The INs and OUTs of Digital Innovation
A revolution is underway thanks to digital tools and platforms that dramatically lower the costs of innovation. Collectively they usher in the rise of desktop production. As the makerspace evangelist and author of “The Maker Movement Manifesto” Mark Hatch puts it “When you move something from $1 million in development costs, or $250,000 in development costs, down to $2,000, $5,000, you now enable anyone in the middle class to innovate.”[i] If you have a Visa card you can access production tools that in the past were only available to VC-backed startups and established blue chip companies.
And you don’t have to be a tech guru to use them. Take the example of one of myundergraduate business students. In our Introduction to Entrepreneurship class (think Innovation 101) I gave a quick presentation on 3D printing tools. The following week a student came back with a number of innovative iPhone cases she had made. When asked how she did it, she said she used her credit card to buy a $300 3D printer and taught herself to use it over the weekend. Kids today…
Executives around the world intuit the changes this portends, but there are limited frameworks for understanding the mechanisms at work. To thrive in this new world, executives have to learn the ins and outs of digital innovation.
Innovation as Manifesting a New Reality
An innovation brings something new into the world, something that would not have existed in absence to innovation. And it follows a simple process. An innovator, recognizing a market opportunity, has an idea that could address customers’ needs. She then engages in a process that brings that idea, which exists subjectively in her head, out into reality.
As a traditional entrepreneur, she would write a business plan and use it to convince investors to financially back her venture. The funds would pay for rental space, equipment and hiring the talent needed to build and launch the innovation. The marketplace would then decide its economic viability. Most often start-ups fail, something venture capitalists account for by investing in a portfolio of innovations. For the VC, one gusher compensates for dozens of dry holes. For the innovator, its back to square one.
The internet and dotcom age facilitated a new “experimental” approach to innovation and entrepreneurship. Instead of raising the funds needed to launch a full fledge business up front, innovators instead treated their innovation idea as a “hypothesis” about what customers needed. The process was then to quickly and inexpensively build a prototype of the innovation and get it in front of real users to see if it worked (i.e. to test the validity of the innovation hypothesis). The information gained from the demo then served as valuable input for the next innovative iteration. Only after the innovation proved itself with customers were major start up investments undertaken.
What is different about today’s digital tools and platforms? For those seeking an historic analogy, we can look to desktop publishing.[ii] Prior to Microsoft Word and on-demand printing, publishing was big business requiring complex multi-divisional business enterprises. Desktop publishing, and then internet publishing, erased the entry barriers to the media industry. Today the tools are so simple and cheap that adolescent bloggers and YouTubers, working from their bedrooms, can command audiences that once only the major networks could reach.
Similarly, today’s digital tech and platforms are driving down costs and speeding up the innovation process. But importantly they are also facilitating, not just online businesses, but actual manufacturing concerns. The e-commerce site Etsy, for example, offer tens of thousands 3D printed products for sale from thousands small scale manufacturers around the world. And while most manufacturers are small scale operating through sites like Etsy or Grommet, mammoths like Google and Microsoft have also adopted the tech.[iii]
The power of these new digital technologies comes from the easy with which it can serve as a bridge between the subjective world of an innovator’s imagination and the expensive world of cold, hard objective reality. The tech allows innovators to almost costlessly invite the objective world into the digital realm where it can be infinitely molded and modified. And then, just as easily, it allows the virtual world to manifest whole cloth back in the objective reality. These are the ins and outs of the digital world.
The Ins and Outs of the Virtual World
To understand the bridging role of digital tech, we have to first distinguish among distinct innovation realms. Innovation begins as an “idea” and that idea initially exists in the subjective experience of its creator. The subjective realm is the realm of imagination, creativity, inventiveness and inspiration. While the subjective realm is the fountain head of innovation, if creative ideas stay in someone’s head no innovation takes place. We call people with fanciful ideas “dreamers” not innovators. For innovation to occur the idea has to manifest in the real world which we can call the realm of objective reality. Once manifest, the innovation interacts with objective world of customers, competitors and the marketplace.
The power of new digital technologies is that they allow us to bridge these realms by creating a new realm, a third place colloquially known as the virtual world. As illustrated below, the virtual realm exists between the subjective and objective realms and allows innovators to inexpensively exercise an expanded level of malleability on the world. Through digital technologies, innovators can “import” the objective world into the virtual realm where it can be easily and costlessly manipulated and transformed. The technologies also make it easy to export virtual objects back out into the real objective world.
While this “in and out” is powerful, the technology also allows innovators to invite in the subjective consciousness of people into the virtual world as well as export the virtual world back out onto objective reality.
The figure above illustrates these processes. The left side of the figure shows how the physical objective world can move in and out of the virtual. Using simple photogrammetry software, innovators can easily capture physical objects and convert them into virtual 3-dimensional files. Doing so requires little more than taking a series of photos with a smart phone and uploading them to a rendering software program. Our undergraduate students do this with no preparation other than a 13-minute online tutorial video. Once captured, an object can be easily manipulated using computer aided design (CAD). Again, our students do this using a free online platform called Tinkercad[iv], but even a professional application like AutoDesk360 Fusion[v] can be learned in a few days. Once in the virtual realm, individuals can tinker and continuously modifying their virtual object at zero cost until they come up with a design that perfectly aligns with their innovative vision.
Bringing the object back out into the real world is just as easy. The modified object file can be sent to a 3D-printer to fabricate the object in the real world. Then, with product in hand, the innovator can engage with customers and see if their innovation produces the intended benefit and response. What they learn can be taken back into the virtual world for the next iteration in the innovation cycle.
The right side of the figure, in contrast, illustrates how the subjective world can be moved in and out of the virtual. While photogrammetry allows an object to be imported from its surrounding environment, the rise of cheap 360-degree video cameras allow innovators to import the surroundings as well. The cameras capture entire spaces immersively and, like individual objects, can be infinitely and costlessly modified in the virtual realm. A decade ago, the only way we subjects could interact with the virtual world was through a computer screen, but augmented and virtual reality is changing that.
Augmented Reality (AR) tech can spread the virtual world on top of the real objective world as a transparent information-rich overlay. The AR virtual realm tech creates a diaphanous bridge between the objective world and the subjective experience of the user. Commercial applications are proliferating. The Ikea Place app allows customers to overlay a virtual sofa in their living room before ordering, while Gatwick Airport helps travelers navigate their terminals through AR maps. Cosmetic company Sephora permits customers to digitally put on cheek, eye, and lip makeup before buying, while Cleveland Clinic uses AR to guide medical students though dissections.
Instead of bringing the virtual realm out into the objective world, Virtual Reality (VR) tech allows innovators to invite subjects directly into a virtual world. Entire immersive spaces can be created and filled with replicas of the real world or even entirely fanciful dreamscapes. Architectural firms are already using VR to allow customers to interact with potential store designs, office spaces or medical operating theaters, to verify their efficacy before a dime is spent on expensive construction costs. And game designers are using it to create realms in which the very laws and constraints of the objective real world are defied. In Polyarc’s VR game “Moss” you enter an immersive storybook world of magic where you become a mouse on a quest to save family from a fire-breathing snake.
While many AR and VR applications are built by well funding media companies, the technology behind them is becoming increasingly cheap and accessible. Our students routinely make AR applications and use 360-degree video cameras to capture and replicate immersive VR environments.
The Rise of Desktop Production
The virtual bridging capabilities of digital tech not only lowers the cost of present innovation, it opens up yet unforeseen universes of innovation. None of this is rocket science. As I said, my undergrads do this every semester learning these tools in a matter of weeks. And these youngsters are not engineers, computer scientists or technicians. Instead they are studying to be teachers, sustainability professionals, social justice advocates, accountants and managers. Their successes show that the barriers to innovation have collapsed like the walls of Jericho. Today’s undergraduate college students have access to production and design tools that were once the exclusive domain of the Fortune 500.
All of these changes heralds the rise of desktop production. But, while desktop production is an accurate description, the term does a disservice to the potential of these technologies. Traditional manufacturing mass produces items within the limits of traditional mass production methods. As we have shown, desktop production is not constrained in the same way. And we are just at the beginning. Desktop publishing took well over a decade to upend the media, publishing and broadcast worlds. But it was inevitable.
