Let’s Start an Innovation Revolution to Remove Obstructions to Innovation

For decades, innovation in the mobile industry was obstructed by the mobile carriers. Walled gardens seeking to maximize airtime revenue ruled the day and delivering value to customers a distant concern. Carriers had ultimate power to determine what innovations customers would have access to and their contract terms and limitations discouraged application development. Then along came a man with a sledgehammer….

The man was Steve Jobs of Apple, and the sledgehammer was of course the iPhone. The iPhone was a revolutionary handset at the time, and for several of its best features to work, a carrier would need to cede some of its control. Apple took the iPhone first to American mobile service market leader Verizon and was shown the door. Control was retained and the walls of the garden did not come down!

So, Steve Jobs did what any good entrepreneur would do, he didn’t take no for an answer and went on to the next carrier on Apple’s list. AT&T didn’t say no, after all this was their golden opportunity to try and catch Verizon, but they were no pushover in negotiations with Apple either. In order for AT&T to do a deal with Apple and cede some of their control, AT&T got Apple to sign a five year exclusive contract, but Apple did manage to start taking a sledgehammer to the walled garden. As a result RIM, Nokia, and others have managed to widen the crack further.

Now instead of the mobile carriers obstructing innovation by controlling which applications make it onto their network and taking nearly all of the revenue from their sale, handset makers are now controlling which applications make it onto their phones. Where mobile carriers were incented to limit the available applications, handset makers are incented to make as many applications available as possible. There is even a Skype client for the iPhone. This is something I never thought I would live to see.

Now, Nokia is looking to leverage their strategic acquisitions to push mobile innovation into whole new directions.

So now that many of the obstructions to innovation in the mobile industry have been torn down, what other industries currently are obstructing innovation?

Some say that commercialization of innovations in electric, hybrid, and water-powered vehicles has been obstructed by the automobile manufacturers, petroleum companies and the government (at the bidding of the first two). Whether that is a conspiracy theory or reality, I will leave for your comments to decide.

Conspiracy theorists will be disappointed as we’re not going to talk about water-powered cars, because water is an even more precious resource than oil, making a water-powered vehicle fleet unsustainable.

This leaves electric and hybrid vehicles. Is innovation being obstructed here?

In the United States, the evidence would indicate that the answer has been at least partially yes….

Despite the Toyota Prius being on sale since 1997 in Japan and since 2000 in the United States and Europe, there is still not a plug-in version available from Toyota (although one is slated for late 2009). But, through third-party providers like Advanced Vehicle Research Center and CalCars you can covert a standard Toyota Prius into a plug-in hybrid capable of getting 100mpg.

But at the same time you have researchers inside the United States at MIT recently discovering a way to potentially create lithium ion batteries that can be re-charged must faster. This could have implications for the portable device market for sure, but potentially also for the electric and hybrid electric vehicle market.

Outside the United States, innovation introductions to the marketplace are proceeding at a faster rate.

In December 2008, BYD, a Chinese company began selling a plug-in hybrid in China for about $22,000 (about half of the likely Chevy Volt price tag). The specs are compelling – 100mph top speed and 62-mile range on the battery (making it nearly fuel-free). If it passes U.S. safety tests, BYD’s vehicle may hit the market before the Chevy Volt or Toyota’s official plug-in Prius. Warren Buffett and Berkshire Hathaway are investors in BYD.

When you look around the hybrid electric innovation-sphere, what you see is a collection of independent foundational technology projects with little coordination or systems thinking. As we look to shift to fully or partially electric cars, we need designers to look at the power system as a true “system” and look to optimize the efficiency of every component of the system – including positive use of non-core and waste assets. We will need to come up with an objective measure of system efficiency similar to mpg and emissions measurements for internal combustion driven vehicles.

One non-core asset example people are already discussing is integrating solar panels into a car’s exo-skeleton. Here are a few links if you would like to find out more about on-board solar power:

One waste asset example would be using the turbulence and airflow over the car’s exo-skeleton to power mini-turbines and/or embedding a wind turbine that could re-charge the battery when the vehicle was at rest. Here are a few links if you would like to explore this further:

Internal combustion systems are well-understood and composed of nearly universal components, with innovations and competitive differentiations occurring primarily at the system component level. Because of this, maybe hybrid electric vehicle system design should become an open-source project to drive standardization of system component types and supply chain efficiencies.

This would allow component suppliers to focus primarily on creating component innovations, while still being able to contribute potential system improvement ideas to the open source research project. Automobile manufacturers could also focus on optimizing for efficiencies in the design and production of entire vehicle fleets, but still retain the ability to contribute system improvement ideas.

Could we collectively do more to spark an innovation revolution here?

What do you think?


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