Mktg - The escalator pitch

Go to any shopping mall, office complex, or airport where there is an escalator and observe the number of people who are content to allow this twentieth-century wonder carry them to their destination without having to lift a foot. It is difficult to imagine that this is what Jesse Reno had in mind when he patented his “inclined elevator,” or how Charles Seeberger, who later redesigned the device and coined the term escalator, envisioned it being used.

Rather, I suspect, they viewed the escalator as a way to help those who were not able to move well, such as the elderly and infirm, or perhaps as a method for facilitating pedestrian traffic among the more able bodies. One wonders if they might be a distressed to learn that a century later their invention is sometimes slowing the pace of things. Nevertheless, this is what has come to pass.

The escalator can be viewed as a metaphor for many of today’s extraordinary technologies, which can do many remarkable things and make us faster and more productive—provided we view them as tools to assist us rather than as a means to avoid all effort.

To take the analogy one step further, people must learn to “walk the escalator.” Put another way: Before one can hope to jump the curve to the next level, it helps to get a running—or in this case, at least, a walking—start by better utilising existing technology.

The notion of building a better product—a better mousetrap, if you will—is a powerful one, and more often than not the central figure in the story has been the lone individual who is frequently portrayed as diligently laboring away in his basement or garage devising a new or improved product. The importance of individual skill, initiative, knowledge, and capability will always remain important, but a new dynamic is now growing in power and it lies outside of domain of the individual. If one replaces the term mousetrap with mountain bike, this idea become clearer.

It may surprise you to learn that the popular off-road mountain bike wasn’t invented by a single person toiling away in his garage. Rather the bike morphed over time as a variety of committed, dedicated, and passionate cyclists began tinkering with their bikes to help them better meet the stringent requirements of their off-road pursuits.

First someone decided that the bike should have large balloon tires to better withstand the rough terrain. This was followed by thumb-shifting derailleur gears to allow bikers to more easily navigate steep mountain slopes. Next came motorcycle lever-operated drum brakes (to better stop while moving downhill), and eventually flat handlebars and lightweight tubing were added to confer additional advantages.

The lesson in this story is twofold. First, products evolve. Secondly, evolutionary advances and often developed by the people who rely on the product and not employees of the company manufacturing the product. There is nothing new or radical in this idea, but today’s technology has now sufficiently advanced to the stage where businesses can do a much better job of reaching out to those users to harness their ideas and speed up the evolutionary progression of their products.

At the forefront of this trend is the open-source movement. To fully understand the potential of the open-source movement, let us focus on something tangible:gold. In 2002, GoldCorp’s CEO, Rob McEwen, wasn’t fully convinced that, in spite of what his company’s experts were telling him, there wasn’t more gold to be mined in his company’s main Red Lake mine.

To test his hunch, he proposed to do something radical. He wanted to open up his company’s geological data—which in the gold industry is a closely held proprietary secret—to the world’s most knowledgeable mining experts and give them a chance to determine if there might be more gold in the mine. As an incentive, McEwen offered a sizeable financial prize to anyone who could make a compelling case as to why his company should look for gold in a particular location. If the person’s hypotheses proved correct, he or she would be awarded the money.

Over the objections of his board of directors, McEwen posted his company’s information on the internet. Within days the website generated 500,000 hits, and 1,400 people from over fifty countries entered submissions. The company then selected the five best entries and began mining. Goldcorp struck gold on four of five selections. Today the company has increased its market capitalisation almost fourfold, and Red Lake mine remains one of the world’s more profitable gold mines.

There is no shortage of other companies tapping into the open source movement. Lego and iRobot, the maker of the robotic Roomba vacuum cleaner, are allowing their best customers to see and experiment with early beta versions of products, and they are listening to their suggestions about how to improve these products. IBM is opening up its patents to outside lawyers and even its competitors in an effort to speed up the patent-approval process, and Proctor & Gamble and a handful number of pharmaceutical companies are using a website called InnoCentive.com to post some of their more intractable problems in the hopes of tapping into the expertise that exists within the broader research community.

In fact, back in 2000, P&G, which has a large research and development staff of 8,000, announced an ambitious goal of having half of its new products and technologies come from outside the company. Seven years into the initiative, the company reports that 35% of all new products bear at least some input from outsiders. Moreover, it reports that productivity of its in-house staff has increased by 60%.

The earlier point about how P&G has increased its productivity speaks to another new mechanism that can increase productivity: wikis. Established on the premise that all of us together are smarter than any of us individually, wikis provide a powerful tool for helping companies collaborate on projects, manage group information, and incubate ideas on an accelerated basis.

The concept has grown so popular that even the process of writing of books is being wiki-fied. In the fall of 2006, I accepted an invitation to participate in the writing of a book entitled We are Smarter Than Me, which attempts to demonstrate that a community can write a more compelling book than an individual expert. I can’t say I contributed anything terribly profound, but I did add the following example to the chapter on open-source ideas:

Scott Adams and Dilbert. In 1998, Scott Adams, the creator of the comic strip Dilbert, became the first cartoonist to publish his e-mail address in his carton strip. Whether it was by strategic intent or dumb luck, Adams now regularly supplements his comic strip—which chronicles bureaucratic absurdities, management ineptitude, and bouts of corporate stupidity—with poignant insights and stories from his legions of fans who send him more than one thousand e-mails a day. From this pool of ideas, Adams has been able to augment his own extraordinary creativity to create more cartoon strips, and he also draws on the public’s input to provide better content for his books, websites, and blogs.

Whether it will be accepted, modified, or deleted is now in the hands of the community. The more intriguing result will be if the project works and the community creates a compelling book. My hunch is that it will because wikis offer an easy-to-use mechanism for tapping into a wider base of knowledge. Wikis also allow ideas to be shared, modified, amended, and otherwise improved on a faster basis than any conventional system.

—Reprinted with permission from Viva Books

Book: Jump The Curve

Author:Jack Uldrich

Price: Rs 275