Extrapolating the past Vs Inventing the future.

 

Vinod Khosla –a co-founder of Sun Microsystems and its first Chairman is a highly respected Silicon Valley investor as the general partner of Kleiner Perkins. Over the last few years, he has moved away from technology to Energy and Greentech.

Yesterday he delivered an interesting talk at Caltech on Extrapolating the past Vs Inventing the future. The talk was peppered with some brilliant statements, some philosophical musings and scenarios for the future. I found the talk scintillating The entire talk can be viewed here. (The audio quality at the beginning of the session is poor quality, but when Vinod begins his talk, the audio quality is excellent)

Here are some of the excerpts:

Extrapolating the past is ridden with mistakes starting from forecasts:

On why forecasts go wrong (he talks about a number of forecasts that’s gone completely haywire:

Assumptions get embedded in our system. We don’t question our assumptions. Forecasting is about our embedded assumptions not explicitly stated.

On quantitative modeling:

Chasing the false precision, chasing the 3rd order effects

Input the measurable, ignore the immeasurable

Obscured embedded assumptions.

He concludes the section after giving several instances by saying that “The more rapid the change, the less likely are the assumptions to be right”.

On why inventing the future is absolutely critical:

He starts by explaining the Black Swan effect giving several examples and declares that much of what we assume to be true is retrospective predictability. Some great statements that he makes:

Improbable doesn’t equal unimportant and the only thing that’s important is the improbable.

No matter where you look, there’s room for innovation, however unlikely it looks

Bring me the ideas that has a 90% chance of failure!

If you take enough shots at the goal, failure doesn’t matter; it doesn’t exist.

“Imagine the possible”.

His final words in response to a question from the audience sums it all: “The talk is just to give a perspective; but most importantly is to convey an attitude”.

Well said, Sir !

Ray Ozzie’s new memo to Microsoft

 

Ray Ozzie is a legend. Bill Gates rated him as one of the five best programmers in the world. Ray created Lotus Notes – the popular email and collaborative workspace solutions in the world. Ray succeeded Bill Gates as the Chief Software Architect when Bill decided to leave Microsoft. He is truly a visionary and I had found his earlier memo The Internet services disruption very interesting

Now as Ray prepares to leave Microsoft, he has penned a farewell memo titled Dawn of a new Day. It makes interested reading as he explains several new shifts about where the “post PC world” is headed.

When I read both the memos I get a feeling that despite the 5 years that he spent there and his exhortation for changing, he hasn’t been effective enough. After his routine praise of Microsoft, he makes a subtle but pointed criticism of Microsoft’s business model when he says:

Yet, for all our great progress, some of the opportunities I laid out in my memo five years ago remain elusive and are yet to be realized.

Certain of our competitors’ products and their rapid advancement & refinement of new usage scenarios have been quite noteworthy. Our early and clear vision notwithstanding, their execution has surpassed our own in mobile experiences, in the seamless fusion of hardware & software & services, and in social networking & myriad new forms of internet-centric social interaction.

There is also a veiled pointer to Microsoft’s seemingly glaring weakness of not being able to conceive the future when he says:

In our industry, if you can imagine something, you can build it.  We at Microsoft know from our common past – even the past five years – that if we know what needs to be done, and if we act decisively, any challenge can be transformed into a significant opportunity.  And so, the first step for each of us is to imagine fearlessly; to dream.

The one irrefutable truth is that in any large organization, any transformation that is to ‘stick’ must emerge from within.  Those on the outside can strongly influence, particularly with their wallets.  Those above are responsible for developing and articulating a compelling vision, eliminating obstacles, prioritizing resources, and generally setting the stage with a principled approach.

But the power and responsibility to truly effect transformation exists in no small part at the edge.  Within those who, led or inspired, feel personally and collectively motivated to make; to act; to do.

In taking the time to read this, most likely it’s you.

At times, it almost seems that he is endorsing Google’s strategy and technology approach.

Facebook overtakes Google in eyeballs. What next?

 

Ever since I made the rather controversial statement in Feb 2010 in a public forum in Singapore that Facebook will overtake Google from a traffic point of view before 2011, I have had some interesting conversation with a variety of people. I guess I misjudged. As of Sept 2010, Facebook had overtaken Google in terms of eyeballs.

Not surprisingly, it also has the largest page views and leads the 2nd contender by a huge measure. Will the people and eyeballs create a business model that can be potentially be bigger than Google which has current annual revenues of U.S.$27 billion? That’s the big question!

I have also said that while they may compete for advertising dollars, Facebook’s model lends itself to both advertising,   entertainment and commerce as it becomes the Internet.

Facebook has indeed the potential to dominate everything that we do on the Internet and I just list 2 main revenue opportunities here:

The advertising revenue model:

Facebook’s advertising revenues (its only revenue stream) was projected to end up at $1.5 billion in 2010 which is an incredible increase from $635 million. My reckoning is that it may even cross the $2 billion mark in 2010 itself.

The biggest advertisers have boosted spending by at least tenfold in the past year as Facebook crossed the 500 million users mark.  "Two years ago the big brands were experimenting with us, they started buying with us a year ago. Now, they’re going big." said Facebook’s COO Sheryl Sandberg in a recent interview.

If this be true, then Facebook has an accelerated growth trajectory ahead than what Google had during their initial years. As far as advertising is concerned, Facebook provides the demographic characteristics and interests, an increased social engagement through social graph and these are the buying criteria which marketers have traditionally been used to. So Facebook becomes the platform of choice foe marketers to reach a broad online audience. On the contrary Google’s target is based on the search intent and while Google is making search better by predictive technology, it could still lag behind the Facebook model.

My reckoning is that Facebook’s advertising revenue model may come more at the expense of TV advertising than the text advertising. Facebook can always create an equivalent of Google’s Adsense and AdWords model and draw some revenues from Google. I expect this may be a $10-12 billion business in 5 years.

The entertainment revenue stream:

With the success of Zynga and several other gaming companies like EA choosing Facebook as the platform, it is only a matter of time before every other gaming and virtual goods service embrace Facebook. Facebook earns a cool 30% out of all revenues the gaming revenues and revenues from virtual goods. Based on current run rate, this could be another $5-7 billion in 5 years.

There are several other revenue streams coming out of commerce. An alliance with Amazon, an acquisition of PayPal and this can become the harbinger for all revenue streams coming from commerce.

So, when will Facebook overtake Google in terms of revenues? Your guess is as good as mine! But wait, I am still mentally occupied with the question and will come to some conclusions early next year.

If Google’s search speed is not fast enough, try Instant!

 

What does a company that powers 70% of the search market, has over $20 billion in sales relating to search believe the speed of search should be?

Google estimates that a search typically takes the following:

• 9 seconds to enter
• 0.8 seconds for data transfers between the data centers
• 0.3 seconds for processing.
• The users then spend 15 seconds choosing the link that the search results show up.

If anyone believes that this is a slow performance, Google Instant comes your way. It saves the average user 2-5 seconds per search via instant results, enhanced predictive technology and scroll-to-search functionality.

Google Instant will search at the speed of thought. Or at the speed of serendipity.

If every Google user used Instant, it would save 3.5 billion seconds a day. In other words that is 11 hours saved every second.

Now of all the great engineering prowess that Google deploys to make Google Instant, it is the predictive technology aspect that’s intriguing, deeply unsettling and maybe a big game changer. The search attempts to predict exactly what a user wants, showing the results that it thinks he wants in grey text, allowing him to choose. So, even if a user doesn’t know exactly what he’s looking for, the top prediction is shown in grey text in the search box and the user can stop typing as soon as he sees what he needs.

So, a search is a real time stream enabling the user to see more search results.

It essentially could mean that different people would see different search results for the same query. This could be just the beginning. The search results could again vary depending on the device from where the search is initiated or even by location.

This  means the world of search is just not getting faster, but incredibly complex.

Well, all the marketers and SEO gurus have to change. Sites will need to be optimized for letter combinations, not just complete keywords. This also implies that advertisers will have to purchase more keywords in order to optimize performance. More importantly, Google will gain another revenue stream through ad impressions as currently advertisers are not paying for impressions.

I reckon the compelling reason for this development is that Google’s mobile search traffic grew over 50% in first half of 2010 and 1 in 3 queries from smartphones are seeking information about nearby places. Now mobile users would just like to enter a few characters and choose the query from an autosuggestion list. Right now it is difficult to figure out what this engineering feat of Google Instant will mean in terms of revenues.

And I am not sure whether fast is better than good.

Jugaad – National character, national shame.

 

Following my post on Juggling Jugaad is a dirty joke on India, I received about 12 comments on the blog and 45 emails. One of my friend Ajith Narayanan sent a response and requested that it be carried as a guest post. Ajith is from IIT Chennai and has one of the best engineering brains that I have come across.

——————————————————————————————————————–

Jugaad is at work when there is single minded focus on the end goal, disregarding everything else that doesn’t contribute. Jugaad is lean and mean efficiency. So far, so good.

But the essential principle of Jugaad is about taking a short cut, cutting corners, not delivering in full measure, and getting away with it.

Jugaad then, is also about disregarding the impact of your actions on others, on the environment, on the common good, on established principles and structures of society, norms and standards and so forth.
Of course, the Jugaadist reaps a reward. Others begin to envy and emulate the Jugaadist.  Eventually Jugaadist thought and action takes root in every sphere.

Small innovations are to be lauded, and Jugaadism may have a role to play in early stage innovation. But, beyond that, Jugaadism is a mental disease, hard to overcome  when a critical percentage of the population has pledged their allegiance to Jugaadism.

When we rely on Jugaad, there is little need or use for principles, standards, guidelines, or best practices whether these be related to engineering, design, human factors, processes, safety, reliability and such, or to natural and procedural justice, fairness, ethics or dignity of the individual.

Jugaad defines our national character.

When our Election Commission ordered the arrest of the EVM researcher who demonstrated that  Electronic Voting machines can be tampered, (http://www.freedom-to-tinker.com/blog/jhalderm/electronic-voting-researcher-arrested-over-anonymous-source  ) wasn’t it taking a short cut ?  The EC found that crying "thief! thief!" and calling in the police was much easier, and rightly Jugaadist, than joining in the debate — on how secure an EVM Indian citizens deserved, and whether the EVM or operational procedures could be improved.  Jugaadism is expedient and has no slack for such diversions. Here you see the EC’s Jugaadism working against innovation. But then, Hari Prasad (the EVM researcher) procured an EVM by "other means" for his research, despite being denied access by the EC, and he did it through Jugaad ! One man’s Jugaad, another’s crime.

When established H1B-dependent body shops (that pay little taxes if at all), faced with visa quotas and resulting curbs on their lucrative slave trade, call protectionists racist ("discriminatory" — which is quite close. Protectionists are protectionists!), and hijack a whole country’s government to fight on its side, it is Jugaadism at work — in a supposedly mature industry.

But when such entities, big and mighty, rely on Jugaadism, something is wrong. Can they be truthful and just ? Can they innovate, in real terms ? Do they have social consciousness ?

Jugaadism also means no rule of law as Anand Giridharadas comes close to observing. The Jugaadist feels no need for any norms.

In my view, Jugaad is functional at primitive stages of development. To celebrate India’s Jugaadism as national character is a shame — but, perhaps we deserve that shame.

Fear is to be welcomed because it seeds courage

 

“Fear becomes not just an acceptable but even welcome emotion because it paves the way for courage and heroism. It is fine to be frightened, but not to run away from it.” says Vinita Dawra Nangia – one of the most respected columnist of The Times of India.

I did blog about reframing the fear of failure for success and to Vinita’s credit she makes the point well. She has expanded the thinking from the fear of failure to fear in general to all the so called negative emotions. Her column – The emotional trap is a good read.

She goes further and destroys the myth of negative and positive emotions completely in a very compelling and persuasive style.  Selected extracts from the article:

Fear is as important as courage; sadness as important as happiness; to cry is as critical as it is to laugh, to grieve every bit as needed as to celebrate. If positive emotions help give us confidence and cheer, negative emotions too serve a purpose.

The important thing is to feel. And, to feel with intensity. In the movie, Beyond Borders, based amidst the suffering in Ethiopia, Clive Owen talks to Angelina Jolie about pain, "In the city, we drown it, numb it, kill it — anything not to feel. Here (Ethiopia) they feel….. We have no idea what courage is. It’s the weirdest, purest thing — suffering."

And from that intensity comes mental, emotional and spiritual growth.

I like the way that she puts fear and other so called negative emotions in perspective. She puts it succinctly when she says:

It is critical to be in charge of your emotions, not allow them to control you!

And of course the best thing about emotions is that they don’t stay with you long. Try as you might, you can neither catch happiness by its forelock, nor pain by its tail. They visit us and in time, after having served a purpose, they leave…

I am reminded of the clear definition of courage: Courage is not absence of fear. It is the ability to function despite fear.

The best way to lead life is (as the Bhagawad Geetha says) by having a sense of equanimity or through inculcating the “samathva”. Easier said than one, but every small step in the way is progress.

Juggling Jugaad is a dirty joke on India

 

There is enough scope to create new management paradigms based on the Indian ethos. Sadly, the one that seems to be gaining popularity is “Jugaad”. From what was once a verb which was used, albeit apologetically, it is now getting gaining respect. It has even become the talk of celebrated journalists like  Anand Giridhardas and Swaminathan Aiyar. Both extol their values here and here.

Even McKinsey, which seems to have run out of management fads recently, is keen to give its own spin on Jugaad. Like many desi usages which has pushed its way into the English lexicon, this one will also get included. The institutionalization process will be complete.

I felt outraged when a respected academic in a business school suggested that we should teach Jugaad in business schools and even export it as a business model from India, fully aware of its sinister side.

The Hindi word “Jugaad” was originally meant to be innovative under severe resource constraints. It was to find a workable and a temporary solution for an unforeseen problem. The Jugaad approach defied conventional logic: it needed creativity, imagination, use of available cheap materials and more importantly the gumption to try something new. A permanent solution was never the objective or the expectation though it gives the impression that the problem has been “fixed”.

Over a period, it stood for grassroots innovation done on a shoestring budget. Low cost products like a $50 water filter, or a $800 ECG machine was touted as products coming from a Jugaad mindset though the quality, reliability and efficiency of such products remain questionable.

Suddenly the Jugaad phenomenon gained credibility and got the attention of intellectuals with the $2,500 Tata Nano,  and the $10 OLPC (One laptop per child) as examples. Tata Nano is yet to prove itself. All that came out of India’s OLPC  was just sound bites as can be seen from the links here. Yes, used tires can be recycled as shoe soles, but I have yet to see recycling done on any scale. So much for Jugaad that signifies frugal innovation!

What makes it worse is that Jugaad masks a more insidious thinking that is corrupting the core fabric of Indian ethos. Jugaad deploys any means – legal or illegal – more of the latter to get a job done. Accountants use Jugaad for creative accounting, Ramalinga Raju uses Jugaad to siphon money from Satyam (“Truth”) and the list goes on.

Even school kids are encouraged to do benign Jugaad by asking them to revise 10 year question series (instead of reading their study materials) to pass exams. Here is the ultimate Jugaad: judges caught cheating in their LLM exams. This temporary success has institutionalized shortcuts, short-term thinking, shoddiness, a grey market, patchwork all leading to mediocrity and corruption.

Sadly, a generation has grown up without understanding the meaning of excellence and what it takes to pursue it, having been fed on the Jugaad pill since childhood. And India depends on this generation to become a superpower!

Jugaad derives its immense energy from its elder brother – a “Chalta Hai” attitude. What at one point of time was meant to signify meek acceptance and a tolerance of an aberration has now become the de-facto response to everything – corruption, poor governance, miscarriage of justice, unfair social systems, criminalization of politics, even acts of terror and mindless violence – and you can keep counting.

While Chalta hai has assumed a tone of abject resignation and even cynicism, Jugaad has become more sinister and monstrous. Jugaad’s execution models revolve around manipulation, deceit, corruption, criminal intent all going into sub-standard workarounds and cover-ups for selfish short term interests.

The Commonwealth Games scheduled in Delhi is a classic example of the entire Jugaad lifecycle at work. Far from showcasing India to the world, first the Sports Minister (M.S. Gill) and now the Chief Minister of Delhi (Sheila Dixit) are exhorting the country to pray for the success of the Games. This can be “Incredible India” but by no stretch is “India Shining”.

I for one would like it to fail as this is the only way that the collective Indian consciousness  can wake up from its deep slumber. The fact that Rs28,000 crores have been spent instead of the original Rs655 crores in what amounts to be a criminal drain of public funds is another matter. Azim Premji raises this pertinent issue and several other valid points here.

If the benign avatar of frugal innovation has failed to deliver, Jugaad’s sinister variation is to India’s detriment. It has completely corroded traditional Indian values. Sadly, the vast majority are happily celebrating it in the drunken stupor of a temporary surge in economic growth, completely oblivious to the fact that no organization or country can buy its way to superior status with a Jugaad strategy. The fact that some are acquiescing – and worse giving it a glossy coat of respectability – is tragic, to say the least.

It just takes a few good men to say the truth. Will India find these good men before it is too late?

Reframing fear of failure for success

 

Most people get paralyzed by fear. It seems to be an automated response, partly burdened by the expectations of success or the stakes involved. This doesn’t have to be necessarily the case.

A simple mental calibration of our perspective should be adequate to leverage this negative emotion to be successful. Adam Khoo explains the mental calibration effectively in his blog post here. Key elements involved in the mental calibration include:

Many people define failure as NOT achieving their goals. Successful people see failure differently. They think they only fail when they give up. As long as they don’t quit and keep learning and moving forward, they have not failed yet!

Successful people also believe that the greatest failure in life is the failure to participate in life. Not even ‘trying’ is the greatest failure of all.

There is nothing wrong with having fear. Fear is an emotional response given to us by our creator for a specific purpose. When you learn to use it, fear heightens your senses, increases your focus and drives you to become even better prepared.

Speaking for myself, the fear of failure in fact energizes me. Though I am  well prepared for most events, there’s always the gnawing fear that something can go wrong and I can fail. For instance, I dread the ten steps that I need to take to go up  the podium to deliver a talk. But as soon as I am close to the stage and get ready to start, I can actually feel a positive energy revitalizing me. Some say it is the adrenalin effect. I can’t confirm that. Most times, I deliver a talk that surpasses expectations and I feel a sense of fulfillment.

In the rare case, when I never felt the dread, I missed giving a great performance.

I have also been told that psyching oneself up and having positive thinking is a great antidote for the fear of failure. I do not think so. An induced positive thinking is synthetic. It only accentuates the obsessive attachment to the desired result and increases the intensity of failure. It doesn’t neutralize the fear of failure; merely suppresses it. Delusional optimism is as harmful as having the pathological fear of failure. I wrote about the negative aspects of positive thinking here.

The thing that works effectively and is healthy: Feel the fear and do it anyway. Do it after you have adequately prepared for it.

Another evidence that social phenomenon is growing!

 

I have been saying everywhere that social is driving business and sharing is the new currency. The evidence is daunting and the photo medium is compelling.

Facebook reports that Facebook photos became the harbinger for everything social. The photo product that we have is maybe five or six times more used than every other product on the web — combined,” Mark Zuckerberg stated at a developer garage event. This is despite the fact that they didn’t have all of the features that their competitors did when they launched the photos section. For example, they didn’t have high-resolution photos and you couldn’t print them. But one thing they did have was the social element — and this changed everything.

Because of the social element, every vertical would be transformed. I agree completely and I wrote about it here , here and here.

 

Will the future search be “social” or “action”?

 

The world of search is clearly at an inflexion point. Google has dominated search for so long that it has become synonymous with search.

Yet the search world will be transformed in a radical way even before we realize it. Social search powered by Facebook will be a reality because of social plug-ins. I have absolutely no doubts on that account and wrote about its impact in my blog post here.

There is another aspect of vertical search which surprisingly was ushered in by Microsoft’s Bing. However Google seems to be muscling its way here with its recent acquisitions like ITA software. I think this will be a bigger market and it remains to be seen how Google will integrate the vertical search into its current offerings. This will be an interesting development to watch.

“Action” search will perhaps be a new phenomenon. Esther Dyson in a very thought provoking piece describes the need for action search. I was surprised to learn that “action search” was actually an idea that Bill Gates proposed when he said  “The future of search is verbs.” But he said it at a private dinner and it never spread. How did Microsoft miss this profound idea? This as Esther beautifully describes  represents the world more accurately. And that means better, more meaningful responses when we search.