McDonalds with a purpose.

Govindappa Venkataswamy, an opthalmologist, passed away July 7th. He’s not an American icon, but could (and should) be for his entrepreneurial ways. The WSJ just began a weekly column honoring the passing of prominent business figures, and Dr. V’s passing is an especially nice way to inaugurate the column.

Dr. V Started the Aravind Eye Care System with an 11-bed clinic in 1976, and has since grew it into a five-hospital system. The Aravind system provides affordable surgery for the masses–quite literally–and now impoverished cataract patients can have their eyesight restored for about $40–and if that’s too much, for free. It also proved that there was a way to make money at the bottom of the pyramid; the free are paid out of the profits of paying patients.

What makes the Aravind system interesting to innovation is the origin of its success:

He was inspired, Aravind says, by the assembly-line model of McDonald’s founder Roy Kroc — learned during a visit to Hamburger University in Oak Brook, Ill. … “Can’t we do what McDonald’s and Burger King have done in the United States?”

Sound familiar? In 1910, when Ford’s engineers came back from studying the assembly lines of the Chicago meatpacking plants (first publicized in Upton Sinclair’s 1906 book, The Jungle), one of his chief engineers said “If they can kill pigs that way, we can build cars that way.” From food to cars to food to the operating rooms of Tamil Nadu:

The assembly-line approach is most evident in the operating room, where each surgeon works two tables, one for the patient having surgery, the other for a patient being prepped. In the OR, doctors use state-of-the-art equipment such as operating microscopes that can swivel between tables. Surgeons typically work 12-hour days, and the fastest can perform up to 100 surgeries in a day. The average is 2,000 surgeries annually per surgeon — nearly 10 times the Indian national average. Despite the crowding and speed, complication rates are vanishingly low, the system says.

What if the best ideas of modern economies were, with care, put to better use? As Dr V said, ” Intelligence and capability are not enough. There must be the joy of doing something beautiful.”

The ethanol mousetrap (and moonshot)

As Ethanol, the solution du jour for our energy needs, comes into the spotlight, it reveals itself to be as realistic a near-term solution (and long-term panacea) as its predecessor, hydrogen. Ethanol will not now, nor may it ever, provide the energy independence people seek. As Julia Olmstead writes in Counterpunch:

Improving fuel efficiency in cars by just 1 mile per gallon — a gain possible with proper tire inflation — would cut fuel consumption equal to the total amount of ethanol federally mandated for production in 2012.

Many others have made this same point before. What’s interesting, to this innovation-obsessed blogger, is the underlying impact that the concept of ethanol and other innovations has on the innovation process itself–especially when that process requires public effort and political will. What does the thought of a simple, clean solution just around the corner do to our ability to act with the solutions we hold in our hands (like raising mileage standards by 1 mpg)?

If a bird in hand is worth two in the bush, why is a technological solution in hand worth less than one around the corner? Is it the promise that this next one will take less effort and will to implement than the ones we have available today?

That promise of the better mousetrap that sells itself undermines more than just green technologies. It undermines innovation in organizations big and small. The possibility that tomorrow’s idea will be easier to implement than todays keeps us tolerating the status quo. It’s just like Annie sings: “The sun will come out, tomorrow. You can bet your bottom dollar.” Or was she pushing solar?

Launching the Energy Efficiency Center

Yesterday, we launched the first academic Center focused on the commercialization of energy efficient technologies. The Energy Efficiency Center (EEC) was created with a $1M grant from the California Clean Energy Fund (CalCEF) represents a rather unique and interdisciplinary collaboration across the colleges of Engineering and Agriculture and the Graduate School of Management. California’s Governor Arnold Schwarzenegger gave the opening remarks (for related articles, I’ve provided links below).

The Center represents a new direction in the development of energy efficiency and, I hope, other sustainable technologies, as it brings the perspectives and resources of the entrepreneurial community into the conversation–the voices not only of the end-user, but also of investors, suppliers, resellers, and countless others.

As the founding Director of the Center, I gave these brief remarks:

In 1882, Thomas Edison threw the switch at his Pearl Street Station and created an energy revolution. But history can be deceiving. Edison neither invented the light bulb nor perfected its performance. That technology was 40 years old by the time Edison got to it.

Edison’s impact came not from inventing a new technology but, instead, from finding the right business model that would bring this emerging technology into the marketplace–a business model that would be embraced by customers, yes, but also investors, suppliers, regulators, and a host of other eventual stakeholders.

Thanks to the vision and support of the California Clean Energy Fund, the Energy Efficiency Center at UC Davis represents the first effort solely focused on bringing the emerging technologies of energy efficiency into the marketplace.

With the support of CalCEF and in partnerships such as we have now with PG&E, this center will be a catalyst for raising energy efficiency and reducing energy costs in California transportation, building, and agriculture—by bringing rigorous science and practical solutions together with sustainable business models.

Researchers at UC Davis and partner institutions already lead the nation in much of the science and technology of energy efficiency. This work can be seen, for eample, in the Institute for Transportation Studies where innovations are bringing the power of information technology and the internet to problem of traffic congestion and trucking logistics.

Other similar innovations are coming from the California Lighting Technology Center, where they are working in partnership with utilities, manufacturers, and customers to develop new technologies and standards for lighting—some of which can be seen in this building. And from research in Agriculture and Food Processing, where new sensors can improve the efficiency of irrigation pumps and reduce water consumption.

Dan Sperling, in particular, has been a driving force behind the formation of this center and his work has made UC Davis a national and international leader in energy-related research. He will play a key role in this center as its Associate Director.

This center will change the way we study energy efficiency, the way we teach it, and the ways in which we work together with the public and private sector to develop real and lasting innovations in energy. Keep an eye on us.

Here is some of the initial press reporting on the launch:

The downside of open innovation

There’s been a lot of writing lately about the valuable role that a firm’s customers (and others) can play in generating innovations. Chevrolet tried this recently, and found out what happens when you ignore a large part of your (potential) customers and then, finally, give them a voice in your innovation process. Autoblog just posted a very interesting set of videos created by “users” for GM:

As part of a creative new ad campaign for the new Tahoe, General Motors has teamed up with Donald Trump’s ‘The Apprentice’ franchise to create a website that allows prospectives to make their own commercials online. The website allows readers to select backgrounds, video shots, and input text in an attempt to win prizes ranging from a Jackson Hole Getaway to a trip to the Major League Baseball All-Star Game.

Some of the videos created can be seen here…for as long as GM doesn’t notice them. At which point, we’ll see where they turn up on the web. one two three

What a difference a day makes

Last month I talked about the long, thankless efforts at innovation that predate a technological “revolution” (see earlier Politics of Technology). In the evolution of WiFi technology at the city-scale, we maybe seeing the shift in the adoption curve (from the long nascent tail to an explosive adoption rate). In part II, the incumbents shift from fighting the new technology to embracing (or at least exploring) it.
The WSJ today reports on the recent change of mind by the CableCos and Telcos, from suing municipal wireless efforts to competing with them: WiFi landgrab. This may be because they failed in 13 of 14 efforts to legislate away free municipal wireless last year. Or because it’s become apparent that, while they’re busy lobbying, others like Google, Earthlink, and many local others are out there building networks:

More than 50 municipalities around the country have already built such systems, and a similar number are at some stage in the process, including Philadelphia, Chicago, San Francisco and Houston, according to Esme Vos, founder of the Web site, which tracks such projects nationally. By 2010, ABI Research forecasts a $1.2 billion market for the wireless technology used in the city systems.

In 10 or 20 years, this shift and its causes will be lost to some economic arguments about the inevitable forward progress of technological change, but it was critical nonetheless in shaping the paths taken (and not). Will Muni WiFi be the disruptive technology that undermines the grip of Cable and Telcos, or will it simply enhance their position? The answer, it seems, has less to do with the technology than with how (and why) those incumbents chose to react.

A mousetrap in hand versus in the bush?

What’s the value of a mousetrap (or two) in the bush? Hitting the road to spread his message of energy independence, Bush announced that the US was on the verge of an energy breakthrough (story):

“Our nation is on the threshold of new energy technology that I think will startle the American people,” Bush said. “We’re on the edge of some amazing breakthroughs — breakthroughs all aimed at enhancing our national security and our economic security and the quality of life of the folks who live here in the United States.”

I’ve spoken about the fallacy of better mousetraps before (mousetraps), but to recap–the numbers just don’t pan out. Of the 4400 mousetraps patented in the last 170 years or so, only a few dozen have made any money, and only 2 dominant designs are on the market (the snap trap and sticky trap). The world does not, it turns out, beat a path to anyone’s door for a better mousetrap. Nor will it for a better energy technology: solar, nuclear, hydro, geo, biomass…these were and are all good technologies. But that’s not enough.

Technological revolutions don’t happen overnight. to take hold, they require relatively slow and incremental changes in the behavior of individuals and markets. Edison’s light bulb (arriving as it did 40 years after the first incandencent bulb) still preceded the true age of electricity (in the homes and factories) by another 40 years.

So here’s the dilemma: the more we talk about a great technology just around the corner, the less we take responsibility for the harder work of changing our behaviors to exploit the alternative energy technologies that are out there today. The danger of believing in an energy mousetrap–that a technology will suddenly rescue us from our addiction–is that such a belief only enables our complacency. Don’t worry, be happy, and a solution will be along shortly.

The politics of technology

Building a better mousetrap seems to have more in common with Britain’s finest hour than with the glamour of innovation. For example, developing the technology to blanket cities with free wi-fi is, to paraphrase Churchill, “…not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

Glenn Fleishman, writing in the NYT Advocates of Wi-Fi in Cities Learn Art of Politics, describes the necessary disillusionment of early “free wi-fi” pioneers and their subsequent embrace of politics in order to implement their plans: “All of us were very idealistic, and all quite strongly opinionated,” says one such pioneer.

“The problems that were hard in 2001 were technical ones,” Mr. Spiegel [president of NYCwireless, a volunteer wireless advocacy group in Manhattan] said. “Now, they’re personal and relationship and political ones. The technology, we almost don’t even think about it anymore.”

Sound familiar? Anyone who has tried to push innovation in organizations recognizes that getting the technology right is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning. Politics comes next. Perhaps we need a Churchillian theory of innovation?

The Corporate Citizen

In explaining why he grilled Sec’y of State Condoleeza Rice in Davos, Dr. Daniel Vasella, chief executive of Novartis, the Swiss pharmaceutical giant, offers these words of wisdom–and perhaps warning–to CEO’s who feel they can and should abdicate their own beliefs and values to further the corporate mission:

The first responsibility of a C.E.O. is to run his company successfully and generate products which are useful to your customers, resulting in economic value creation. We also have to act responsibly, respecting not only the law, but also fulfilling legitimate expectations that society has of us. Today these expectations in most instances go beyond short-term profit maximization. What people want is that businesspeople behave in a responsible way in communities in which they live, that they treat employees fairly, respect the environment and demonstrate sensitivity to the problems of other, disadvantaged people in the world. I think corporate social responsibility has taken a much more important role than it used to.

And later:

…some of my fellow C.E.O.’s believe they should not express themselves on political issues at all. They should just do business. I think that is not the right attitude. First of all, we are citizens of whatever country we are from. We have a citizenship responsibility. Secondly, I do believe we have to examine our own beliefs and value systems regularly. We cannot act in a void. I think there is very clear responsibility.

As global power migrates from nation-states to corporations, the behaviors and expectations of these corporate citizens will become increasingly central to peace and prosperity.

Discovering, and staying, discovered

Another interesting article in NYT, about the redundant nature of science, Pity the Scientist Who Discovers the Discovered. The article describes how so much of science consists of discovering what’s already been discovered by someone before–and highlights two challenges in the innovation process: distinguishing new from old and making a difference.

The discovery that your discovery has already been discovered is surprisingly common, said Stephen Stigler, a statistician at the University of Chicago who has written about the phenomenon. Not only does it occur in every scientific field, he said, the “very fact of multiple discoveries has been discovered many times.”

One of the more powerful examples, of course, is penicillin (An Unfortunate Notion), which was discovered, in various ways, long before Fleming. And, of course, the ultimate disdain in academia is calling someone’s work “old wine in new bottles,” which presumes your generation was the original winemaker.

Even Einstein’s work combined current understandings of what were existing but previously unconnected ideas and phenomena, building on the ideas of Boltzmann, Hertz, Poincare, Mach, Planck, and others. Such old wine is not so muc relabeled as remixed, combining in a way that enabled Einstein to take what was best and leave behind the vestiges of older scientific practices. Those closest to Einstein’s discovery, the very individuals whose work Einstein recombined, Mach, Max Planck, Lorentz, Poincare, themselves never wholly embraced his work. Max Planck referred to Einstein’s theories as merely a generalization of Lorentz’ work.

All work is derivative, but also breaks new ground. The first challenge is to know the difference. As Einstein once said of Mach, whose work he admitted to closely building on, “It is not improbable that Mach would have discovered the theory of relativity, if, at the time when his mind was still young and susceptible, the problem of constancy of the speed of light had been discussed among physicists.”

The second challenge is getting anyone, and then everyone, to know the difference:

Larry Shepp, a famous mathematician at Rutgers University…when told that a piece of work he thought was his discovery actually duplicated another mathematician’s breakthrough, replied: “Yes, but when I discovered it, it stayed discovered.”

World wide web of good

Posting for Always On, Scott Lenet, Co-founder and Managing Director of venture capital firm DFJ Frontier offers a compelling case study of corporate citizenship. As William McDonough argues, “Commerce is the engine of change.” One of DFJ Frontier’s funded ventures,World of Good, is attempting, and so far succeeding, to change the ways that first world consumption affects third world production (and social) systems.

When consumers can get information easily that allows them to compare alternatives, prices reach equilibrium and unfair advantage tends to disappear.

But imagine this model turned upside down, where the power of the internet could be used to help uninformed suppliers in a market where buyers have all the control. Craft producing villages around the world have little access to market information on the selling price of their goods as they move through the global supply chain. These producers rarely have the ability to assess the value of their labor and are unable to negotiate prices to ensure that they live above the poverty line.

This is why World of Good founder Priya Haji has introduced web-based floor pricing technology for worldwide distribution to craft producers. Literally anywhere in the world, a producer, their representative, or a buyer can test pricing in real time. This calculator shows how the price of goods compares to United Nations indicators of poverty and international labor wage data. Immediately, artisans can use this information to negotiate market prices while buyers with conscience can see how their pricing policies compare to their intentions. Using the internet, World of Good embodies a key requirement for free markets: the free flow of information.