My innovation radar for 2017
As someone with the finger on the pulse of many technology fields in many markets, I tend to have a lateral view on trendy topics. I’m also a contrarian, so take that into account. But if I’d have to share what I have on my innovation radar for 2017, this would be something like that:
1. Energy as the glue of innovation
We usually forget the central role of energy to launch and sustain meaningful innovation.
Consider a phone in early 2017 and compare it to a phone from 1987. The most misunderstood on-going driver that changed the market was energy and batteries management:
In retrospect, it’s easy to understand that what was called a phone then, is very far from what we call a phone now.
Consider now the popular topic of self-driving vehicles. Few experts honestly face the fact that they essentially have also to be electric powered to be implemented on a large scale (maintenance, form factor, safety). But it also goes the other way around: EVs adoption is much easier for self-driving cars (nodes of automated recharge stations are critically easier to implement then city-wide manual plugin stations). Also, electric engine adoption removes most barriers to entry for new competitors on the vehicle market. Think of Tesla or Google of course, but also of the other GAFAs that once the thermic engine has been removed, have much better core capabilities at cars in 2017, then say Toyota or Ford.
But because we can’t yet understand our cars from 2027, we still think of our cars in 2017 as our cars from 2007.
As an adjacent topic now is the time to start wondering who’s going to be late at renewable energies. While most countries following the lead of the US economy kept away from serious investment in alternatives to fossil sources of energy, China is now leading the way with a clear concern for its future:
https://t.co/jbk3byT37C#beijing#airpocalypse#smogpic.twitter.com/Sf5Zom6F9MJanuary 2, 2017
In 2016 for the first time, this fear started to appear in a way that was undisputable for many other capitals in Europe:
https://t.co/tuOZOY5UMWpic.twitter.com/pivhpOyih9December 29, 2016
https://t.co/X3POi5rw2LJanuary 6, 2017
And if you want to benchmark economies in 2017, I would suggest looking at how they deal with carbon emissions:
pic.twitter.com/Sry9xoSc02December 26, 2016[UPDATE Jan.27] Dutch electric trains are 100% powered by wind energy, one year ahead of target. [UPDATE Feb.1st] Tesla reaching critical mass with smart lithium-ion storage grid. [UPDATE Feb.15] Unprecedent 95% growth of US solar market in 2016. [UPDATE Feb.21] Tesla claims 35% cost reduction on battery production.
2. Payment as the glue of innovation (too)
Payment systems are at the core of every B2C transactions and yet they are seldom considered as strategic parts of innovation ecosystems. This is usually a critical mistake.
I tend to closely watch what Apple is doing on that matter (the way they manage payment in Apple Stores is critical for their flawless customer experience):
https://t.co/LbXPjlVC9s#AppleSeptember 8, 2016
Note that the latest (much criticized) MacBook Pro ‘touch bar’ is actually a fully embedded iOS device that manages among other things payments and biometric ID in a secure enclave.
As another matter of interest, the European Central Bank has just announced that it’s planning to replace our IBANs by a mobile phone number identification for 2018.
All this might seem of little interest, but this is defining more and more our identity on the web and by extension our social and professional life. The fact that we now constantly rely on mobile further extends this in an unprecedented way.[UPDATE Feb.17] Jaguar moves forward with Shell, acknowledging cars are payment hub. [UPDATE Feb.21] Apple Pay reaches 36% critical mass in the US. [UPDATE Apr.2] Facebook introduces donate buttons and personal fundraising. [UPDATE May 2] They are now more than 30K payment bots in Facebook Messenger.
3. Mobile at a plateau, what now?
Speaking of mobile, everyone now had the memo: mobile is dominant in business. While it became bigger than most industries of the 80s or the 90s, we still try to figure it out in term of units sold. But mobile is not about the hardware it’s always been about the platform.
The characteristic of mobile is that for the first time in history, it leveraged network effects across many markets. It spans from news to entertainment, gaming, social, photo, hospitality, employment, retail, cars… you name it. And yet we don’t fully cope with the full scale of how “mobile ate the world.” But mobile is reaching the plateau of its S-curve. It is truly massively embedded in pretty much every aspect of our lives and has become the platform of everything.
https://t.co/1FFd9DATmRpic.twitter.com/6DQP2OBsEJJanuary 7, 2017
As such, 2017 will see mobile stretching out to eat further innovation-adverse parts of the market. Think public services, healthcare, real estate or employment. If the propagation of these last huge ripples is obvious, the end-result is very much not so. Who’s going to be uberized next? Banks? Public services?
I’m personally closely watching what is going on with businesses monetizing through ads. This has been a good run while it lasted, but I believe that this is now going to stop with mobile being so pervasive and reaching its full potential. Ads have always been a cumbersome legacy of how TV and newspapers were doing business. It won’t last very long.
Content curation is also on my watch list: with “mobile everything” the way we find what’s next to do, read, watch, play or just buy is bound to evolve rapidly. And I’m not talking about AI, or social marketing either.[UPDATE Jan.27] Car is the new mobile and car cyber security is now a thing. [UPDATE Mar.4] GM offering unlimited car data plan. [UPDATE Mar.21] Adidas disengage from TV ads and goes full digital. [UPDATE Apr.2] The Deck ad network is shutting down. [UPDATE May 2] Facebook push on VR.
4. Rise of China tech
Linking mobile pervasiveness and payment systems together usually brings attention to China, where paying by tapping a phone is the new normal.
https://t.co/i1OHSA5kAzpic.twitter.com/gATNzcffP8July 1, 2016
And while we were constantly reminded for the last 15 years that the US are spearheading consumer innovation with their GAFA (AAFA now?), we chose not to think of what was cooking behind the Great Wall.
#Netexplopic.twitter.com/Drd8SczPW0February 4, 2015
This is the last year we’ll be able to indulge this blindspot on Chinese tech and awakening will be rude:
https://t.co/b3g2tVSbAvOctober 16, 2016
I tend to feel very smart in retrospect for investing time working in Shanghai since 2007 and being lucky enough to be a visiting professor at Jia-Tong University.[UPDATE Jan.23] Baidu Inc. has appointed former Microsoft Corp. executive Qi Lu its group president and COO. [UPDATE Jan.27] Alibaba Forms Anticounterfeiting Alliance With Louis Vuitton, Swarovski and Others. [UPDATE Feb.17] China will lead higher education more and more. [UPDATE Feb.23] Baidu is shaking things up. [UPDATE Feb.26] Chinese wages higher than Mexico, Brazil and Argentina. [UPDATE Mar.4] Baidu's CEO Wants China's Help on Robot Cars and a Local SpaceX [UPDATE Mar.26] Baidu setting foot in the Silicon Valley. [UPDATE Apr.29] It took 21 month to build a $1.5b startup in Shanghai.
5. Invisible technology
If China has become a visible technology powerhouse, innovation is also about what we don’t see. Customers couldn’t care less about your technology. Make your tech disappear while delivering better performances and they’ll be enchanted. This is critically true in the hospitality business, luxury, sports, transportation systems, financial services, etc.
Which is a difficult paradox to deal with: when you’ve invested in tech you undisputably want your customers to see it. It’s a nefarious bling effect.
Imagine arriving at an airport. Drop your luggage at the entrance, spend time shopping or dining for how long as you want, and get called just at the right moment to board your gate without queueing. Magic right? Although that could essentially be done with current, boring mobile technology. But most airports would probably rather work on a VR experience with goggles to wear in the corridors to “facilitate” your navigation, while a drone would follow pulling your luggage in your trail… Clumsy? Yes, but very bling.
(I witnessed workgroups trying to do exactly this while solving how passengers wouldn’t bump into each other with personal proximity sensors. Madness.)
This is more what I have on my radar:
This approach of removing bling from tech is central to our approach of innovative business models focusing on solving critical problems, designing for added value and only then, checking what tech should be brought in.[UPDATE Jan.26] An article from The Guardian on The Rise of the Invisible Computer. [UPDATE Jan.27] Voice as the invisible interface. [UPDATE Feb.1st] Soundhound valuation at $800m. [UPDATE Feb.14] Current hype on drones starts to dissipate.
6. Autonomous vehicles already seeding next gen techs
Having invisible tech operating a retail store, the flux of passengers in an airport or other critical endeavors is already fuelled in 2017 by what’s pouring out of the yet-to-come autonomous vehicle market. I’m speaking of sequential inference algorithms, image and pattern recognition, lidars and proximity sensors, etc.
Before cities, many markets will morph under the influence of these techs and well before the resolution of the complex problem of self-driving vehicles on our streets.
Well before we’ll be reliably able to detect a pedestrian crossing a rainy street where he shouldn’t, and compute in real-time ways for half a ton of metal and batteries to avoid it (all that without connecting with a dozen of other mobile objects with passengers), expect a few things to evolve in your supermarket, in you subway station, or in your hospital.
The central question is about which of all those techs will be unbundled first from AVs research and into which market it will land first?
We’ve already seen how “smart” hi-def displays propelled Nvidia out of PC gaming niche:
https://t.co/qZHWVXEUjEpic.twitter.com/3MpA1NuMvsDecember 31, 2016
Who’s next?[UPDATE Jan.6] Check NVIDIA's CES2017 keynote, especially at the 17:32 mark.
7. Smart-enough bots
And while autonomous vehicles cranked up the hype for Artificial Intelligence, I’m more interested in what lies between pure AI and basic chat bots.
Forget for a moment chatbots as answering machines, or clumsy ways to navigate a website. They are a clumsy skeuomorphic answer to ill-defined problems.
A chatbot will now be able to deal with repetitive customer interactions: is there this item in stock? When do you open your store? When is a parcel X delivered? Can I have a refund…? If you stop there you don’t create any added value, you just remove friction out of the way. The question is how do you go an extra mile and really connect with your customers (without still using full-blown AI systems)?
This is what I call “smart-enough” bots.
Remove the friction AND reconnect customers on more personal issues, or at the critical touch points of their journey with your brand. You might be onto something big.
For reference, I’m very interested in projects such as Clara Labs, where you have a mix of people and bots working on personal services, and you can’t tell when it’s a bot or not. Not a perfect answer by any means, but wickedly interesting:
https://t.co/59OKuVmPBcJanuary 3, 2017
I wouldn’t be surprised to see Uber or AirBnB as active explorers of such solutions this year…
And the hardware equivalent of smart-enough bots would be smart-enough drones. We usually consider drones as manually operated because they came from military tech and that self-operating drones with guns are (for now) a big no-no. But for civilian operations, there’s not a lot of reason to have fully manually operated drones. If the drone is a quadcopter, operate take-off and landing manually if need be. The rest of the flight would be safer and much more efficient without human interference.
Think self-driving vehicles and scale-down difficulty by three or five orders of magnitude.
In that regard for most technologists, the trend is about Amazon, UPS or Domino delivering stuff to your home. But look at (so-called) smart cities projects full of IoT devices. They are strangely devoid of automated, more polyvalent devices.
Although, surprisingly enough for me: Nokia.[UPDATE Mar.4] $200 AI tennis ref. [UPDATE Apr.28] How the NYT leverages bots online. [UPDATE May 2] Facebook Messenger hits 100K bots.
8. Apple as a Service
This blended approach of tech to deliver super-effective market changes might just be at play at Apple this year.
While technophiles discuss at length why the new MacBook Pro can’t run 32 or 64 Go of RAM, or if the iPhone 8 screen should be curved or not, Apple has introduced a dozen new ways of interacting with its ecosystem.
This ecosystem now spans from your wrist to your home, connecting your car (your health), your TV and a few other things. All this with an uncompromising focus on security and data protection. Now obviously, this ecosystem drops the ball on quite a few critical things, but it starts to take shape nonetheless.
That said, will Apple push further how it embeds itself in our life? That might be the case. As for the first iPhone in 2007 lacking its app store, we don’t see yet the full scope of their intent yet. But be sure that if Apple does not manage to be a full-stack SaaS solution for our everyday life, then Amazon, Google, or Tencent are also trying to be there.
In all case 2017 is the time to stop focusing on whether there’s an audio jack or not, and consider where these ecosystems are going (remember: energy and payment are the glue).[UPDATE Feb.21] Apple Pay reaches 36% critical mass in the US within last 12 months, now above PayPal. [UPDATE Mar.18] Pricing strategies making iPhone a hub. [UPDATE Mar.21] Apple flexing back its muscles on services. [UPDATE May 1st] Angela Ahrendts influencial role at Apple. [UPDATE May 19] Apple rebooting its stores.
9. Startups rude awakening
In 2014, I wrote a not-so-short article on the ten reasons why your corporate incubation program was going to crash within two years (in French –sorry about that). Two years later most corporate incubators crashed, or are shutting down quietly.
It doesn’t mean though that corporate incubation is a stupid idea.
It still makes a lot of sense. It’s just implemented in stupid ways, such as a marketing prop for bored multinationals that don’t believe a second that their market could disappear overnight, and that selfies with startupers is excellent PR.
As for us, we’re still ferociously involved in such programs. We just know that these last ten years, all the best ones have been flying under the radar (How do we know? We worked for a few of them; helped design and launch some others). When an incubation program is critical to a multinational, there won’t be ton of press involved.
I expect nonetheless that we’ll start to see some major scaling back in the way startups were enthusiastically promoted as the saviors of both old corporations and global economy in Europe.
Let’s hope it will be for the best.[UPDATE Mar.21] A cautious hope for startups in the automotive market where the ecosystem could start to mature. [UPDATE Apr.30] Giant companies that won't buy your startup.
A final word on my perspective on innovation
As you can see I tend to avoid the most blatant hyped topics of the year. Not that I don’t like them, I don’t trust how they are sold to us for now. Innovation is all about the gray zone between what’s expected and what’s actually feasible (or just deliverable) to people that will pay for it in the long run. Think 3D printing or NFC payment a few years ago, and where they are (not) now.
We all love crazy new ideas and radical, overnight changes. They seldom happen. Or when they do, we’re not equipped to see them. And while we wait for science-fiction stuff, reality does change and morph in unexpected ways.
Remember that this was our phone ten years ago:
And, we have yet to fully understand what happened to us.