The juice IS worth the squeeze...

To build a shoe, you need to create molds for all the plastic and rubber parts and dies to cut the patterns for the leather and fabric pieces. When I started at AND 1, every shoe required the services of a designer, a developer, a materials engineer, mold technician and a pattern expert. It took 10 months and countless hours to get to a final product that could be tested, modified and put into production.

6 years later a designer could press print in Portland, OR and a CNC machine in China would carve production ready molds out of a block of aluminum. Technology product replaced the services of 4 people and allowed the vision holder to cut the metal. No translation or interpretation needed. The time from vision to actual product was shortened by a factor of 10 and we could now go from design to a production ready shoe in 30 days.

The most innovative designers, developers and engineers, drove creation and adoption of new technology platforms in the footwear industry. They leveraged technologies to move the vision holders closer to the consumer and redefined the steps in the product creation process. They also redefined the skills that were critical to a company’s success and drove a shift in resources from the steps required to build a single product to the process of product innovation – test and learn as fast as possible.

I see the same thing happening in technology today as some of the most innovative people across the industry produce products out of what used to be services. Platform as a service businesses from telco, to location, to mobile and infrastructure as a service businesses may serve as layers in the technology stack, but they are also compressing the innovation stack. The building blocks are getting bigger and more easily manipulated and this revolution is evident in modern programming languages like Ruby and Node.js and open source resources like GitHub and others.

In the footwear industry, the most effective companies leveraged platforms and products to free their best people to focus on unique, innovative solutions that were proprietary and built enterprise value. Ben Horowitz describes the power of a change in product development focus in the technology industry as the shift from mainframe to client/server computing lowered the effective cost of CPU cycles and drove adoption of relational database architecture instead of hierarchical database architecture:

By moving to the relational model, developers were released from the tedium of navigating hierarchical databases and used their new found freedom to rewrite every existing application…

Platforms replace people and redefine what is commodity by converting services into products. When this happens, the most creative people are empowered to unlock incredible innovation and dive more directly into the product. Iteration becomes cheaper, minds become focused and products become better, faster. However, if your company is not actively compressing the innovation stack and leveraging platforms to create direct connection between vision holders and customers it is game over.

In my new role as an investor in the technology space, I make a similar distinction between inventors and innovators and while I love to meet with inventors, if you are not also an innovator, it is unlikely I will want to be an investor. Here’s why:

Merriam-Webster defines “invent” here as “to produce for the first time through the use of imagination.”

“Innovate” is defined here as “to introduce as or as if new” and “to make changes, to do something in a new way.”

Inductive charging, one type of wireless power transfer, is a cool invention with many potential applications. Wikipedia describes inductive charging here and lists the convenience of charging mobile devices on a “contact plate” instead of with a wire and plug as one of the benefits.

This has recently been popularized by the “powermat” This product is technically innovation as the producers did not invent inductive charging, but the mindset of this product team is more inventor than innovator.

You can see in the image above that one of the ways to use the powermat is a cube with a mini-USB charging cable. This offers zero marginal improvement for the customer over a traditional wired charging experience, but it utilizes the inductive charge capability of the mat. – inventor mission accomplished. In general, the powermat is not better than a well organized approach to the wired solution like this box.

the "powerbox"

Alternatively, the video at the bottom of this post illustrates an understanding of the consumer and if integrated into a line of furniture would create an entire new experience and offer significant utility. Thanks to Darren Murph at engadget for bringing this to my attention with this article and including links to a full “how to.”

Inventors create technology for the first time through unprecedented imaginative effort. Because inventors create things that have never been seen before, value accrues to the first person or team to make the technology work and the process is driven by the original vision. Innovators introduce concepts “as if new” implying iteration and the integration of external data – such as from consumers – and value accrues to the first person to discover product-market fit.  Inventors tell the market what they have while innovators listen to the market and deliver what it asks them to create.

Wood Induction Charger from Jason V on Vimeo.

If you are an innovator or an inventor or both, I hope you will continue this in the comments.

Click the pic to get Andy Goldsworthy's book from Amazon

A couple days ago I saw Ted Schlein speak at Wharton. He focused on the importance of Green Tech and KPCB’s investments in thst area, but he did take some time to speak more generally about the risks that face a new business and therefore any venture investment. According to Ted, there are four types of risk that all start-ups face:

1.    Market Risk
2.    Technical Risk
3.    People (management) Risk
4.    Financial (Funding) Risk

He also pointed out that these risks are cumulative and add up to a total level of risk that is or is not palatable to venture capital investors and angels. In the current environment, reducing risk without limiting innovation should be a top priority for entrepreneurs.

Based on my experience with Yourself!Fitness I think technical risk can be lowered though a specific approach to innovation that leverages new applications of existing technology to solve a consumer need rather than investing in significant technical R&D. While working on Yourself!Fitness, consumers told me that they loved home fitness video for its convenience and price, but that it was boring, did not help them track their goals and did not feel personalized to meet their needs. Based on this, I decided a successful product would deliver a personalized, interactive and goal-oriented fitness experience to the consumer’s living room.  We could have tried to advance the DVD experience or create On-Demand video or web-based workouts delivered to the television. In the end, each of these would have required us to develop new technology and integrate with existing infrastructure in new ways. Instead of taking on these technical challenges, we decided to utilize the gaming platform in a new way (for 2003) and deliver a fitness game for women. In doing so, we mitigated our technology risk and focused all of our attention on market risk. As it turned out I should have focused on people and legal risk, but I digress.

Wikipedia defines creativity as “a mental and social process involving the generation of new ideas or concepts, or new associations of the creative mind between existing ideas or concepts.” In today’s market, entrepreneurs who are able to focus on “new associations” rather than “new ideas” will build businesses with competitive upside potential for value creation and much more appealing risk profiles. By taking processes and technologies that work in one area and applying them in a new way or to a new consumer problem, old becomes new, the proven technology becomes the foundation for a creative solution that delights the consumer.

the artist Andy Goldsworthy provides a great example of this type of lateral thinking and illustrates this point.

Think about a snowball and answer these 5 questions:

1.    Where is it?

Context is everything

2.    What time of year is it?
3.    How big is it?
4.    What is it used for?
5.    What’s left when it’s gone?

How could a snowball become art?
1.    Put it in the middle of a busy city sidewalk.
2.    Put it there in the middle of summer.
3.    Make it 5-10 feet tall.
4.    Make people confront it, stop and look at it, touch it, talk about it.
5.    Fill it with natural elements so that when the snow melts, there is a reminder of the magic that took place.

The snow is just snow, but its application, impact and value are completely different. Entrepreneurs who can feel summer coming and start creating mid-summer snowballs while the rest of the world is still focused on surviving the winter will be the ones who build the great companies that emerge out of these difficult times.