Category Archives: Innovation

Changing Business Models Around

Changing Business Models AroundSome business models and products have been around so long that we just take them for granted, while others concepts that are becoming new business models are so new that we’re not quite sure what to expect. It is probably easiest to explain what I mean and why this juxtaposition is important by looking at a few examples. Most of these examples involve challenging our orthodoxies.

1. Coffee Shops

In the typical coffee shop pretty much anywhere in the world, the business model works like this – you buy a coffee and it comes along with it the right to take up a place at any table in the café for as long as you want. So, coffee buys you time. An article I came across on NPR highlights an entrepreneur in Moscow that has opened a restaurant that loosely translates to the Clockface Café where instead of buying coffee and getting time, you instead buy time ($4/hr per person for the 1st hour and $2 an hour after that, up to a maximum of $12 after 5 hours) and get coffee for free. Ivan Meetin, the founder, plans to open his next café in London. Meanwhile I have heard of similar operations in Paris, and by now they can probably also be found elsewhere. So, in your business what do people get for free, and what do they pay for? And is there an opportunity to change around what you charge for?

2. Waste Disposal

In many businesses, and in the creation of most products, there is waste. And in most cases, businesses pay to have this waste removed from their premises. Or there may be waste that the customer has to pay to have removed. But this doesn’t always have to be the case.

KFC, McDonald’s, Burger King, etc. used to have to pay to have their used fryer oil picked up, but now thanks to the rise of biodiesel they may even make money from this waste product.

Chicken FeetChicken processors used to throw the feet away after processing a truckload of chickens, but after they discovered that chicken feet are a delicacy in several Asian countries, they stopped throwing them away and instead started exporting them. In fact, chicken feet sell for more per pound than chicken breasts in China.

Broken OREO’s used to have no value before Cookies ‘n’ Cream ice cream (and now Cookies ‘n’ Cream OREO’s) were discovered.

And finally, I came across an example of a bottle cap concept created by designers from the Lanzhou University of Technology in China, intended to give poor children access to building blocks for play, from what was previously thrown away.

Building Caps

3. Discounts for Data

Data security and privacy is becoming an increasingly hot topic, and in the past companies would either ask customers for their data and not give them anything for it, or just not ask for it. But now we are seeing some interesting models of companies asking customers for data and instead giving them something of value in exchange. For example, Urban Outfitters rewards users that respond to promotions inside their mobile app or to users that allow its app to connect to their Twitter or Instagram accounts with points that can be redeemed for sale previews, concert tickets, or early access to new pieces. What data do you want from your customers? What is it worth to you? How could this exchange be made engaging and not be seen as a purely financial transaction?

4. The Soft Drink Category is Saturated and Cold

Soft drinks… How many people out there think that the soft drink category is a blue ocean full of incredible opportunities for unbounded growth for established soft drink makers? Most people would say that this is a mature category and a tough place for companies, full of merciless competition. But yet, people continue to innovate and challenge this orthodoxy. Witness a couple of interesting new concepts.

Shericks ShakesBritain has always been a hotbed of innovation, and the country that brought us Pret a Manger and Innocent smoothies brings us this tasty treat. Mr. Sherick’s Shakes brings people a little bit of luxury to their day in the form of their high quality milkshakes.

Meanwhile in Japan, there is a growing trend manifesting in a wave of product launches in the soft drink category that are not cold, but instead hot. Witness this example of what has always been a cold drink, Ginger Ale, being brought into the Japanese market as a hot beverage by Coca Cola’s Canada Dry unit.

Canada Dry Hot Ginger AlePeople always love something new and different, even if it is something old that has disappeared from the market. This is why fashion runs in cycles, and in a mature category like soft drinks there is no reason why we shouldn’t keep these principles in mind and see if now is the time to bring something back, or to see if there is an orthodoxy that we shouldn’t now look at challenging to see if an opportunity might not be created.

Conclusion

Innovation transforms the useful seeds of invention into widely adopted solutions valued above every existing alternative. Value comes not just from physical invention, or business model innovation, but from psychological and emotional benefits as well and the creation of new psychological or emotional value can happen in any industry at any point in time, no matter how mature the category seems to be. We as humans are strange creatures and we simultaneously fight against change (and hold back innovation as a result) and embrace new things (or at least like to try them). So challenge your patterns of accepted thinking to look for opportunity and work to overcome your beliefs that everything that could be done has been done in your industry.

Keep innovating!


Build a common language of innovation on your team

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Inside Look at Culture of WordPress

Inside Look at Culture of WordPressInterview with Scott Berkun

I had the opportunity to sit down recently with fellow author Scott Berkun to talk with him about his new book The Year Without Pants, which catalogs his experience in two years with Automattic, the company that runs WordPress.com.

Our conversation touched on many different topics including innovation, collaboration, and organizational behavior.

For those of you who haven’t read the book or who aren’t familiar with how Automattic runs as an organization, here are some of the highlights:

  • All of the staff used to report to Matt Mullenweg, the 29-year-old creator of WordPress and founder of Automattic
  • When they passed 50 or so employees, about the time Scott Berkun joined, they introduced team leads
  • Organizational changes happen organically in the company, primarily when the pain gets great enough to force change
  • Automattic now has about 200 employees
  • Email is not the company communications standard – instead they use IRC and Skype and WordPress
  • Employees can work wherever they want
  • They have a company headquarters in San Francisco, but very few people work there
  • All employees get together in person annually and teams get together maybe twice in person to recharge intangibles
  • Hiring decisions are made not with traditional in-person interviews, but instead primarily by evaluating test projects
  • All new employees spend a couple of weeks working in support before occupying their intended role

Scott during his two years at Automattic led the Social team for WordPress.com and one of the things that he focused on while he was there, and that the book focuses on, is experimentation. One of the things that was fascinating in his detailing of his experience was that there was little resistance in his team to all of the experimentation that they engaged in. His theory was that they were ‘makers’ (he led a team of developers) and so they didn’t feel that there was a need to justify their existence. We spoke a great deal about why the culture at Automattic might be so accepting of experimentation, where other organizations are not, and this led to a discussion of some of my theories about the effects of scarcity and lack of firm growth, and we arrived at some of Scott’s comments that focused on the fact that there is too much fear in most organization and most managers don’t invest much time or effort in actually managing. Most managers don’t work to impact the feelings or environment for employees in companies that aren’t growing and/or where job opportunities are scarce. We then dug more into the culture topic.

Changing Culture is Painful

When it comes to culture change, there are a lot of consultants out there that would have you believe that they can come in an change your culture in 30-90 days, and while this might be possible it wouldn’t come without a great deal more pain than most organizations would be willing to bear. The reason a great deal of pain is required to affect culture change is the fact that an organization’s culture is typically determined by:

  1. The organizations cultural history and inertia
  2. The prevalent culture comes from the things that the largest number of people reinforce

So, in most cases changing the culture will require you to stop reinforcing behaviors that are reinforcing the current culture and start reinforcing behaviors that will lead you in the direction of the culture change you desire. What will this mean for the organization? Half the organization might leave! Are you ready for that? Many people who felt comfortable in the old culture, or that derived their power source from their old behaviors will need to be asked to leave the organization, or hopefully, will leave by their own efforts. Add into this potential chaos the fact that in most organizations the culture problem is often being created by the person asking for the culture change consulting, and how many consultants will reveal and stand behind this fact if it occurs?

One of the ways to ensure a healthy culture is constant experimentation driven by experiments that are instrumented for learning and dedicated to its pursuit. If an organization commits itself to a continuous practice of testing and learning within its management practices, in the same way that it hopefully dedicates itself to testing and learning with its products and services, then it has a much greater chance of maintaining a healthy, productive cultural environment. On the flip side, the way that we promote people in most organizations undermines the existence of a healthy, functional culture and so we need to rethink promotion. We need to ensure amongst other things that people with technical proficiency have a career path towards greater compensation that doesn’t have to include management responsibilities for those that don’t embrace the challenge and willingness to experiment in their management approaches. One of the reasons that Automattic’s culture is so strong, is because it was built to be entrepreneurial, collegial, and collaborative, and people are trusted to do what they do well (in their own way).

Of course I had to ask if people had left Automattic, and yes they have. In most cases the left to join other startups, and Scott believes that Automattic will probably stay in their minds one of the best places they worked.

Pressures From Outside

Another topic we touched on in our interview was whether or not Automattic felt pressure to make money faster after taking some VC rounds, but Scott said that while Automattic took some investment from VC’s, it was already profitable at the time and didn’t need the money but took the financing to gain other benefits and wasn’t under undue outside influence. As a result, Matt was able to purposely not assign a team or an individual to focus on growing revenue every quarter. he wanted to be careful not to turn up the monetization dial too fast because in doing so you often make bad decisions by doing so (product, etc.). There was no Store team when Scott joined, but there is now. Matt and team are very careful to maintain a long-term focus and they could easily monetize the 8th most popular web site more than they are (that’s a valuable asset), but are being careful in how they go about it.

Another thing I asked about was the impact on WordPress.com of things like Tumblr and Instagram and others, and Scott said that despite a lot of other companies and supposed competitors that have come along that have been hypothesized to supplant WordPress, they’ve never been super concerned. The reason?

WordPress itself is very flexible and so people are able to easily create themes that replicate the look and feel of a lot of the supposed competitors. The large WordPress community will build Tumblr like themes, etc. And the company itself is very resilient, and so when something new comes out, people will have a look at it and will either incorporate some of what they learn from it or ignore it if there doesn’t seem to be anything there. And, another point on the Automattic culture, if someone were to say “someone should…” in relation to something they see outside, then typically that person becomes the person to take it on.

There is a lot more I think we can learn from the Automattic experiment, and I may talk to Scott again to explore some of the learnings in the second half of the book, but wanted to rush these thoughts and nuggets from the conversation out to you. I hope they have been good for thought and you’ll think more if you’re a manager about what experiments you might run to see if you can make your group function even better.

Final Thoughts

Team size and how the organization grows up around its founder make a huge difference in how the culture evolves and reacts to its environment, and in Automattic Scott’s team was four when he started and nine when he left. The Theme team had 15 people on it, and the Happiness team (aka customer support) was the largest team at 25 people. One thing that happened along the way was when Scott’s Social team reached eight people it sort of naturally started to evolve into two separate sub-teams, which they called squads. Squad leadership was informal. There were no raises or title changes, and the squad leaders had naturally earned the most authority. They actually tried rotating leadership, but the results were mixed at best.

Another thing I asked Scott Berkun about team size was whether he thought the loose oversight and team structure would scale well as Automattic grows. He feels that it if they were to grow from say 200 to 1,000 employees they would probably insert another layer of management and break into groups of 100-150 people centered around product unit owners with teams underneath. This reinforces the thinking that they have at WL Gore, where they consciously spawn a new organization when it passes 60-70 people if my memory serves me correctly.


Build a common language of innovation on your team

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Join Me in Bahrain for an Innovation Masterclass

Braden Kelley Masterclass in Bahrain

Click here for more information on the masterclass

In this tough economy, innovation is one of the few ways for organizations and even countries to separate themselves from the competition and reignite their growth engines. I do a lot of public speaking all around the world and am a published author on the topic of innovation, having been invited to speak in countries as diverse as Belgium, Malaysia, Chile, Mexico, and the United States. Because of the rapid rise of the Innovation Excellence web site I built and sold, I am also frequently asked to speak on social media and relationship marketing.

My book, Stoking Your Innovation Bonfire: A Roadmap to a Sustainable Culture of Ingenuity and Purpose (John Wiley & Sons), equips organizations to identify and remove those barriers to innovation that have prevented them from achieving sustainable growth and change. I will share the profound insight, simplicity, and uncommon sense that have helped countless organizations get back their innovative spirit and leverage the collective wisdom and passion of their employees. The book has already driven numerous glowing reviews and sold out book events.

A sought-after public speaker, I do my best to make innovation and marketing insights accessible for audiences. At the same time, I will challenge the audience to question their assumptions about what it takes to successfully innovate, and creates dynamic, engaging interactions with attendees.

The seminar will be held on Thursday, 24 October 2013 at Diplomat Radison Blu Hotel – Bahrain. It is a mixture of lecture, group exercises, discussions and Q&A, and it will introduce the participants to the concept of innovation, how to find and generate creative ideas, and how to include innovation as a strategic driver to organizational growth.

Click here for more information on the masterclass


Build a common language of innovation on your team

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Backwards Innovation

A Case Study in Accidental Innovation

Backwards Innovation - Chipotle Mexican GrillAccording to Wikipedia, Chipotle was founded twenty years ago by Steve Ells (1993). Chipotle had 16 restaurants (all in Colorado) when McDonald’s Corporation became a major investor in 1998. By the time McDonald’s fully divested itself from Chipotle in 2006, the chain had grown to over 500 locations. Today, 37,310 employees at more than 1,400 locations in 43 U.S. states and Washington, D.C., three Canadian provinces, the United Kingdom, and France (all company-owned, no franchises), help Chipotle generate an annual net income of US$278 million (2012).

Also according to Wikipedia, founder Steve Ells attended the Culinary Institute of America before becoming a line cook for Jeremiah Tower at Stars in San Francisco. It was there that Ells observed the popularity of the burritos in the Mission District taquerías. In 1993, Ells took what he learned in San Francisco and opened the first Chipotle in Denver, Colorado, in a former Dolly Madison Ice Cream Store near the University of Denver campus using an $85,000 loan from his father. Ells and his father calculated that the original restaurant would need to sell 107 burritos per day to be profitable, but after one month, it was selling over 1,000 burritos a day.

But according to Steve Ells himself in the video below, he didn’t start out to create a chain of burrito shops, but instead opened the first one as a means to generate cash to open the restaurant he dreamed of opening. So he didn’t set out to help create the growing casual dining category, he didn’t set out to be the head of a multi-billion dollar company, but he did set out with a vision to create a restaurant that would serve fast and fresh Mexican-inspired cuisine.

See the Chipotle Story – How it All Started:

See more about the Chipotle Culinary Story:

Watch One Man’s Quest for Better Tasting Pork (while released in 2011 it, according to Wikipedia, details a journey made in 1999):

And it is in this journey to understand how he can source better ingredients at scale a couple of years ago that led to the 2001 launch of their Food with Integrity mission. Some of the most recent efforts to support this mission have become more fun and more social. This includes activities like the release of a video called Back to the Start that features a Coldplay song ‘The Scientist’ sung by country music legend Willie Nelson that was made available for download with proceeds benefiting the Chipotle Cultivate Foundation and its dedication to creating a sustainable, healthful and equitable food future.

And most recently, this year they have created an App called Chipotle Scarecrow that rails against factory farming and they’ve created this movie called The Scarecrow to promote the App:

Don’t worry, all of this is leading somewhere.

It has led me to an idea that I want you to consider as you look at your innovation efforts.

It is the idea of Backwards Innovation.

What is Backwards Innovation?

It is the idea that in our quest to become ever more efficient and more effective, sometimes we go too far.

Or we pass a point from which, we can actually create innovation by going…backwards.

So today, the area of greatest opportunity for innovation in the food industry is in backwards innovation, by creating value by seeking in some ways LESS efficiency and by becoming MORE effective in DIFFERENT ways.

So, as you all continue to seek innovation, you must sometimes ask yourselves:

  • In our quest for efficiency have we gone too far in some ways, or have we reached a point where opportunities are created that might at first glance look less efficient?
  • In our quest for greater effectiveness, should we now be seeking to be more effective in different ways?
  • Have we been seeking increased technology for so long now in this area that now people almost want less technology?

These are just three backwards innovation questions you might ask yourself.

What other backwards innovation questions can you think of?


Build a common language of innovation on your team

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Interview with The Entrepreneur’s Radio Show

Entrepreneurs Radio Show

I had the opportunity recently to sit down with Travis Lane Jenkins to record an interview for The Entrepreneur’s Radio Show.

In this interview we explore the following topics:

  • Why you need to innovate as a business owner
  • What is innovation and what it means to a business owner
  • What the 3 main Components of Innovation are
  • How to use innovation to take your business to the next level
  • Why operational excellence is important
  • What creates RISK when not innovating and investing
  • The difference between invention and innovation
  • Learn what collaborative thinking or partnership is all about
  • Incremental versus disruptive innovation

If you missed the link to the show above, click this one.

If you’d like to interview me for your site, your radio show, or your television program, please contact me.


Build a common language of innovation on your team

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Cookies ‘n’ Cream Oreos and Chicken Feet

Cookies n Cream Oreos

Chicken FeetNow you might be asking yourself…

What do Cookies ‘n’ Cream Oreos and chicken feet have in common?

In short, both cookies ‘n’ cream and chicken feet involve valuable delicacies that that come from what people previously thought of as waste products from the production of something that was seen as more valuable.

In the United States chicken feet used to be thought of as something that (A) we don’t eat and (B) that American chicken ranchers used to throw away. But in Asia they are a delicacy in several countries, and according to Wikipedia chicken feet sell for more money per kilogram than the chicken breast (the part here in the United States that we think of as the most valuable).

Meanwhile, Cookies ‘n’ Cream ice cream and now Cookies ‘n’ Cream Oreos are now both great ways for Nabisco to take sub par Oreo cookie wafers that might otherwise be thrown away and instead turn them into a valuable product.

In the same way, old fryer oil from places like KFC and McDonald’s used to cost restaurants money to dispose of and now with the demand for BioDiesel, these restaurants can now instead sell their old oil to third parties instead of paying someone to take it away!

So, you have to ask yourself as part of your innovation efforts, are there any waste products or outputs that we don’t think of as valuable that could be turned into something else valuable or that might have value to someone else?


Build a common language of innovation on your team

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Key to Innovation Success Revealed!

Key to Innovation Success Revealed!Achieving innovation success is not easy. Sustaining innovation success is even harder. The list of innovative companies that no longer exist is long, and some of the biggest enemies of innovation are ultimately complacency and resistance to change.

So what is the key to innovation success?

What lies beneath the artifacts of innovation success that we could point to in individuals or companies that we hold up as innovation heroes?

Well, as I tell the audiences of my keynotes, workshops and masterclasses around the world, innovation success rises up from the intersection of invention (which includes creativity), collaboration, and entrepreneurship. This is why you see these topics covered so much here on Human-Centered Change & Innovation.

Innovation is Invention Collaboration Entrepreneurship

Invention

Invention and creativity are incredibly important to innovation, but invention is not innovation and creativity is not innovation. Invention and creativity are but one component to creating successful innovation. And so yes, teaching your employees new creativity tools like SCAMPER or SIT, engaging in brainstorming activities after teaching people how to brainstorm properly, or providing your employees the space and time in their work lives to innovate will help you achieve greater innovation success, but they are not the secret. They are but one part.

Collaboration

There are a number of people traveling through the world of business and innovation literature spreading the myth that people are either innovative or they or not, that people either possess the innovator’s DNA or they don’t. To that I say “hogwash” (or sometimes something a little bit stronger). Innovation is a team sport and we all have a role to play. It is because of this belief that I created the Nine Innovation Roles and this framework for team-based innovation has resonated well with people all around the world. As a result, the Nine Innovation Roles from my book Stoking Your Innovation Bonfire have already been translated into Spanish, French, and Swedish, with Dutch and Chinese translations on the way soon. If you’re not familiar with the Nine Innovation Roles, they are:

  1. Revolutionary
  2. Artist
  3. Connector
  4. Magic Maker
  5. Customer Champion
  6. Judge
  7. Troubleshooter
  8. Conscript
  9. Evangelist

But understanding which of the Nine Innovation Roles you play on effective innovation teams is just the beginning. At the same time, we must begin to train our employees in the basic principles that power collaboration and teach them how to become effective collaborators. But collaboration is also only one component.

Entrepreneurship

Other than leadership, no other topic probably occupies a greater percentage of the space for business books in an American book store than entrepreneurship. This topic captivates the minds of people in the United States and in many other countries, and everywhere you go cities, states, countries, universities, and private companies are setting up incubators or startup accelerators to encourage entrepreneurship and innovation. This is important, but the importance of entrepreneurship is not limited only to the entrepreneur. At the same time, we must not forget the importance of intrapreneurship to the continuing health of our organizations. In some ways, intrapreneurship is MORE important to the innovation success of a country than entrepreneurship because collaborative, creative intrapreneurship is the flavor of entrepreneurship that keeps a country’s great companies alive (through this innovation intersection of course). Entrepreneurs and intrapreneurs are both important and we must consciously try to grow both in a successful society, and while intrapreneurs may not have the same tolerance for risk as an entrepreneur, they also need to understand how to make a business case and other core tenets of entrepreneurship.

Build a Common Language of Innovation

The Need to Integrate and Educate

I can state in no uncertain terms the importance for companies that are serious about innovation, and yes even countries or states or cities that are serious about innovation, to educate their people in the core knowledge, skills and abilities that relate to invention, collaboration and entrepreneurship. Companies need to educate their employees. Governments AND parents need to collaborate to teach their children. If you do this, your employees or your future citizens will have a much better chance of helping you achieve innovation success for your company or for your society. But even actively encouraging the intersection of invention, collaboration and entrepreneurship knowledge, skills, abilities and practice are not enough. The reason is because the power of this intersection does not represent the secret of innovation success. This intersection is central to sustained innovation success, but the secret lies elsewhere.

So what is the key to innovation success?

In one word?

The answer is…

CURIOSITY

Importance of Curiosity to InnovationDictionary.com defines curiosity as “the desire to learn or know about anything; inquisitiveness.”

Merriam-Webster defines curiosity as “Desire to know… Inquisitive interest in others’ concerns…Interest leading to inquiry

The reason that curiosity is the secret to innovation success is that the absence of curiosity leads to acceptance and comfort in the status quo. The absence of curiosity leads to complacency (one of the enemies of innovation) and when organizations (or societies) become complacent or comfortable, they usually get run over from behind. When organizations or societies lack curiosity, they struggle to innovate. Curiosity causes people to ask ‘Why’ questions and ‘What if’ questions. Curiosity leads to inspiration. Inspiration leads to insight. Insights lead to ideas. And in a company or society where invention, collaboration and entrepreneurship knowledge, skills, abilities and practice are encouraged, ideas lead to action.

So, if you want to have innovation success in your company or in your society, you must work to create a culture that encourages curiosity instead of crushing it. Unfortunately technology and the educational system in the United States and the rallying cry of “More STEM!” are having the unintended consequence of crushing creativity and creating a generation of trivia experts and linear thinkers for our society. We as parents and educators and managers must as a result seek to undo some of this damage. If you haven’t already read it, I encourage you to check out my article ‘Stop Praying for Education Reform‘.

Key to Innovation Success Revealed!We must find ways to reawaken the curiosity of our employees, to keep them curious, and to keep the curiosity of our children alive. We must find a way to fight against the tyranny of linear thinking and the ‘right’ answer, and instead inspire our children to continue asking ‘why’ – despite the fact that sometimes it can be annoying. 😉

To close I will leave you with a bastardized quote from the most interesting man in the world:

“Stay curious my friend.”

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

UPDATE – iPhone 5S mCommerce and Retail Implications

In my previous article on some of the potential implications of the iPhone 5S launch, I talked about how one of the things that wasn’t included in the iPhone 5S that I thought would be, was NFC technology (Near Field Communications).

Or at least I thought that Apple left it out…

That was until I came across this GigaOm article and this FastCoLabs article.

iBeacons mention on WWDC slide

But it turns out that while they left out NFC, they didn’t leave out near field communications technology. They have just implemented in a slightly different way – using iBeacons – Apple’s flavor of Bluetooth Low Energy (BLE) that actually achieves the same basic job as NFC, but in a much more elegant and capable way.

To give you a better idea of what this technology is capable of (in addition to mobile payments), I encourage you to check out the following video about Estimote Smart Beacons:

I truly believe that the kinds of things that will come out of the BLE technology built into the new iPhone 5S in combination with the new fingerprint authentication will represent a quantum leap in the value we extract from our smartphones in much the same way that the AppStore that came along a year after the launch of the original iPhone.

UPDATE - iPhone 5S mCommerce and Retail Implications

It will be interesting to see what develops around the iPhone 5S (and the Android and Windows 8 devices to respond) over the next twelve months.

Keep innovating!

Image credits: GigaOM


Build a common language of innovation on your team

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Interview for Top 75 Disruptive Experts Series

Interview for Top 75 Disruptive Experts SeriesAs part of Bill Jensen’s series of interviews with the Top 75 Disruptive Experts from around the globe, I had the opportunity to sit down with Bill and discuss several different questions about disruption in this video interview, including:

  1. Introduction
  2. My Favorite Disruptive Hero
  3. My Value Innovation Framework
  4. My Favorite Disruptive Change
  5. The Disruptive Change I Struggle With

Some of the key points I make in the video are importance of recognizing opportunities and seizing them, the impact of online services on how we all relate to each other and conduct our lives, my view on the key components to creating innovation success, and finally some thoughts on how evolving mobile capabilities are already changing our lives and how mobile will continue to change us (aka the mobile-centered human experience). Hope you enjoy it!

If you would like to schedule an interview with me for your online, television, print, or radio program, please contact me.


Build a common language of innovation on your team

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Fingerprints of mCommerce Success on iPhone 5S?

Fingerprints of mCommerce Success on iPhone 5SLast August I wrote about Apple’s pending acquisition of Authentec, a biometric authentication company (which has since closed). At the time Apple was in a real hurry to complete the acquisition and it made me wonder whether Authentec’s fingerprint authentication technology would make it into the home button of the iPhone 5 and eventually into the iPad and the iPad Mini. It didn’t.

But today, as part of the new iPhone 5S, Apple has finally integrated this biometric technology into their flagship mobile phone.

Why does this tiny little sensor represent such a potential sea change for the mobile industry?

Let’s look at all of the ways that this technology addition makes the iPhone more valuable than other phones.

1. Security and Personalization

By integrating the Authentec technology into the iPhone 5S home button, and eventually the iPad and the iPad Mini, Apple can not only create a handy way (no pun intended) to eliminate the need for remembering passwords, but also enable people to make their devices easily personalized for MULTIPLE users of the same device.

But if Apple takes advantage of all the purported abilities of the Authentec technology, the new iPhone 5S may also have the ability to recognize multiple fingers from a single individual, allowing for the home button to potentially achieve multiple functions – like the multiple button mouse.

In practical terms, this means for example that if your five-year-old gets a hold of your iPhone 5S, or you let them have it to keep them occupied in a restaurant, the iPhone 5S could potentially keep them from making phone calls, opening your work emails, etc. or just limit them just to accessing the Apps you grant them access to. But there is also no reason why apps like Netflix could also become personalized based on whose finger was used.

And maybe finally Apple will finally introduce some parental controls on the iPad. It’s maddening as a parent that my only choice on our iPad is to either give my daughter full access to Safari, or no access to Safari and that I have to go in and re-enable Safari when I want to use it. What decade is this? Hopefully iOS 7 will fix this.

2. iTunes and App Store Authentication

For Apple, there are also legal and financial benefits from adding fingerprint authentication, as it will help to prevent (or at least reduce) unauthorized iTunes purchases made by account hackers or children playing with their parent’s iPhone 5S (or upcoming iPad 5). Fingerprint authentication in iPhone 5S and iPad 5 may also encourage people to begin utilizing Apple’s Passport.

3. Universal mCommerce Authentication v1.0

It is embarrassing that the United States is so far behind the rest of the world when it comes to mCommerce. Mostly this has been because the financial services companies (Citibank, Bank of America, Chase, Wells Fargo, American Express, Mastercard, Visa, Verisign, etc.) and mobile phone carriers (Verizon, AT&T, Sprint, T-Mobile, etc.) have been fighting to control mCommerce in the United States to the detriment of United States citizens and consumers and mobile innovation. Shame on you!

The new iPhone 5S might help to reignite mobile innovation and mCommerce activity in the United Sates. And given that Apple makes most of their money selling hardware and are facing a market share challenge from Android and Windows 8 devices, it is in Apple’s best interest to open up a fingerprint sensor API in iOS 7 for third party app developers to utilize. This would maximize the potential differentiation and hardware sales, and the incremental device lock-in offered by this new capability.

But there are also increased revenue opportunities for Apple, as integrated fingerprint authentication is likely to lead to an increase in impulse iTunes and App Store purchases. Why will a fingerprint sensor likely lead to an increase in music and app purchases for Apple? Simple, it will make it easier and faster for people to buy things from iTunes or the App Store, and give consumers less time to change their mind after they get the urge to buy something.

One thing I didn’t see mentioned in Apple’s iPhone 5S announcement was the inclusion of any kind of Near Field Communication (NFC) capability in this latest flagship model. So v1.0 of Apple’s universal mCommerce authentication capabilities may only include authentication of eCommerce purchases made via mobile web sites or mobile apps. Without NFC I’m not sure exactly how authenticated purchases in the physical world would be made, short of a scanner reading a post-authentication-generated QR Code or something like that. Of course there is a way (or several) and mobile innovators surely will find them until NFC is incorporated into future iPhones and iPads.


Build a common language of innovation on your team

4. Universal mCommerce Authentication v2.0

Once NFC capabilities are added to the iPhone, then people like Square, but also traditional banks, and even Google could add iPhone 5S fingerprint authentication to apps for mCommerce for users to download and install on their phone. This represents a HUGE opportunity for Square and a challenge obviously for the established players. It will be interesting to see whether Apple will be the first to integrate fingerprint authentication together with NFC or whether Samsung or someone else will beat them to it, or even whether it might be able to be added via a 3rd party case or backing for the phone. What do you think?

Wrapup

The initial iPhone turned your finger into a more useful tool for the digital world. The new iPhone 5S turns your finger into a key, and how many locks it will help you open remains to be seen. Let’s hope that in the same way that the iPhone broke the stranglehold that the mobile carriers had on application innovation on the handset, the new iPhone 5S will create a new wave of mobile innovation in the mCommerce space.

Let’s hope that Apple’s new iPhone 5S gives new meaning to the phrase ‘Digital Innovation’.

Okay this time the pun is intended, and hopefully it will help some of you think of new possibilities for digit-driven computing.

Keep innovating!

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.