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Sustainable growth, not disruption

An edited version of this piece appears in The Irish Times , 1 August 2014 (online here)

In defining the criteria by which the judges of The Startup Academy will adjudicate which companies would be accepted into the programme we have done something radical. Normally a competitive process like this might select only the startups that are most likely to grow to a vast scale. In our case, however, the primary objective is not what startup incubators call “scalability”. Instead the Startup Academy’s criteria require judges to select startups that are most likely to grow sustainably.

Moving beyond disruption

In 1942 Joseph Schumpeter, an economist, described “creative destruction”, a process whereby new businesses entering a market “incessantly destroy” incumbent companies. These new entrants will themselves fall prey to later entrants who introduce new products or services that disrupt the incumbents’ businesses.

This view of disruption has been the mantra chanted in the technology sector with growing confidence from the late 1990s on, when a Harvard business theorist, Clayton Christensen, published the landmark disruption book “The Innovators Dilemma”. In Silicon Valley at least, disruption has since become dogma. Christensen’s place in the tech firmament is now so central that an attach on his research in a recent piece in The New Yorker caused a furore. None other than Marc Andreessen, the co-founder of Netscape and one of the most prominent investors in Silicon Valley, took to twitter in his defence.

The theory of disruption is one of the few things that is immune to disruption. In a more recent piece in The New Yorker Nathan Heller wrote about Francisco’s gentrification as wealthy tech employees drive up property prices and displace residents. The benefits of the startup boom are only for some, as the protestors on San Fransisco’s streets complain. The Christensen spat and the culture war currently raging in San Francisco are linked. There is something not quite right with the tech startup culture. Something that needs fixing.

We look upon disruption as a foreign concept imported from centres of innovation in the US, but there is something inherently disruptive in the Irish psyche. It surrounds us. Our cities are a mess of oddly planned clutter. Our rural landscape is a patchwork of irregular hedges. It is not possible to move in Dublin without braving the hazard of pavement hopping cyclists, swerving cars, and jaywalking pedestrians. This kind of disruption is what the Irish person lives with each day, and it supports a free-wheeling attitude to new ideas.

But there is a darker side to disruption. Entrepreneurs raised on stories of Instagram’s multi Billion dollar sale assume that to disrupt something is necessarily to the good because that which has been disrupted will be replaced by something better and more efficient. This is not always the case.

Disruption is the logic of Darwin applied to business. Natural selection, however, was intended to act for population growth rather than revenue accumulation. The winner takes all logic of disruption can be harmful.

Disrupting an inefficient industry may, for example, carry the very nasty side effect of dumping people with no hope of employment in the new dispensation on to the live register. Even so, one could argue that Schumpeterian “creative disruption” works when the benefit of what is new outweighs what has been destroyed. Yet there are certainly conditions when this test is not met.

And herein lies the question. Should we predominantly support the great disruptors, or should we support companies embarking on more modest – but sustainable – growth?

Go Lean, grow sustainably

If one could design a startup culture from scratch one might very well opt for many small, constant returns rather than few mega wins. It would drive continuous improvement that serves us all better.

For a very small business even modest growth is enough. One tailor told Stephen Brennan, the Chief Digital Advisor at the Government’s Department of Communications, that the difference between his store surviving and closing was the sale of one additional suit per month. Brennan has since bent many of his efforts toward schemes that help small businesses develop an online presence, such as the Trading Online Voucher Scheme announced earlier this year.

Opting for sustainable growth does not mean abandoning innovation. “Lean thinking” is a central tenet of startup thinking in the technology sector, and it applies as much to sustainable growth as to disruptive growth.

“Lean” describes a focus on properly understanding what a customer needs before building a product, and then constantly iterating that product to ever more perfectly meet the customer’s need. Lean was at the heart of the Toyota Production system that elevated Japanese manufacturers above American competitors in the 1980s and 90s. This iterative approach is applicable to every industry.

The better startup culture

A startup culture that embraces all sectors can also embrace more than Schumpeterian disruption. Designing a better culture for startups means minimising the hurt of disruption and maximising the spread of iterative improvement by design.

Ireland’s startup culture needs a change of mind set from winning big to winning sustainably. And as a first step The Startup Academy is looking for companies that can employ rather than creatively destroy.

Students at The Innovation Academy tackle the marshmallow challenge

Design Thinking, and thinking like a child, for product design

This is a slightly shortened piece I wrote for The Irish Times on Design Thinking in organisations. Full article is here http://www.irishtimes.com/business/bring-design-thinking-to-your-product-1.1822064

Bring design thinking to your product Thinking like a child could save your business cash

US technology investor Dave McClure coined a maxim that sums this challenge up: “Your solution is not my problem.” He had sat through many a pitch from start-ups seeking his investment before distilling this nugget. And the idea, once grasped, is obvious: entrepreneurs often produce products that do not solve the kind of problems customers actually have. An entrepreneur pitching for investment is keen to talk up their solution, but what counts, says McClure, is that there is a genuine problem to be solved in the first place.

Stages

Designing products that solve real problems is difficult. A process called “design thinking” can help a business to shape its product to meet customer needs.

The process has five stages, and begins with the “empathy” stage during which the business goes out to research the problem among the people affected by it. Using the insights discovered by talking to people, the team can progress to the “definition” stage where it defines the problem based on real needs of potential customers rather than the entrepreneurs’ Continue reading

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Lean Startup Strategy. Not just for startups.

I spoke to Steve Blank, Alex Osterwalder, and the man who coined “Lean”, John Krafcik. Here is what they said. This article appeared in The Irish Times 2 May 2014 see link.


 “U should apply Lean Start-up Strategy in everything u do. Even ur personal & love relationship. Think about it & makes sense.”

Thus tweeted an excitable San Francisco tech entrepreneur (whose Twitter profile notes that she is one of Business Insider’s 27 “most impressive Harvard MBAs”).

A sizeable proportion of the hype surrounding “lean” is overwrought, but a sound kernel of logic lies at the heart of the “lean start-up” craze sweeping entrepreneurial circles. The lean method of building start-up companies and products emphasises customer research and tactical tweaking over execution of strategic business plans.

Stanford professor Steve Blank, the father of lean start-up strategy, says the big idea of lean strategy is “stupidly simple”.

“The first thing an entrepreneur should do is get outside the building and start Continue reading

Press: “Innovation Academy UCD appoints Dr. Johnny Ryan as Executive Director”

Dublin, 8 April 2014:  The Innovation Academy, UCD, today announced that it has appointed Dr Johnny Ryan as Executive Director.  In his new role Dr. Ryan will take responsibility for the execution of the strategic mission and expansion of the Academy, and management of core operations including staff, programmes, and commercial operations. Dr. Ryan joins the Innovation Academy UCD from The Irish Times, where he held the position of Chief Innovation Officer.

Professor Suzi Jarvis, founder and Academic Director of the UCD Innovation Academy said , “The purpose of the UCD Innovation Academy is to provide a transformational educational experience for the betterment of Irish society and economy. Johnny has an excellent international reputation for innovation and flexible strategic decision-making.  We are delighted that he is joining the Academy at this critical time as we rapidly expand our entrepreneurial activities both here and abroad.”

Since joining The Irish Times in late 2011, Dr Ryan established a multi-million euro Big Data R&D program intended to give The Irish Times’ newsroom a competitive edge in delivering insight to the reader. This programme sees the newspaper work with the Insight Centre for Data Analytics, UCD, NUIG, Science Foundation Ireland, and Enterprise Ireland to push the boundaries of data science.  He also introduced tech startups inside the 156 year old newspaper to develop new digital experiments. These initiatives have since been duplicated by other media leaders around the globe.

The Editor of The Irish Times Kevin O’Sullivan paid tribute to Johnny Ryan, noting he “has had a transformative effect in changing and broadening digital thinking across our entire organisation”, and wished him well in his new role.

Dr Ryan said “In the two and a half years with The Irish Times I have had the privilege to work on, as well as lead projects that introduced radical change. I now have the opportunity to bring the incredible dynamism of the Innovation Academy to help businesses to tackle the changes needed to further provide the Irish economy with a competitive edge in the global market.”

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Notes for the Editor 

About Innovation Academy, UCD

The UCD Innovation Academy was established in 2010 to transform education on campus, and to play a leading role in the wider innovation ecosystem. Since its opening over 600 students from every discipline have participated in the Academy to develop their creativity and to apply innovative approaches to tackle real world problems. The Academy is currently working with many leading multinationals, SMEs, charities and Government agencies and recently commenced a major partnership with the GAA to ignite community entrepreneurship across the entire nation.

About Dr. Johnny Ryan

Dr Ryan’s second book “A History of the Internet and the Digital Future” is on the reading list at Harvard, Stanford, and other top tier institutions. As a thought leader on innovation his writing has appeared in Fortune, BusinessWeek, Contagious, NATO Review, ArsTechnica, and The Irish Times.

His PhD at the University of Cambridge, where he was an O’Reilly Foundation Scholar at Magdalene College, examined how terrorist memes proliferate online.

His previous research, as a Senior Researcher at the Institute of International & European Affairs, was the most cited source in the European Commission’s official impact assessment that decided against pursuing an EU-wide system of Internet censorship. He is an associate on the emerging digital environment at the Judge Business School of the University of Cambridge.

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Big Data R&D for the newsroom

US newspaper circulation To grasp the scale of the challenge that faces the newspaper industry take a look at this chart. As the red line shows, daily circulation figures in the United States have declined to levels not seen since World War 2. For an even grimmer narrative visit Paper Cuts where Erica Smith chronicles layoffs at newspapers as they occur. However, the future for the newspaper will be brighter than these things might appear to suggest.

There are two reasons to be optimistic. First, the emerging information environment suits the high-end newspaper, although that might be difficult to believe today. Second, big data in the newsroom can help deliver precisely what the reader needs. At The Irish Times we are working to develop big data capabilities in our newsroom that do exactly this.

The information environment: White Noise 

Three in every five of our users believe that they receive too much information every day in the form of news, e-mails, newsfeeds, and social media updates, according to a survey I recently ran. (Sample: just under 1,800 respondents from among users of Rewarding Times, The Irish Times’ upmarket group discount service, 94% of whom are regular Irish Times readers online or in print).

Irish Times readers tend to be adept information consumers, well-educated and well-read. So when a large proportion of them say they are receiving too much information that suggests the problem affects everyone. The crux is that information, which was once scarce, expensive, and manageable, is now the opposite: plentiful, cheap, and overwhelming. This change was apparent before I joined The Irish Times, and it has become increasingly visible since. Reuters Oxford Institute’s Digital News Report 2013 reports that as people “acquire more devices they also consume more news … but also access news more often throughout the day”. And the result is a white noise effect.

The idea of ‘information overload’  gained currency among researchers from the 1960s onward. An  example worth reading is Streufert, Suedfeld, and Driver’s studyConceptual structure, information search, and information utilizationpublished in 1965. It tracks the decisionmaking ability of 185 students as they receive increasing quantities of information, and proved that humans continue to crave information even when they have more of it than they can handle.

There is an analogy with food, put simply in Clay A. Johnson’s Information diet (2011). As dietary calories became cheap and plentiful in the West people were forced to be selective in their diet in order to maintain their health. Information, like energy in food form, is something that humans have an insatiable appetite for.

Ryan's loose theory of too much information

As the ratio between quantity of available information and our capacity to absorb it changes, we must be more selective.

The newsroom: Big Data R&D 

Although information of varying quality and provenance has become cheap, trustworthy insight is increasingly precious. The white noise creates an acute need for thoughtful analysis and verification. And the market reflects this. Publications that provide this, such as The EconomistThe New York TimesThe Financial Times, and so on, are prospering.

The lesson is that the value of insight has survived the disruption, and the reputation for trustworthiness that reputable newsrooms can attach to that insight is more valuable than ever. This is good news for The Irish Times. It is governed by a trust whose articles mandate that it exists ‘to enable readers of The Irish Times to reach informed and independent judgements and to contribute more effectively to the life of the community’. In other words, its sole reason for operating is to turn people into thinking citizens rather than to make a profit. (Profits generated through things like Rewarding Times are reinvested back into the newspaper’s mission).

Earlier this year at the annual conference of the World Association of Newspapers and News Publishers in Bangkok we told our colleagues around the world that we had begun to develop a multi-million, multi-annual, big data R&D programme focussed on radical innovation in the newsroom. Over the coming months I will post updates on this blog. You can also see video diaries of our innovation initiatives with startups (Irish Times Digital Challenge and Irish Times FUSION) at irishtimesidealab.com.

We have been working with Enterprise Ireland, Science Foundation Ireland, and with the leading computer science research centres in the country to build up a world class consortium for big data R&D. And crucially, where many organisations have made customer data the primary focus of their big data work, our focus at the outset is to find and deliver the critical insights that separate a story worth reading from just another distracting tid bit.

The Irish Times is re-discovering the spirit of invention that made it one of the first half dozen newspapers in the world to launch an online edition in 1994. We are pioneering new ways to deliver insight and cuts through the white noise. If you would like to help please get in touch.

New project: Prevent national health crises by mining public discussion and news to predict vaccination uptake

Prevent national health crises by mining public discussion and news to predict vaccination uptake

This is the proposal that I submitted yesterday to the Knight Foundation health data challenge. See the proposal, and vote on it if you like it, at the Knight News Challenge.

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Vaccines matter. We want to predict uptake by mining news and social sources. Our initial pilot in Ireland will focus on the uptake of the HPV vaccine, a critical public health issue for women in Ireland.  Continue reading

A look back at ReformCard: the political reform score card

ReformCard was really the brain child of Joseph Curtin, my colleague at the IIEA. I co-founded it with him. The idea was to measure the truly structural rather than partisan/point scoring reform commitments that each political party made in its manifesto for the 2011 election. With the calamity of the economic collapse fresh in the mid, and public ire about the “cosy consensus” between public and private decision makers that allowed it to happen, there was a sense on the ground that this election would prompt a sweeping reform agenda. We wanted to monitor that, and make sure that parties would be judged on their commitment to structural reform, measured in political science terms, rather than superficial measures. We set out the idea in The Irish Times’ election podcast: click to listen.

Here is some of the blurb that once was live at ReformCard.com (I post it here because the site is no longer live).

Continue reading