Solving the Life vs Glory dilemma - 2

Recap: In my earlier posts I described and analyzed in detail a typical dilemma situation: a person faces mutually exclusive choices. For example, the ancient Greek hero Achilles has to choose between dying young with eternal glory or living a long, uneventful life. The modern hero Neo from the Matrix has to chose between the Red pill and the Blue pill.

In art, heroes choose dilemmas. In real life, we try to get away from them by picking a reasonable trade-off - "the middle way." A fundamental characteristic of a dilemma or trade-off situation is the existence of "The Box." The Box represents a set of constraints, either visible or invisible. The first step to think outside the box is to discover what the box is.

In the Achilles example, we've established that he is locked in the box of personal mortal combat with an opposing fighter - Patroclus. Even if Achilles wins today, sooner or later a new fighter will be born to kill him. That is, once you've entered the dilemma box, the choices are unavoidable: Achilles wins some great battles, but he is eventually killed by Paris, who, in turn, dies in combat later.

At the first glance, the Achilles' Life vs Glory dilemma seems to have no happy outcome. On the other hand, we've established that another Greek Hero - Odysseus - had found a breakthrough solution: he reached eternal glory AND lived a long, fulfilling life. How did he do that?

First, let me say that the Achilles' box is version of a theoretical construct created by economist Francis Ysidro Edgeworth in the 19th century. It serves as a foundational principle for the modern economics of free markets, where people make rational choices about allocation of limited resources. That is why the first principle of economics is often stated as "Everything is a trade-off."

In Sclalable Innovation (Prologue), we show that great innovations often happen when people break trade-offs and dilemmas, instead of strengthening them. Odysseus is no exception. As a creative individual, he sees outside the Achilles' box. In his thinking, a 3-rd dimension exists - gods and other people (fig below).

When Odysseus encounters a tough challenge he leverages this dimension to generate a broad variety of coordinated actions. During the siege of Troy, he finally defeats the enemy city by getting one group of Greeks build the Trojan Horse, another group to hide inside it, yet another to rush the city when the Horse is inside, etc. This pattern of problem solving repeats when Odysseus runs into trouble on his way back home to Ithaca. For example, he uses the help of his team to defeat the Cyclops and escape from the cave. (Even the Cyclops' sheep act as "members" his team.) Odysseus accomplishes the impossible feat of listening to the song of the Sirens and surviving it too. (I posted about his solution in detail in 2011). Odysseus returns home to Ithaca and restores himself as the rightful king, by craftily creating a coalition of players and arranging the circumstances to benefit his cause. As the result of his adventures, Odysseus achieves eternal glory AND ensures that he has a long life.

In short, Odysseus is a 3D strategist, while Achilles is a 2D tactician. Achilles thinks inside the box, while Odysseus thinks outside it, by discovering dimensions of the situation that Achilles cannot see. In these dimensions, he finds opportunities for novel actions and their novel combinations. To motivate his allies, he uses certain psychological effects, which I'm going to cover later.

tags: creativity, problem, solution, dilemma, trade-off, separation, breakthrough, luck, control

Invention of the Day: Anaesthesia.

October 16, 1846 is the official birthday of anaesthesia, the art of preventing a surgery patient from feeling pain. On that day, surgeon Dr. Warren publicly demonstrated a painless tumor removal at the operating theater of the Massachusetts General Hospital. To anaesthetise the patient, Dr. Warren used the method invented by dentist William T.G. Morton. Under the invention, the patient was rendered unconscious by inhaling ether, an organic compound known to people since the 8th century, but never used in medicine before. The invention of practical anaesthesia (along with methods to prevent wound infection) created the world of modern surgery. The 1846 invention was a breakthrough that allowed people to control one of the basic biological experiences - pain.

Morton's US Patent 4,848 on the medical use of ether was never enforced due to public outcry.

Lunch Talk: History of Gaming

This is a university video-project made by "Game Design"-students from munich.

Games:
Tennis for Two, Oscilloscope, 1958
Pacman, Arcade, 1980
Donkey Kong, NES, 1986
Sonic the Hedgehog, Sega Mega Drive/Genesis, 1991
Street Fighter II. SNES, 1991
Super Mario 64, Nintendo 64, 1996
Final Fantasy VII, Sony Playstation, 1997
Need for Speed: Hot Pursiut 2, Sony Playstation 2, 2002
Ecco the Dolphin, Sega Dreamcast, 2000
Super Smash Bros. Melee, Nintendo Game Cube, 2001
Wii Sports Golf, Nintendo Wii, 2006
God of War III, Sony Playstation 3, 2010
Rock Band, XBox 360, 2008

On a related topic,  here's a good example of how a breakthroug technology delivers a better solution at 1/10 of the original price.

Cartridges are a very expensive medium, however, and many game developers resented Nintendo’s decision to continue using them. Sony’s licensing structure was built around a $10-per-game arrangement that included manufacturing disks, manuals, and packaging.
Compared to the cost of pressing CDs, manufacturing cartridges for Project Reality would be prohibitively expensive. At the time, it cost more than $20 to manufacture an 8-megabyte cartridge, compared to less than $2 to press a 640-megabyte CD. And the additional storage space on CDs could be used for video clips, animations, audio files, music, and larger games. -- The ultimate history of video games.

 tags: lunchtalk, gaming, 10X, trade-off, breakthrough, 

(ES) Creating business with 10X change.

Gordon Moore, of the Moore's Law fame, writes about his experience of creating a breakthrough technologies at Intel,

...at the time the first microprocessors were shipped, the total annual market for computers in the world was something like 10,000 units. The microprocessor would have been a commercial disaster if all we did was to replace those 10,000 units with cheaper processors.

I remember going to a conference and speaking before a group that was more involved in applications than devices and explaining to them that we had to ask big questions, like, ‘ How are we going to develop markets that can use 100,000 of these a month?’ (While one hundred thousand a month doesn’t seem like many now when compared to the tens of millions shipped currently, it sure did then.) Ted’s insight and the Fairchild experience with ICs helped us understand that this product had countless uses, but we also understood our efforts alone would build volume markets.

 To summarize, the goal was to create a market that could absorb 10 times more units shipped in a ten times shorter period of time. It's likely that Andy Grove's notion of a 10X change comes from the same early days at Intel.

Source: SIEPR Discussion Paper No. 00-45. Gordon Moore, Kevin Davis. Learning the Silicon Valley Way. Stanford University, 2001.

tags: 10X, 4q diagram, business, breakthrough

The market side of breakthrough technology and business model.

The latest numbers from Asymco show that Apple, with 9% global share of physical mobile phones, has 75% of industry profits. All other manufacturers are fighting each other, supplying the market with commodity devices and services.

For more detail, see CNET.

Simply put, the iPhone ecosystem has no substitutes.

tags: mobile, innovation, apple, breakthrough, niche construction

Genetic sequencing: from $3B to $1K in 12 years

The cost of human genome sequencing is dropping incredibly fast. Jonathan Rothberg, CEO of Ion Torrent, claims that in a year, using their Personal Genome Machine, doctors will be able to do the job for $1,000. The new technology will allow, among other things, for efficient analysis of cancer cell mutations and development personalized drug therapies similar to the ones used to prolong Steve Jobs' life (According to Isaacson's book, Jobs' treatments cost $100K per pop.)

The key to this breakthrough, says Rothberg, is that the PGM does not rely on conventional wet chemistry to sequence DNA. Instead, it works almost entirely through conventional microchip technology, which means Ion Torrent is leveraging decades of investment in conventional transistors and chips. (click to watch a 24min video of Rothberg's talk at MIT.)

Here's a cost curve for human DNA sequencing over time. The breakthrough happened around 2007.

 

Source:  the National Human Genome Research Institute (NHGRI).

tags: 10x, health, biology, computing, breakthrough

Trade-off of the Day: Ease of access vs Security.

From MIT Tech Review:

Employees using such gadgets to connect remotely to company servers and e-mail accounts can boost efficiency; but the practice also creates security challenges. Companies will have to learn how to overcome those challenges for the distributed office of the future to succeed.

Breaking this trade-off will enable the next wave of internet (for the lack of a better word) innovation. tags: mobile, internet, control, trade-off, information, cloud, breakthrough, growth

The beginning of the real green revolution.

Electric cars and less expensive batteries begin playing the role of dynamic storage that can respond to variations in supply of local solar or intermittent wind energy. It's far from a breakthrough, but it's a good first step.

The system uses the Leaf charging station to draw from the car's lithium ion batteries and feed current into a home's electricity distribution panel. The 24 kilowatt-hours of energy storage in the Leaf is enough to power an average Japanese home, which uses about half the energy of an average U.S. household, for about two days.

If a person pays a higher price for electricity during peak times, it's possible that charging a battery at night and drawing on it during peak times could save consumers money. That's the vision of many battery companies which envision home energy storage as a way to store energy from the grid or solar panels.

The problem with Nissan's proposed setup is that after the car battery is drained, e.g. during a blackout, it becomes useless for transportation too. Not good. They need a source of cheap and/or intermittent energy that would be wasted if not stored in the battery.

In system terms, they have to solve a synthesis problem, not just graft Leaf onto an existent grid. Maybe they should make a deal with Google to build distributed local storage infrastructure.


tags: innovation, synthesis, storage, s-curve, source, control, energy, 4q diagram, environment, trade-off, breakthrough, example

A strategic false belief in trade-offs

In his seminal paper "What is Stragegy?", cited 4367 times on Google Scholar and included into every business strategy textbook, Michael E.Porter writes:

But a strategic position is not sustainable unless there are trade-offs with other positions. Trade-offs occur when activities are incompatible. Simply put, a trade-off means that more of one thing necessitates less of another. An airline can choose to serve meals - adding cost and slowing turnaround time at the gate-or it can choose not to, but it cannot do both without bearing major inefficiencies.

Anyone who flew on a commercial flight recently can attest that the latter part of statement is false (italic, bold - ES). Airlines do serve meals AND they make money on this service by charging for the food. They also charge for luggage and other conveniences, more than compensating themselves for the inefficiencies.

U.S. airlines collected $3.4 billion for checked luggage last year, according to a government report issued Monday. That’s up 24 percent from 2009 and a big reason the industry made money again after three years of losses. In 2010, the major airlines made a combined $2.6 billion in profits, less than they collected in bag fees.

The trade-off once considered fundamental by the top business strategist turned out to be a false belief into what can or cannot be done - a simple lack of imagination. People believe in trade-offs because they are taught to believe in them. Once somebody figures out a way to break the trade-off - puff! - the whole business strategy based on it falls apart.


tags: trade-off, strategy, business, barrier, constraint, soft, trend, innovation, breakthrough, model, quote

10X change: a baby in one month from 9 pregnant women.

In today's interview with MSNBC, Warren Buffet, while talking about the sorry state of the world's economy, uses the famous "one-month baby" metaphor. Describing the government's inability to jump-start a new growth cycle he says,

"But you can't produce a baby in one month by getting nine women pregnant, you know. (Laughs.) It just doesn't work that way. So you can be throwing things at the economy and they will have an impact, but they haven't had much impact yet."

Economic issues aside, why is it considered impossible to produce a baby in one month? Think about it: 255 babies are born every minute in the world. This means that with the right impregnation strategy we can produce a baby every quarter of a second! This simple calculation shows that producing one baby in a month must be a pretty trivial task. All you need to do is to run an infinite process that impregnates one woman every month. Once you decide to have a baby, you are guaranteed one in no more than 30 days. Maybe even less. So, why do we have this notion the problem is impossible to solve? What are the assumptions that prevent us from thinking creatively?

With this background, here are some tasks for class discussion:

1. Draw a 10X diagram for the "baby in one month problem".
2. Identify key parameters of a disruptive, rather than "normal" impregnation/birth business model.
3. Come up with technologies that enable this disruptive business model.
4. Draw a 10X diagram for an economy in recession.
5. Come up with a disruptive growth business model.