Innovation – the Intersection of Fear of Status Quo, Opportunity and Talent

At InterWest, I recently had the pleasure of hosting an executive team from a 100 year old insurance company. They were visiting Silicon Valley in order to meet with various “innovative” companies in order to learn how they might themselves become more innovative.

The format of the meeting was a discussion between myself and eight executives. They wanted to know how we, InterWest, identified innovative ideas and/or sponsored innovation inside our portfolio companies.

It was easy to answer the latter – we don’t.  We are investors in ideas we believe are innovative but we are not the creators of that innovation – at least not typically. It is the entrepreneur and the team that are the innovators.

Letter To IBM

Dear IBM:

Congratulations on your recent acquisition of Kenexa for $1.3B. The HCM application market has been steadily heating up and with SAP’s recent acquisition of SuccessFactors and Oracle’s purchase of Taleo, this looks like a good counter move.

Your announcement coupled with the recent news that Apple has become the most valuable company in the world prompted me to write this.

As I thought more about Apple and IBM and their respective positions in the current technology markets, I realized just how different the two companies are today from two decades ago.

Twenty years ago, when I worked for Apple as a young engineering director, IBM was “the” business information technology brand. Apple was nowhere – except in niche areas such as graphic design.

Under Steve Job’s leadership, beginning with his return to Apple in the mid-90’s, Apple emerged from near oblivion to become one of, if not ‘’the’, most powerful consumer – and business – technology brands.

Today, Apple’s products are used pervasively by people – at home and at work -  throughout the world. Apple has become the leading mobile platform developers target for consumer and business applications.

IBM, in the early 90’s, was faced with its own set of challenges stemming from poor financial controls, lack of innovation and other issues. Gerstner is appropriately credited with solving these and his successors – Palmisano and Rometty – have continued that success.

Now, IBM’s stock is at a near all time high, more than doubling over the past 3 years.  The Company invests in all the right buzz areas: Cloud Computing, Analytics, Mobile, etc. Wall Street is singing IBM’s praises.

Yet, in spite of all outward appearances, I respectfully submit that IBM may be headed toward another very rocky and challenging stretch of waters.

The Emergence of ADD in the Consumer Markets

Just a few short decades ago, consumers had a limited selection of real-time information and entertainment sources to choose from; TV and radio – on a very finite number of channels and stations.

Consequently, for brands and retailers, gaining access to consumers was relatively straightforward. All they had to do was to identify the demographics of the audience viewing content on these finite sources and pay the TV and/or radio network to deliver targeted messaging – ads – against that content.

Then, as well as now, quality content has been one of the biggest challenges facing TV and radio networks. Since inception, these networks have competed for content to ensure they had an appropriate target audience that advertisers would pay to access.

For those who don’t remember, in the 1940’s and 1950’s consumer product companies (e.g. P&G, Colgate-Palmolive, etc.) even sponsored content – soap operas – to secure viewers for their advertising.

Today, consumer brands and retailers have virtually unlimited access to consumers. In addition to traditional TV and radio network programming, they can use social media, email, Internet-based advertising, and other paid and earned media alternatives to easily access consumers – and relatively inexpensively.

How Will Salesforce Adapt to the Next Platform Shift: Mobile Computing?

I posted an article on TechCrunch last Friday. The title of the article was “How Will Salesforce Adapt to the Next Platform Shift: Mobile Computing?”

The purpose of the article was to point out that every decade or so a new computing platform emerges. Market leading incumbents typically have the most to lose when these shifts occur and typically have the most difficult time making the transition due to legacy architectures and revenue streams dependent upon preserving the status quo.

Please….For Crying Out Loud…Stop the Rants!

With the upcoming election, I feel as though I am being pummeled with rants from both the left and right via traditional and now social media. Four years ago, there were a lot fewer FB users and a lot less of the ranting.  Now, it has gotten so bad, I wrote the following and posted it on my FB feed: