Invest today in Innovation to ensure you’ll thrive long-term. Else be prepared to get wiped out!

I’m sick and tired of hearing such lame advice from people.

I don’t know of any company where they were struggling. So they “invested” in “innovation” and suddenly started building great products.

It’s like saying:

30-mins of daily Meditation (alone) will make you more creative!

Sorry you need to practice your art to sharpen your creativity. Meditation can certainly help, but not the essential ingredient for creativity.

Important thing to note is, one cannot treat innovation as a separate thing in which they can “invest” to reap benefit downstream.

Thinking of innovation as an independent entity, separate from the work itself and the culture/context in which the work is done, is fundamentally wrong IMHO.

One has to experiment and try new approaches. You cannot do your work the same old way and set some time aside for innovation. I’ve not seen that work.

In my view of the world, innovation is part of how you think and operate. To some extent its the nature of people and organizations. Its part of your work and the culture of your organization. In fact, innovation is inherent aspect of many businesses. One cannot bring innovation from outside.  Hence one cannot invest in innovation.

“Invest in Innovation” is like saying “Invest in Learning.”

If you are not learning while doing your daily job and thinking of investing time outside your job to learn, then you are in trouble. Either develop the attitude to learn on the job or find a job where learning is inherent part of your job, not something you do in the side.

If you are learning on the job and want to invest additional time to pick up new skills that’s great. But learning on the job is a pre-requisite.

Innovative thinking should be an integral part of your job and your company’s culture, not something you invest after the fact.

Risk and Reward goes hand-in-hand: Overall Services business pays fairly well and its relatively less risky. Product companies have to face all kinds of risk. Starting with what to build, how to market it, how it price it, how to sustain it and so on. But if you can figure out answers to these questions, then Products do pay off really well.

Business Model: Services has a straight forward model. Increase per head revenue and increase head-count. It also has a fairly predictable cash flow. You bill for the time your spent. Product companies have complicated business models. There is very little co-relationship between time spent and revenue. Figuring out the right business model for your product is in fact one of the biggest challenge.

Lifestyle: Services can be extremely stressful or extremely easy going. Depending on the nature of the service, you could have very unpredictable work flow. Causing work to come in unsustainable batches. Usually services involves quite a bit of travel. Generally not good for family life and health. On the other hand, Product developer is usually stressful, but predictable. Lot better on family life and health.

Growth: Services provides you a linear growth path. It depends on the number of customers, number of employees and number of locations you operate in. Product companies usually follow a non-linear growth path. Growth really depends on the value created by your product for the consumer. There is no direct relationship between growth and number of employees or locations you operate in.

Valuation: In services companies, its employees and customer-base are its real assets. If employees are gone, the value of the company is almost zero. For product companies, the product itself is an asset. Good customer-base certainly increases the valuation of the product.

Customer-base: Usually services (at least consulting and training) companies have to deal with dysfunctional organizations (mismanaged expectations and huge communication problems). Working with dysfunctional companies is very depressing and there is not much to learn. And hence not very motivating. Building our own products at least shields us from some of that.

Freedom of choice: In services, you need to work inside the constraints of the client. There isn’t much freedom in-terms of tools, domain, technology, etc. Product companies usually offers a much broader choice. Which usually leads to more experimentation and more accidental innovations.

Bootstrapping: Good skills and reputation is enough to get started in services. It can be gradually scaled out. You can be cash-flow positive from day 1. However for product companies, getting to positive cash-flow takes time and effort. Finding paying customers quickly is hard. In general bootstrapping a product company is a lot harder.

Innovation: Both services and product companies thrive on innovation, but they are different kinds of innovation. Services is driven by innovation in implementation and service quality. While in product companies lot more innovation is required in ideation and in scaling.

Employee’s Attitude: In Product Company you generally Live to Work, whereas in Services Company you could Work to Live. At a Product company you feel your Product is like your own baby, in Services Company you are just Baby Sitting.

It appears to me that the Agile Community is falling behind the innovation curve. At conferences, user groups, mailing list, etc, we see the same old same old stuff (may be I’m missing something). So where is the real innovation happening? What space should I be watching?

These were the questions I posed to the group @ the SDTConf 2009. Later, during our discussion at the conference we tried answering them. After a wonderful discussion we come up with some suggestions:

• Web 2.0
  • Highly Scalability, Performance and Operations space
  • No SQL
  • Continuous Deployment and Monitoring space – Owen’s Slides are a good starting point
  • Watch out for conferences like O’Reilly’s Velocity
• Alternative Language (non-mainstream languages) space. Lot of interesting experiments going on in
  • Dynamic language space
  • Functional language space
  • Hybrid language space
• Domain Specific Language space
• Could Computing, Parallel Computing (Grid Computing), Virtualization space
• Code Harvesting Space – Check out Test Driven Code Search and Code Genie as a starting point
• Complex Adaptive Systems and its implication on our social interactions space. Dave Snowden’s work is a good starting point
• eLearning and visual assessments (feedback) of a programming session. Check out Visualizing Proficiency
• Polyglot Programming space
• With Google Apps, people are able to build 100s of Apps each month and get instant feedback on their ideas
• Social Networking and Second Life space
• Conference: Lot of interesting experiments are been conducted in the conference space. Conferences have evolved to something very different from before.
• Distributed Development and Remote Pairing space

If you would like to contribute to this list, please add your point on the SDTConf Wiki.

• Focus on Rapid Delivery: No one likes to wait for food. No one likes to get cold, stale food. Food is best when its served fresh and hot. The exact same thinking applies to software. If I go to a restaurant and order for starters, main course and deserts, its stupid to expect that I’ll oder everything one-shot and accept everything delivered together. Most probably I’m going to order the starters. Once you get the starters, I’ll see it’s quantity, also taste them and then decide on the main course. And so on. From the restaurant’s point of view,
  • They don’t get nor expect all the requirements upfront.
  • They believe and embrace iterative and incremental delivery model.
  • They deliver food as and when its ready. (focus on throughput). In fact restaurants in India, serve you really fast and they want you to eat and leave as quickly as possible, so that they can server more customers. They really focus on throughput and flow.
  • They keep their customers busy (hooked in)
  • They don’t want to keep the food waiting to be served (inventory)
• Innovation: Profits and Competition are very high and hence restaurants are very innovation driven. They know only good food is not sufficient to keep customers loyal. They constantly do the following to attract repeat orders:
  • Chef’s recommendation and today’s special deals
  • Free Home Delivery
  • Improve interiors and ambience
  • Come up with appealing offers and packages
  • Evolve their menus by adding new items to their menus and food offerings. Constantly try to improve it based on most frequently ordered items
  • Heavy focus on service and customer satisfaction
  • Try to build a personal rapport with each of their customers. Make them feel special when they come.
  • Constantly look at eliminating waste.
    • If plates, spoons, knife, forks and tissues are frequently required, they store them very close to each table. So that they can avoid their movement and hence save time.
    • Try to make their order taking, processing and deliver process more efficient and less error prone (mistake proofing).
    • They divide their responsibilities into various roles like Order taking, delivering food and cleaning up the table. (Same thing might not work well in software because intrinsic knowledge is much higher)
    • The Chefs inside the kitchen learn to keep their work-area clean so that they don’t get caught up in the mess, trying to find things they need.
    • Chefs also do a lot of interesting mistake proofing to avoid confusion between ingredients
    • Restaurants watch food consumption trends and prepare (plan) their food ingredients based on those patterns. For Ex: they know on weekends, they’ll have huge demand, they plan accordingly. (avoid inventory)

We have also seen how a small, really successful restaurant starts scaling by opening franchisees and soon its brand is completely destroyed. Be aware of the scaling black-holes.