press, kicked off by a man whose previous financial misadventure involved making polished metal mirrors to capture holy light from religious relics. It was, in turn, a medieval Bishop of St Albans who said printing will make reading the infatuation of people who have no business reading. In other words, don’t let those people get these book things because, if they do, it’s the END. Of everything. And it was. It was an end called Protestantism, which happened, not because Martin Luther nailed some hand written notices to a church door in a small town in Germany, but because his thinking was printed & distributed around the whole of Europe in a matter of weeks. And that’s a moment when innovation made the entire world fall apart.

But that’s another story….

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