New technology doesn’t kill companies. Fake news about new technology kills companies. The sort of fake news that gets companies irrationally investing in the (unproven) next big thing - when they should be focussing their energy on knowing the knowable, and nailing the now.
Admittedly, this is easier said than done, given the extent to which employees, companies, media and even government fetishize what’s shiny and new. This is particularly true when you consider our ability to be surprised and delighted has been blunted by non-stop rolling news predicting the future. Only yesterday, Elon told us we’d be on Mars by 2024.
The first step to address this is to recognise that a relentless wave of innovative “ideas” is a problem (an insightful engineer once described this experience as a ‘denial of service attack’). So this post will focus on explaining why trying to predict the unpredictable is wasteful, and even vain - and instead, how to start thinking about the opportunity right under one’s nose.
We call this approach knowing the knowable, and nailing the now.
TfL Decelerator uses an iPad's in-built sensors to help Transport for London nail the now.
Mobile is everything - and getting mobile right is do, or die
Every object on Earth has the potential to become a connected computer. Cars, for example, are becoming smartphones on wheels, figuring out the fastest route on the fly.
Snap’s Spectacles, meanwhile, are sunglasses built out of smartphone components, helping us share our stories live. As for Amazon’s Echo, it’s just a giant smartphone that’s always listening, helping us with questions and errands in real time.
Snap Spectacles, shown here in glorious technicolour.
Through this lens, mobile isn’t a device - it’s an expectation. The expectation that wherever you are, you can turn to technology to get the job you care about done, with total ease.
The smart, innovative businesses that seize the headlines get this - and are desperate to master mobile technology (whether that’s smartphone technology or another mobile computing experience) so they can serve their customers 10x better than the past and competition. However, only a small handful of companies will nail the opportunity. And those that already have? They have already started to make a killing.
Take Amazon. It dominates online sales in the US, delivering $79 billion in sales last year. In second place is Walmart ($13.5 billion). That’s an enormous gap.
Or look at the value of GAFA (Google, Amazon, Facebook, Apple). GAFA deliver 10 times the revenue of Wintel at its peak.
And because of mobile technology’s, ahem, mobility, it is permeating every corner of life and has become the platform on which to build emerging technologies, whether that’s AR glasses, a self-serve payment solution or even a connected car.
Nailing mobile now is thus a do or die mission. And the size of the prize is bigger than anything we have ever seen before.
Technology doesn’t kill companies, but bad predictions do
The funny thing is, despite what expensive consultants might say, very few companies will die because they failed to grasp the size of the prize, or the scale of impact new technology will have. Nor will they die because they failed to invest enough in the new and novel.
Instead, they will die because they invest in the the wrong technologies at the wrong time. Or, more precisely, they will fail to figure out how to get their organisations to continuously implement the specific new technologies that will impact their customers’ lives and bottom lines now, and in the next 12 months.
This sort of discipline is a lot harder to instil than spinning up a lab filled with buzz-worthy technologies from the future. But wild innovation without a filter is as bad as no innovation at all. And the opportunity cost of investing heavily wildly in trying to guess the future is impossible to calculate - until it’s too late. Noted, there’s also a cost to not doing anything, but the investment between different time horizons has to be carefully balanced.
Mobile technology makes trying to predict the future even more unproductive
For the majority of human history, humans have enjoyed a pretty linear relationship between past, present and future. As Charlie Munger notes, it’s been reasonable for people to expect that when X happens, Y will happen - because that’s been the relationship between X and Y for as long as anyone can remember.
Today, however, we are experiencing a series of mobile technology-driven, non-linear changes that make it impossible to predict the future more than approximately 12 months out.
Smartphones have put millions of times more computing power than the computer that took humans to the moon into the hands of billions of people. This has established a network of connected supercomputers that is growing in scale, complexity and intelligence at an exponential rate. And this is driving non-linear change in pretty much every corner of life.
Examples of non-linear change are so embedded into life today that it’s easy to forget how hard it was to predict them.
New York taxi licenses were worth $1m less than five years ago. And then Uber used smartphones to connect Riders and Drivers and a dead-cert business and asset plummeted in value by 75%.
The hotel industry, for example, with all its bricks and mortar, was once deemed impossible to disrupt - even by Clayton Christensen, himself. And then along came Airbnb.
Facebook was a face book for college kids. And then it changed the new world order, mobilised the alt-right and helped make a reality TV star Commander-in-Chief.
(Sure these last two started as websites, but it’s mobile that has made their experiences and services accessible to billions of people.)
And whilst the outcomes people are trying to achieve remain remarkably consistent, it’s getting harder to predict how best to meet them.
Businesses take comfort from fake news about fake futures
Ironically, as it gets harder to predict the future, demand only increases for more predictable, coherent narratives that explain what’s going to happen.
Why? Well, we prefer order and predictability. Humans have always been suckers for mythical narratives that make sense of what can’t be easily understood. The greater the sense of unpredictability, the more we crave that coherent order - however fake those narratives may be.
And whilst investing in what everyone agrees will one day be 'the next big thing' provides (false) comfort and has an allure, it’s more valuable to go against the grain, and learn how to land what’s on the horizon already to deliver value to your customers today.
Give us single sign-on before you give us flying cars
To be clear, it’s not that companies shouldn’t be experimenting with the future, or investing in innovative solutions. Clearly, they should. But get beneath the headlines of global giants investing billions in R&D, and what really matters is that for the vast majority of companies, the balance of investment and the time horizon is all too often wrong.
Whilst Amazon might be experimenting with drone deliveries, the majority of the business is focused on nailing the now. Nobody needs flying cars if they can’t get a single view of their basket across platforms. Google learned this, too. Nobody needed wearable glasses. What they wanted was search to work on mobile. And many companies have learned that nobody requires a backend platform to rule them all...that takes two years to deliver. What they need is a service that can continuously improve today.
Unfortunately, most companies won’t give their customers what they want today - and will die as a result. Gartner tells us that eight in ten dollars spent on IT is dead money. The annual worldwide cost of IT failures is put at $3 trillion. And let’s be honest: everybody knows a multi-million pound IT project or two that was killed. Or an AI vanity project that isn’t going to end up doing anything useful except provide a case study for the company annual report.
How companies can create a culture of knowing the knowable, and nailing the now
When everyone around you is drawn to the shiny and new, and this includes your customers, it takes a strong culture and series of robust processes to go against the grain and keep your core team focused on nailing the now.
It also requires companies to elevate engineers from playing delivery roles to playing an upstream strategic role - particularly when it comes to the process of discovering solutions to customer problems.
Only with engineers central to the process is it possible to figure out how to apply the latest technologies to address customer outcomes today. And consultants, without engineers by their side, are rubbish at nailing the now - especially when their projects operate on multi-year timelines.
At TAB, we use four sets of activities to help others know the knowable and nail the now.
First, we continuously scan the horizon for new technologies and estimate their time-to-value based on feasibility and reach. This helps us discard big bet technologies that get all the hype and carry all the risk, and keeps our R&D frontier focused on what’s going to impact the now. This data-driven, self-governing, structured process has helped us discard dozens of technologies that misled our customers’ competitors, and focus on what actually delivers value.
Second, we go to great lengths to connect our engineers with customers and their pain. We don’t believe that a customer-led innovation process works. Innovation needs to be customer-informed but led by engineers who understand how to innovate to address customers’ pain points today. Great engineers in the right culture will do this - but beware of those more interested in making wild bets on the future.
Third, we insist on engineering time upfront in the Discovery process to ensure that the solutions we are developing are shippable, maximise value and reduce risk. To us, Discovery is not a research or creative exercise: it’s the foundation of a successful delivery - and engineers are critical to its success. Too many people use Discovery to dream up ‘the X of the future’ when the goal must be to create ‘the X of the now’. Great engineers will be inspired by, and honour, these constraints.
Fourth, we don’t just build technology - we help others build the teams and capabilities and stay true to the principles of nailing the now, themselves. And we don’t do this via book smart consultants. Successful transformation only comes by pairing with those that are experienced in life at the coalface, and that can cut through the BS, to drive the transformation pragmatically right now. From our experience, our engineers are key practitioners for organisations to learn from, given their disciplined approach to nailing the now.
Want to find out more about how we’re nailing the now at TAB?
Look out for, or come in and talk to us about:
TAB’s Product Stories: how we’re nailing the now with our clients
TAB’s R&D Frontiers model: how we scan and evaluate new technologies
TAB’s outcome-driven engineering: how we connect engineers with customer pain
TAB’s partnership approach: how we’re helping our clients building capabilities not just software
In the meantime, we’ll leave you with the wise recent words of Linux co-founder Linus Torvald: “Talk of tech innovation is bullsh*t. Shut up and get the work done.”