When I think about continuous improvement, I think about this small plaque at the EAA AirVenture Museum in OshKosh, WI.
In 1903, the Wright Brothers made the history books with the first "controlled, powered and sustained heavier-than-air human flight." Everyone celebrates the first flight, which was 40 yards in about 12 seconds.
The most interesting aspect of the day is how much the Brothers improved. By the end of the day, they stayed in the air 59 seconds (391% improvement) and traveled 852 feet (610% improvement). In terms of speed, the first flight was 10 ft/second; the final flight of the day was 14 ft/second (40% improvement).
The best part about being in the start-up community is watching other start-ups. Almost every week, I learn about a new company that stops me in my tracks and makes me say, “Damn, that is so obvious. ABC company is going to forever change the way we do XYZ.” Here are three companies that have given me this reaction.
Venture capital was created 56 years ago. Before Eugene Kleiner’s shot-in-the-dark letter that landed on Arthur Rock’s desk, there was no institution for funding smart people with new ideas. That changed when Rock connected Kleiner and 7 other colleagues with Sherman Fairchild. Fairchild invested $1.5 million into the 8 transistor scientists to create Fairchild Semiconductor. Fairchild Semi was a success, at first, but soon the founders left because they did have enough equity. Two Fairchild employees - Robert Noyce and Gordon Moore - went on to found Intel. (To learn more about the fascinating history of VC and The Valley, check out this interview and the movie Something Ventured.)
Venture capital was a tectonic innovation in finance. But in the last half century, not much has change: VCs raise money from Limited Partners and invest in young, un-established companies with mountains of potential. In fact, the major innovation has been the rise of secondary markets like SharesPost and SecondMarket. These exchanges give shareholders of private companies liquidity, which is great. But these markets have not changed the fundamental way in which early stage ideas get funded.
The way that VC offered equity financing for early stage companies, Kickstarter offers working capital finance. This is huge. Before Kickstarter, working capital finance was restricted to established companies that had good relationships with banks. Now, a company with a novel product idea can create a Kickstarter campaign and pre-sell units. Since the company receives the money before shipping the product, they have capital on hand to deliver the promised product.
In short, Kickstarter gives early stage entities a form of finance that did not previously exist for them. The key question is will Kickstarter launch a billion dollar business? Naysayers say no way; Kickstarter is for crafts and movies. I say, if Kickstarter was around in 1976, Jobs and Wozniak would have created the “Apple 1” campaign.
Look at the data. Texting is on the rise; voice calling is on the decline. Recognizing this, TalkTo created an app that allows anyone to text any question to any business. Want to know if Whole Foods has your favorite microbrew? Launch TalkTo, select Whole Foods, and shoot off a text. Running late for a dinner reservation? No worries; TalkTo has your back.
I was in New York City this weekend and used TalkTo half a dozen times. It worked flawlessly. I was able to get a restaurant reservation, change said reservation, and double check that we would be seated outside.
Within one day, TalkTo inserted itself between me and every business that I interact with. In other words, TalkTo -- not the restaurant, bank or hotel -- owns the relationship. This is incredibly powerful: owning the customer relationship is the holy grail in business. In the insurance industry, for example, brokers and underwriters constantly struggle to own the policyholder relationship. Owning the relationship enables companies to better understand customer needs and ensure quality interactions, leading to customers that stay longer and buy more.
By building a simple app that delivers as promised, TalkTo is poised to change the way that people find information about and interact with companies. What company recently did that? I’ll give you a hint. It starts with a “G” and ends with an “oogle.”
I love services that create marketplaces. The two most recent examples are Airbnb and Uber. Airbnb looked at the world and said how can we connect supply (people with spare beds) with demand (people looking for an inexpensive place to stay). Uber did the same thing, connecting underutilized Town Cars with people seeking reliable and convenient car services.
GigWalk is connecting businesses that need market research with people looking to make a few dollars. A brand - think Colgate, P&G, etc - needs to understand (or audit) how its products are being placed on the shelf at retailers. The brand could send in a dedicated “secret shopper,” which is costly and logistically challenging. Or, the brand could use GigWalk to push an alert to anyone in the area and ask them to simply take a photo of the Dental Section.
I particularly like GigWalk because it is an everyday product. A simple trip the grocery store or Starbucks or a restaurant could net a GigWalker a few dollars. In short, GigWalk looked at the world and said how can we use existing tools to mobilize people to solve a business challenge.
For those interested in technology, this was an excellent year in film. The first and most obvious film about technology was The Social Network. However, the film that best captured the disruptive nature of technology was The King’s Speech.
The King’s Speech is set in pre-War War II England and the focal character is the stuttering Prince Albert, who eventually becomes King George VI (Colin Firth). In previous times, a stutter would not have affected a member of the Royal Family; George could have commanded from on high using letters and personal diplomats. Prince Albert’s father, King George V, who was the first post-radio king, summarizes the situation perfectly: “In the past all a King had to do was look respectable in uniform and not fall off his horse. Now we must invade people’s homes and ingratiate ourselves with them. This family is reduced to those lowest, basest of all creatures....we’ve become...actors!”
And that is the definition of disruptive technology: the advent of a technology that dramatically and permanently changes people’s lives. The King’s Speech superbly captures this with just a few lines.
In contrast, The Social Network did not capture the disruptive nature of Facebook. At no point does the film depict the ways in which Facebook has changed the way people stay connected, make buying decisions, organize politically and entertain themselves. In short, if you knew nothing about Facebook and watched The Social Network, you would think that it is a service on your computer that a lot of people use -- but you would not know how or why they were using Facebook.
Aaron Sorkin, who wrote the screenplay, clearly stated that the movie wasn’t about Facebook, but rather the “themes as old as storytelling itself...Themes of friendship and loyalty, and of class and jealously and power.” That’s his choice. But by failing to capture the personal and societal changes brought about by Facebook, it is difficult to understand why the company is worth $50 billion and why it’s worth fighting for.
I'm the Founder and CEO of Peak Support. This blog is my take on early-stage companies and innovation. Every so often, there may be a post about culture, networking, family -- you name it. After all, what is a blog if it isn't a tad bit unstructured.