What Samsung Could Have and Should Have Done Today

Samsung unveiled Galaxy Note Edge which is featuring a curved screen. It offers a new possibility that enable offer new ways to use smartphones. Yet, as many reporters have already pointed out, whether this “innovation” will succeed or not largely depends on software. That is, if there are enough third-party apps that take advantage of this new screen, it will become an essential feature that will be copied by other smartphone makers. However, if third-party developers ignore this, it will be largely forgotten and will be remembered as another gimmicky innovation by Samsung.

What would Apple have done in this case? They would have chosen one or two key apps that would perfectly fit with this new screen before today’s introduction. It would be perhaps something like Facebook status update or Twitter status update. And, it will not be done by Apple, but by Facebook or Twitter team. And, during the presentation, they would have shared the stage with Facebook or Twitter developer to show off the new app tightly integrated with the new screen. And, then they would say that the APIs and SDK are made available for all other unlucky developers who want to take advantage of this. Soon, many app developers are eager to incorporate this new feature into this their app. Other makes must find a way to introduce a third screen in their own smartphones. So, it becomes a dominant design, so to speak.

In today’s announcement, however Samsung did not line up any major software developers who are building their flagship app to take advantage of this new feature. It is left up to the developers in the future to decide whether they would take advantage of this new feature or not. Oh, by the way, this phone will not be available widely. It is a niche market phone. So, if you are a developer, why would you spend your valuable time and resources to build a feature for a phone that is only available for few markets? So, what is the point of introducing this innovation at all? If this is an innovation that might differentiate its phone in the market, why not double down with it and invite all major developers to your developers conference and encourage them to build new apps taking advantage of this new feature? Instead, this new feature will be most likely only working with Samsung’s own apps that most users do not use. Therefore, this new innovation is dead on arrival. 

Every once in awhile, you get a chance to redefine the market. Potentially, this new form factor in hardware could have been such an opportunity. Such an opportunity is not to be discovered. They must be designed. Samsung fundamentally is a hardware company. In fact, it is a very good one. So, it must build its innovation strategy with an idea to build an ecosystem around its strength – that is, hardware, instead of envying the model of ecosystem around something that it does not have — namely software. The issue is how to create a locked-in user base based on unique user experiences. Of course, user experience will depend on third-party apps. Then, you need to send a clear and loud signal that you are committed to make this new hardware feature to succeed and ask and lead third-party developers to build apps that take advantage of this new feature. If you design your strategy right, you can in fact successfully execute your innovation strategy in such a way that you lock-up both developers and users using your own unique hardware features. 

But unfortunately that did not happen today. So, my prediction is that this new Samsung Note Edge will be a phone that will be largely forgotten soon. The round screen will be remembered as one of those strange technology innovations that did not have clearly defined usage case. The sad part is that it did not have to be this way. It could have been that it is the feature that everyone was waiting for, except that no one knew that they needed it. In a way, that was what Steve Jobs did with touch screen keyboard, by making us somehow believe that software keyboard on a flat screen is better than physical keyboard. 

As I am getting bored with a flat multi-touch screen, I was really hoping that Samsung would be able to present a compelling vision to build an ecosystem around its unique design. But it did not happen today. It seems that when it comes to mobile phone, Samsung’s design still focuses on hardware and hardware only. It still needs to learn how to build its own design strategy to build an ecosystem. At least, not yet. 

Two “what-ifs”

(1)

What if Samsung buys Dropbox? DropBox is currently estimated with a market valuation of $10 billion. What if Samsung would buy it? If they can, the following could be a possible scenario.

They can integrate DropBox service with 1TB free storage space for every Galaxy phone and TVs that they sell. But why would they do it? Because this can give them a shot at creating a powerful ecosystem of their own.

The combination of hardware and cloud infrastructure for all devices (possibly together with power efficient OS Tizen) can be a game changer for them as it might attract large number of developers for n-device strategy to their ecosystem.

(2)

What if Samsung would provide 120GB phones at a price that is competitive, and also increase the overall memory capacity of their phones? This would attract developers to build new types of mobile apps. One of the most challenging parts of mobile app development is memory management. If Samsung can do this with their own SDK that provides a simpler memory management framework, this can be a game changer for some developers, such as mobile game developers that require a lot of memory.

Both of these ideas are based on the idea of creating a new ecosystem that can be potentially attractive to developers.

P.S. These are the randome thoughts that I came up with during the class discussion on digital innovation by design.

why abundance can be bad for creativity

IMG 0103

I just finished teaching a course on “digital innovation and design” at ISB. Like previous years, students worked on “re-imagining Hyderabad Public Transportation Experiences”. What surprised me this time was how homogeneous their ideas were. They all went for a combination of smart card, a GPS-installed vehicles, cloud-based analytics, optimization of route balancing, and personalized route planning. With some twists here and there, the solutions that they suggested were remarkably similar to each other. As the focus of the course was innovation, I took this as a warning sign.
In the past, students avoided such a solution, because installing GPS for every bus was prohibitably expensive. Therefore, they had to find something less obvious. They had to work hard to look for ways to change rider’s experiences without resorting to expensive technology infrastructure. Their ideas were authentic, ingenious, and fun.
Now, merely 16 months later, the cost of technology has come down enough to make such an idea more plausible. Technology resources now have become abundant. A solution with a smart card combined with cloud-based optimization together with a distributed GPS network on vehicles seems like an inevitable thing to happen in India. As a result, everyone went after “that” obvious solution. They did not have to work hard to find a solution for the problem.
The abundance of resources can inhibit creativity and innovation. While practical solutions can be easily discovered and implemented, unexpected and less-obvioius solutions become more elusive when design constraints are relaxed. This does not mean that technology advancements are bad. But with technology makes “innovations” accessible to everyone, real innovations become even more elusive, demanding us working even harder to find them. This seems apparent when we look at hundreds of thousands of apps that are essentially trying to do the same thing. How many different variants of Candy Crush, Flappy Bird or WhatsApp do we need? Probably not as many as we already have. One of my current studies on digital innovations suggests that what seems to be highly generative space of digital innovations can be in fact nothing but an illusion. Most of them are simple and minor mutations of other ideas. There were only handful real innovations that we could identify.
When we face such a problem of abundance, it might be necessary to create artificial constraints during the design process. Perhaps, I should have told the students that the integration of GPS, cloud-based analytics and smart card should be taken as a given starting point of their inquiry. Perhaps, I should have given them full access to all the reports from last two years, asking them to take those as the starting point. That might have created more stringent constraints so that they could not settle with obvious and seemingly inevitable solutions. Constraints are the best friends of designers.

design innovations in India

I am currently visiting Indian School of Business to teach design inquiry and its application for digital innovations. With Design Inquiry, I ask students to focus on the FIVE key questions:

  1. What inspires you? 
  2. Who are the affected stakeholders?
  3. What are the unmet needs?
  4. What do you want to do to change the situation?
  5. What are resources you need to create and sustain the solutions?

When I teach my class, I typically ask students to identify “extreme” users who magnify the hidden needs that often neglected by the everyday users. Here in India, and I assume it is the case in other emerging markets, everyday users are often extreme users. When you see people hanging on to the doors and windows of a crowded bus, or when you see 8 or 9 people in a tiny little auto rickshaw, or traffic signals that are there merely as decorations, you don’t need to work hard to identify extreme users and discover unmet needs. As my colleague MB Sarkar once said, “the unmet needs are screaming loud and clear”. 

IMG 0182

Opportunities to design new solutions here are abundant. At the same time, students must deal with very tight constraints. They cannot assume that the government will make massive infrastructure investments (of course, the same is true in the case of the US). They have to deal with underground economy of auto rickshaw drivers who only want to deal with cash for an obvious reason of tax evasion. You deal with a large population to whom smartphones are still too expensive. 

Yet, they still envision a public transportation system that is safe, reliable and convenient. In the process, students discovered existing data sources, clever ways to get real-time location information of buses, and ways to leverage crowd-based data. When I told a team to think about how to build initial contents of a customer review database, a student told me, “in India with all these people who are using these systems, it will be done in 10 days”. I am not sure if it will be indeed only 10 days, but I realized that we are dealing with a different scale.

Often the challenge is reframing the problem from one of a large scale infrastructure investment to one of massive collaboration network with cleverly designed incentives to create and sustain the participation of the public. Students are also often trapped by the lure of digital physical artifacts, rather than thinking about digital service that can be delivered through simple SMS technology. Instead of thinking about cheap and reliable SMS services, they want large interactive digital screens. With unreliable electric grid, I do not think that students should build digital kiosks for bus stop and train station. 

If they are successful, however, the solutions invented here — lean, sustainable, and large-scale — can change the way we think about digital innovations in more developed countries. We in the “first world” often complain about battery life of our smart phones — of course, it is because our screens are getting bigger. To power up LED screens on buildings and stations, we need to burn up more fuels somewhere. In cities like Philadelphia, I am not sure when or if the governments at any level will ever spend enough money to renew the aging physical infrastructures to make them smart. So, in an ironic way, places like India is a hot bed of innovations and design. In order to create new solutions for the real problem with extreme constraints, they have to draw on new human creativity, collaboration, and whatever that is available around them.

Somehow the success of companies like Apple have made design a thing of luxury. And that is bad. We emphasize human-centered design, but are we really solving the right problems? Making it easier for us to take photos and “instagram” them million times might be an interesting problem to solve, I don’t think it will make any difference to billions of people who desperately need solutions for their basic needs. We should stop solving what we have dubbed as #firstworldproblems and start solving real problems. Otherwise, design as we know it will follow the same fate of many other clever ideas that business schools and corporates have adopted in the past. That is, to disappear as a fad.

give me a kindle or an iPad

I am flying in an Airbus 330 of US Airways, back from Barcelona. Just like any other flights, as soon as I settled down, a flight attendance came to me offering a newspaper. Since I was reading my New York Times on my iPad, I politely declined her offer. Then, about 10 minutes later, a routine “please turn off all your electronic devices” announcement came through. I grudgingly turned off my iPad and started looking for something to read. Since I travel only with my iPad and MacBook Air nowadays, I often find myself having nothing to read during the takeoff and landing. I sometimes read airline magazines, Duty Free shopping magazines, the dreadful Sky Mall catalogue (although I must admit that it is always inspiring to read it to find out what not to do in terms of innovation), and even safety instruction cards.

So here is a suggestion. Why don’t airliners work with Apple (or Amazon) to design an iPad (or a Kindle) that does not interfere with their system and handout iPad (or Kindle) pre-loaded with newspapers, magazines, and popular books? In fact, Samsung or any other Android-based tablet device manufacturers might do it as well. This device should be pre-certified so that passengers can continue to read contents during the take-off and landing. It will save papers, keep my fingers clean and most importantly give me something to read during that takeoff and landing period (probably the most boring time during any flight).

P.S. I wrote this posting couple months ago, but never uploaded to my blog site. Recently, Wall Street Journal had this article raising a question about the necessity of the routine procedure of “turning off all your electronics”. 

왜 한국에는 start-up 문화가 없을까?

요즘 Urban Apps & Maps를 하면서 start-up 들에 대한 많은 생각을 한다. 미국이라는 시스템에서 필라델피아에 사는 가난한 흑인들에게 디지털 기술을 이용해서 자신들이 원하는 제품을 만들어서 자신들의 삶을 변화시키고 그 결과로 urban civic start-up 들을 만드는 것이 프로젝트의 핵심이다.

이런 일을 하면서 이곳에서 start-up쪽으로 일하는 많은 사람들을 만나면서, “왜 한국에는 실리콘 밸리가 없을까?” 하는 생각을 하게된다. 이제까지 들은 생각을 정리해 본다.

1. Second Chance가 없는 문화적 강박성

한국에서 start-up이 자리잡지 못하는 배경에는 “the second chance”가 없는 문화적인 강박성이 있다. 얼마전 이코노미스트에 한국의 수능시험에 관한 기사가 났다. 제목이 재미있다. 한국은 “one-shot society”라고 말한다. 단 하루의 시험으로 일생의 운명이 좌우되는 사회라는 기사였다. 여러가지로 대학입시의 제도가 바뀌었다고는 하지만, 아직도 큰 틀은 바뀌지 않고 있다. 이때까지 태어나서 내가 알고 있는 모든 것을 다 하루의 진검승부로 결판을 내는 것이다. 한국과 같이 출신학벌이 중요한 사회에서는 그날의 결과로 앞으로의 진로가 대충 결정이 되는 날이다. 그야말로 운명의 날이다. 모든 것을 걸고 사생결단을 보는 인생의 high noon이다. 잔인할 정도로 효과적이다. 단 하루로 한 사람의 가치를 대충 결정을 해버리는 사회이다. 그날 실패를 하는 것에 대한 두려움과 공포감이 학생들과 부모들을 거의 광적으로 몰아붙인다. 그러다 보니, 고등학생들의 자살율이 그토록 높은 것 같다.

미국은 거의 정반대의 시스템이다. 지루할 정도로 수없이 많은 기회가 있다. SAT를 보려고 하면 몇번을 봐도 상관이 없다. 그리고 원하는 명문대학에 못 들어가면, 별 상관이 없다. 기본적으로 대학들이 무수히 많다. 그리고 원하는 대학에 못 들어가도, transfer라고 하는 문이 있다. 심지어 2년대 community college를 다니다가도 거기서 열심히 공부를 해서 좋은 엘리트 대학으로 편입하는 경우도 있다 (이와 관련된 NYT article). 내가 잘알고 있는 청년이 있다. 예전에 한국에서 고등학교때 도피유학으로 LA에서 열나게 놀았다. 그러다가 마음잡고 클리브랜드로 와서 community college를 다니면서 일을 했다. 그리고 그곳에서 좋은 성적을 받아서 드디어 Ohio State로 옮겨가서 CPA가 됐다. 큰 회계사 펌에 있다가, 지금은 골드만에서 일하고 있다. 주변에 보면 그런 인물들로 가득차 있다. 아마 내가 아는 사람들의 이야기로 그런 이야기를 해도 하루 종일은 할 수 있을 것이다.

The second chance의 문화는 지극히 기독교적인 생각이다. 흔히 기독교적인 용어로 표현을 하면 “은혜”다. 막말로 표현하면, “이제까지 한 건은 없던 걸로 해줄께, 다시 해봐”이다. 신학적인 용어로는 “redemption”이라고 한다. 강간을 하다가 끌려온 여인에게 예수가 말했다. “나도 너를 정죄하지 않으니까, sin no more!” 막스웨버는 미국에서 본 창업자정신을 기독교 윤리로 풀어서 생각했다. 막스웨버가 보지 못한 또 하나의 청교도 문화의 근간을 second chance라고 생각을 한다. 물론 요즘 한국 기독교가 워낙 엉터리다 보니까, 사실 교회안에서도 second chance, 흔히 말하는 “은혜”가 별로 없다. 한번 실패하면 영원한 실패자가 된다. 그래서 교회안에 더 많은 정신 강박증을 가진 사람들이 많은 것 같다.

2. Risk의 사회적 공유

이런 문화적 맥락에서 start-up을 하다가 실패하면, 집안의 패가망신을 한 사람이 된다. 한번의 도박으로 모든 집안을 말아먹은 죄인이 된다. 미국에서 start-up을 하다가 망하면 좋은 경험을 했다고 한다. 오히려 serial entrepreneur라고 훈장 비슷하게 달고 다닌다. 그들이 하는 농담이 있다. “If you throw enough shits to the wall, eventually some of them will stick — 똥을 계속해서 벽에 다 던지다 보면, 어떤 것은 결국 벽에 붙는다”. 똥이 벽에 붙을 때까지 해 보겠다는 것이고, 그것이 문화적으로 허락이 되는 사회이다.

이에 반해서 한국에서는 VC의 기반이 없기 때문에, 은행의 융자나 제 2 금융권, 또는 개인의 사채를 통한 융자자금으로 사업을 시작한다. 그러고 이와 같은 융자는 투자가 아니여서 시간이 지나면 자금회수가 시작된다. 자금회수에 실패하면, 사업자는 형사법상 범법자가 된다. 그야 말로 죄인을 만든다. 열심히 일해서 회사를 만들어보려다보면 안될 수도 있는데, 그렇다고 그 사람을 범법자로 빨간줄을 그어 버린다. 또한, 일단 그렇게 해서 망하면, 온 식구들이 그야말로 길거리로 나가 앉는다. 먹고 살 길이 막막하다. 만일 내가 미국 MBA 수업에서 “너희들 나가서 창업해라. 단 하다가 망하면 콩밥 먹는다”라고 했을 때, 그래도 창업을 하겠다는 학생들이 있을까?

이것은 start-up의 risk에 대한 사회적 공유가 되어있지 않기 때문이다. 한 사회에서 start-up이 성공하기 위해서는 Plan B에 대한 보장이 어느 정도 있어야 한다. 그리고 그 Plan B는 위험의 사회적 공유이다. 그래서 요즘 스웨덴과 핀란드와 같은 북구에 한창 start-up 붐이 일어나는데, 그것에 대한 한 배경으로 잘 발달한 사회보장제도를 그 근간으로 든다. 그쪽에서는 아버지가 사업을 하다가 망해도 식구들이 길거리에 나가 앉는 경우가 없고, 아프면 병원에 갈 수 있고, 아이들은 대학교에 갈 수 있다. 미국에서는 VC와 angel funding 을 통한 risk의 사회적 공유가 있다. 사업을 하다가 망해도 집을 지킬 수 있다. 일하기 위해서 차가 필요하다고 하면 차도 지킬 수 있다. 물론 내돈을 들여서 사업을 하다가 파산을 한 경우이다. 많은 IT start-up의 경우는 자기의 자본투자는 극히 적다. 아이디어를 들고 뛰어서 시작을 한다. 그러다 안되면, 안되면 그만이다. 의도적으로 사기를 치지 않은 이상은 감옥에 가지 않는다. 또한 사회 전반적으로 Plan B가 어느정도 보장되어 있다. 물론 최근들어서 미국의 중산층이 무너져 내리면서, 과연 앞으로 미국의 start-up culture가 지속될 수 있을 것인가에 관한 근본적인 질문을 던질 필요가 있다. 어느 사회에서든 한 개인이 start-up에 대한 모든 risk를 다 감당을 해야 한다면 그와 같은 제도하에서는 start-up 문화를 기대할 수 없다.

물론 risk의 사회적 공유가 이루어지려면, 결과에 대한 사회적 공유도 필요하다. 기업의 공유화가 어떻게 보면 risk 사회적 공유에 대한 근본조건이라고 할 수 있다. 미국에서는 주식회사, 북구의 사회민주주의는 각각 다른 모습으로의 결과의 사회적 공유에 대한 합의 결과이다. 물론 최근에 일어난 Occupier 운동에서 보여지듯이 이와 같은 근본적인 사회 계약이 무너져 내리게 되면 여러가지로 사회 시스템에 대한 문제가 불거져 나오게 된다. 그러나 단지 2%의 주식을 소유하고도 대기업을 자식들에게 대대손손 물려주려고 하는 사고의 변화가 일어나지 않는 한, risk에 대한 사회적 공유의 대한 사회전체적인 동의를 끌어내는 것은 불가능하다고 할 것이다.

3. 끝내기

오바마가 한국에 와선 언급을 했다고 흥분하는 카카오톡과 미투데이, 몇 안되는 한국의 성공적인 start-up들이다. 만일 한국의 재벌들이 투자 방식을 근본적으로 바꿔서 미국의 VC들 처럼 움직인 다면 어떻게 될까 생각해 본다. 재벌 해체하자, 어쩌자가고 하는 생각은 너무나 글로벌 시대의 경제 전쟁을 낭만적으로 보는 되는 철없는 시각이고, 이왕 가지고 있는 것을 좀 어떻게 잘 써볼 수 있도록 하면 어떨까 싶다.

예전에 한국에도 전 국민적인 동의를 가지고 움직인 시대가 있었다고 생각한다. 물론 과거를 돌아보면 모든 것이 낭만적으로 보이긴 하다. 그래서 첫사랑에 대한 기억은 절대로 현실적으로 성공할 수 있는 이유이다. 60-70년대, 우리가 모두 “체력은 국력이다”를 되새기면서 아침마다 국민체조를 해서 체력 (국력)을 기르고, 동네마나 “잘살아 보세” 노래가 흘러나올 때가 있었다. 지방에서 올라온 누나들은 “공순이”라는 소리를 들으면서 희생을 했고, 우리의 아버지들은 피를 토해가면서 밤잠을 설치면서 일했다. 중동에 가서 송유관 만들고, 남들은 절대로 못 만든다는 배도 뚝딱뚝딱 만들냈다. 여기에, 자본가들 또한 미친 투자를 했다. 남들은 하면 안된다고 하는 자동차산업(현대) 반도체 (삼성)에 우리 세대에는 손해를 봐도 다음 세대를 위해서 이런 투자가 필요하다고 하면서 천문학적인 돈을 쏟아 부었다. 물론 군사독재 정권의 협박과 외유, 뭐 여러가지 이유가 있었겠지만, 결과적으로는 경영학적으로 경제학적으로 전혀 말이 되지 않는 투자를 했다. 미친짓이었는데도 했다. 그리고 국민들은 그것을 봤다. 아마도 그때, 그렇게 생각하지 않았나 싶다. 저 양반들은 자기들 돈으로 저렇게 손해 볼 것을 알면서도 투자하는데, 나도 한번 죽도록 일해보자. 그래서 우리한번 우리 자식들은 한번 큰 세상에서 떳떳하게 경쟁하면서 살 수 있도록 만들어보자. 결과의 공유 (혹은 공유의 환상)에 대한 암묵적 사회 계약이 있었고, 그것은 노력과 희생의 사회적 공유로 이어졌다. 그런데 80년대를 지나면서, 그 결과의 사회적 공유에 대한 암묵적 계약 (혹은 환상)이 철저히 깨졌다. 그것이 요즘 사회 전반에 흐르는 대기업, 가진 자들에 대한 부정적인 생각의 근간이 아닌가 생각한다.

앞으로의 경제는 과거와 같이 몇몇 대기업들이 희생적인 투자를 해서 이루어질 것도 아니고, 그런다고 나서도 믿을 국민들도 그렇게 많을 것 같지 않다. 오히려, 대기업들이 start-up에 대한 사회적 risk의 공유를 할 수 있는 infrastructure로 변환을 하는 그런 방법을 생각해 보는 것은 어떨까 하는 생각이 든다. 물론 그러기 전에 한탕주의 대학 입시 제도 부터 고쳐야 될 것 같다.

Allowance Account: iTunes’s secrete weapon

Both my teenage boys have an Apple’s allowance account. I set them up few years back, when they first started using iPod. To me, the most brilliant example of Apple team’s user-centered design approach is this allowance account.

When Apple designed iTunes music store, one of the things that they had to solve was teenagers. That is, how would they pay for the music that they want to buy? They learned that a large percentage of teenagers were willing to pay for the music, if there were easy way to do so. (Of course, it is not their money anyway.) Most of the internet transactions require credit cards and parents are not going to log in each time their teenage boys and girls want to purchase $1 music. So, Apple created an allowance account. Once parents can link allowance accounts to their primary iTunes account, each month kids get their “allowance” automatically. And, they can buy music in anyway they want. Win-Win for parents and kids. Of course, this is a great business for Apple. While music record companies were criminalizing teenagers, Apple wanted to design a solution to solve that problem. (A lesson here is that you will do well if you pay attention to hidden, and often vulnerable, stakeholders. These hidden actors rarely show up on your CRM database.)

Now, once Apps became available, iTunes allowance account became even more important. Most of the Apps cost few dollars. Many of them are silly games. Who do you think buy those games? Of course, some adults who have nothing else better to do. But I suppose a large portion of those might be coming from kids who have an allowance account. Again, who wants to open up their wallet and enter their credit card information each time his 13-year old boy wants to buy new Angry Bird Space?

It is no surprise to see in Rovio introduced only free version of Angry Bird Space for Android, but paid version for iPhones. I suspect that the allowance account has a lot to do with this difference. Of course, this is a pure speculation on my part as I could not find any data about the number of allowance account. What I do know is that there is no equivalent of iTunes Allowance account in the Android ecosystem. Of course, there are many other factors that made iOS as more attractive for paid apps than Android, but the payment system including the allowance account certainly is an important factor. Once you create an initial condition, given a huge positive network effect, this type of slight design difference can make a huge difference in the long run.

The end of Kodak and the IS Scholarship

I wrote a research essay reflecting on the end of Kodak and the new role of IS scholarship. The core argument is based on the generative nature of digital technology that leads to the emergence of layered modular architecture and how it creates new types of innovation dynamics (an example of such innovation of digital camera). I argue why the idea of product, industry and hierarchical decomposition (as a way of dealing complexity) is now fundamentally problematic.

the tables have turned.pdf (updated final version as it will appear in the Journal of AIS).