Blog for the Strategic Innovation MBA Course at Vanderbilt University
In 2001, Professor Palacios co-founded Lumni Inc., which structures and manages innovative investment vehicles for financing education in which students agree to pay a percentage of their future income in exchange for financing of their education costs. Professor Palacios spoke to our Project Pyramid class and I was impressed with how he overcame the negative associations tied to profiting from the poor and ultimately proved that Lumni is sustainable and beneficial for all stakeholders.
Kiva - a non-profit micro-lending organization. I am very impressed by how the organization has developed into a large vehicle for micro loans in various developing countries throughout the world. I think the most critical barrier to starting this type of an organization was getting access to the locals and then structuring contracts that are simple enough for locals to understand and yet sophisticated enough for foreign (mostly western) investors to accept. Continued on-the-ground support must be quite the task in this type of an organization. To date Kiva has funded more than 262 million USD in loans. (Founded in 2005)
mint.com - it had to overcome people's fear of financial fraud and security concerns with giving one site your information for multiple / all of your finance accounts. Positively, though, it has made managing money easier than ever!
One that comes to mind is the e-reader. Speaking broadly to include tablets, it seems to have overcome a society constraint that used to carry a lot of nostalgia for traditional newspapers, books, and magazines.
Another that comes to mind is GPS enabled cellphones. While the navigation benefit is a clear incremental improvement over the standalone GPS device, I think the fact that people use the GPS to communicate their locations via Facebook and Foursquare is unique because it proves that it has overcome the societal barrier that "big brother is watching" and people can always know where you are...
Better World Books: The company sells used books, you can save up to 90% of the regular price. To date, they have raised millions of dollars for literacy, saved millions of books from landfills, created jobs for hundreds of people, and provided books to millions of readers worldwide.
The Segway - I never thought this idea would catch on and that people would adjust their driv--...oh they haven't?I'm still thinking then I guess.
Distance learning for higher education. It started out with mixed reviews, many people thinking that it did not provide the same experience and quality as sitting in a physical classroom. The biggest challenge was having access to sufficient high speed internet and removing the stereotype of a 2nd class way to learn. Today with the improvements in internet and top notch schools (i.e. Harvard and Stanford) providing this service, distance education has become a mainstream success.
The e-commerce explosion - I think our grandparents generation would be shocked that people are actually putting credit card information on something thats seemingly as unsafe as the Internet. The most critical barrier overcome was the fierce need to protect financial information (think burying money in your yard during the Depression. Or now, if youre Ravi).
I guess I'll go with the obvious answer and say Facebook. In an of itself, the site was innovative in so many ways because it allowed friends/acquaintances/people you don't really know to connect with you and have access to a high level overview of your life. More than that, however, I think it changed the way that we communicate and more importantly, what we communicate about. There used to be a silent barrier around people's lives — they didn't tell you exactly where they were all the time, they didn't show you pictures of every time they went out to a bar, and they didn't tell you what time they woke up and went to bed. Now they do. And they tell everybody they've ever met — and then some. For better or worse, Facebook has undoubtedly changed the way we communicate forever.
Something that was partly commented on already: The digitalization of everything: you can have your wallet, your plain/train ticket, your emails, skype, dropbox - basically everything - on your smartphone. This makes people incredibly flexible. I cannot imagine a world without my iphone anymore :) I guess the biggest concern here was data security. It probably still works out because people tend to trust in exchange for such a high level of convenience. Another general idea that changed the way we interact with and the way we support countries from the third world during the past centuries is the belief that instead of just donnating money it is way more sustainable and helpful to foster enterpreneurship in those countries (help them so they are able to help themselves). It is probably difficult for many of these project teams to try to sustainably change the society. They might face the challenge of motivating all people who might benefit from starting their own business to actually do it. Also, it might be tough to find easily implementable business ideas that will ensure a steady inflow of income and thus keep people motivated to pursue the idea.
Social Media in general is a rather obvious example (as Colin mentioned). Upon the introduction of many of these types of interactivity, people were skeptical of shifting the way that they communicated with their friends and did not universally acknowledge that these mediums provided utility. Further, there were serious questions about the privacy issues surrounding this type of communication. These constraints were significant, but as with any large scale adoption, were diminished as adoption grew.
My friend Kunal Bahl, now CEO of snapdeal.com which is similar to Groupon, donated several water-pumps to its employees who did not have clean water to drink in their village. Although the barrier was primarily political, everyone came together to execute the idea once the finances were covered by the company. So much so, the village, where the employees resided, decided to name itself after the company! Such innovations go a long way in effecting change in society.
The introduction of Skype completely changed how friends and family communicate, whether it be across the street or across the globe. This innovation bridged the communication gap and allowed for personal interaction that could not be achieved via email or even telephone (which, of course, is quite expensive when communicating overseas). Along the same lines, Xbox Live is an innovation that transformed gaming from a solo activity into social event. It not only produced an outlet for communication for the niche market of gaming fanatics, but also brought gaming to the mainstream by allowing friends and family to connect outside of the living room.
The slow digitization of government is removing the need for society to interact with government employees and simultaneously save time. I HATE going to any government agency and can now avoid this quit often by conducting this business online. E.G. Renewing vehicle registration, etc. I don't like the US government any more now but at least we don't have to interact with disgruntled employees as often.
Text messaging! When I was in undergrad, it really exploded in popularity. Now, I know high school kids that use over 10,000 messages a month. None of the younger generation communicate traditionally via the phone. The biggest barriers were the costs and the phones. I remember running up a bunch of charges since they used to cost $0.10 a pop. Then the phones were not that easy to use. Now that we have phones with keyboards and touchscreens, texting has really taken off.
ITunes ... now if I don't want to purchase the whole Snoop album but still want to purchase the single, "Drop It Like it's Hot" for which Bree Shapiro produced the live premiere, I can.
I'm impressed by Google docs. I think it has changed the way people can interract in group projects for work and school...I remember in my first job always having the confusion of version control for shared documents and now that problem is alleviated.
Someone mentioned e commerce, but I'll take a slight twist and go with PayPal. The constraint that e-businesses had to overcome, especially individual entrepreneurs, was how to give and receive payment easily and PayPal did that.
Adam Albright's genius new business called RentStuff.com (http://www.rentstuff.com) Adam's business provides a platform for sharing goods between people or for businesses to reach more customers. I recently watched a TEDTalk about a shift in our relationship with 'the stuff' in our lives and a movement towards people sharing more because of a value shift between us an our things. Lisa Gansky's work calls it living in 'the mesh'. People are connected with many more people and web/mobile technologies are accelerating this change in society. (http://www.ted.com/talks/lisa_gansky_the_future_of_business_is_the_mesh.html) I think Adam's business has hit on a very unique concept in an evolving society. We'll say we knew him when! Congrats Adam & Team!PS. #TwitterIsAmazing
I love the AADHAAR project in India. The goal of the program is to assign every person in the country an ID card and a 12-digit ID number (kind of like a Social Security number). The numbers are stored in a centralized database, and are linked to basic demographic and biometric information (digital photograph, scanned fingerprints and eye scan). Teams are traveling around the country to villages and getting people registered and really making an effort to enroll as many people as possible.This is a hugely ambitious project for a large, developing country with a population of 1 billion people. However, having a uniform ID system allows for a lot of social stability that we take for granted - for example, preventing voter fraud, allowing for verifiable financial transactions, and allowing people to move around the country freely without needing to bring multiple forms of identity documentation at all times.
Skype. This social innovation has greatly improved access to face-to-face communication at a very low cost, simply the cost of internet access. I’ll never forget working at a start-up company that was looking to expand geographically and as a recruiter the ability to interview candidates from various states without incurring the significant cost of providing flights and hotels to candidates. It has also been incredibly helpful when attending school in Nashville and when travelling abroad to stay connected to friends and family. Critical barriers are individuals feeling that there could be a security or privacy breeches depending on the type of confidential conversations. Also, awareness was a critical barrier. Like any new technology it requires individuals to know that the tool exists. Another barrier is that even if individuals know that Skype exists, understanding how it works, and how easy it is to use without trial can be a barrier.
Obviously, social medial, cloud services, and other internet based applications are great social innovations, and all of them deserves to be named. As most of you have mentioned them before, I would like to talk about the android platform and qualcomm's chipset, which I believe would challenge the dominant position held by Microsoft and Intel for decades.Unlike iOS, android platform is a real open source platform, which means all third parties could development their own versions of platforms and apps without the intervention from google. The market share of android platform nearly doubles in last year, and it surpass iOS, RIMM, and others smartphone platform. It still has the momentum to grow.Qualcomm's chipset is a perfect complement to Android platform. Compared to intel's chipset, Qualcomm's is more suitable for the mobile (cloud services) application. Actually, since majority of the pc user use the pc for simple functions such as editing, surfing internet, music/video, intel's chip set is an overkill for most of the users. Qualcomm lower the performance of its chipset, but maintain the fundamental supply for everyday apps. In the meantime, it manage to reduce the costs as well as lower the power consumption.To conclude, android + qualcomm bring phone/tablets users to an new era which might significant influence the ecosystem of wintel alliance. I expect to see its battle with Apple's ecosystem as well.
Netflix and the other instant video/gaming sites that have been developed have impressed me most. These advances completely changed the way people buy and rent movies. Blockbuster was caught completely unaware by the shift, and is now trying to catch up.The biggest barrer to adoption was sufficient internet speeds to allow for convenient use of the service. Once broadband wired/wireless became widely available and adopted, there were few barriers to adoption. This story is similar to the kodak/sony digital camera story.
I'd like to contribute a negative one: the innovation in financial derivatives. In the past 10 years,they were extremely developed especially for speculative purposes and then damaged the world economy massively. It is interesting that those complex instruments are packaged so well that people without any knowledge on those high risk tools would like to invest most of their money to them. From this point of view, IBs are really good at using people's greedy nature to overcome their knowledge constraints.
In my opinion the family of technologies based on VoIP (although not that recent itself) and communication protocols that enable delivery of voice and multimedia sessions over IP networks is not only a big technological but social innovation as well. The advances in the entire ecosystem have made it so easy to stay connected to your friends and family regardless of which region or timezone you are in (something that I am personally thankful for). And with newer and even better technologies like Telepresence coming to the fore, we can hope to see reduction in travel spend, carbon footprint and environmental impact with improvements in employee productivity and work/life balance.
I was originally going to say something like Colin said about social media opening up access to personal information, but I think something like Google Docs and DropBox are changing the ways people share information in drastically important ways. Not only do we share information more easily now but we collaborate more easily and without the barriers of distance or the need for face-to-face meetings. Look at what happens daily in this school - we sync common documents and work together even when two team members are in Asia and two are in Nashville. Classmates skype with their spouses or families. To say that knowledge sharing has completely exploded would be a gross understatement. It is now the standard by which people interact.
I agree with Angad, videoconferencing systems like Cisco Telepresence are amazing innovations that had to overcome some societal constraints for adoption. Specifically, they had to overcome the old-school belief that business deals are best handled in-person and closed with a handshake. AT&T uses the systems a lot (although mostly for internal communication) and after a few times of using them, you really forget that you are in a different city than the people you are talking to.
Research in genetics is for me another important innovation. Thanks to this we are now able to produce more food, and at some point we willl be able to cure many diseases.
The most critical barrier thar genetics have overcome in the acricultural sector is the acceptance of modified genetic food. In europe regulztions are very strong since we still have not been able to check the long term effects of consuming genetivally modified food. A constraint that genetics will have to overcome in the future will most probably be all the ethical issues involved when playing with human genes.
I agree with Hannah that texting has overcome societal constraints. A few years ago texting was looked upon as taking the easy way out and not having to talk to someone face to face or a way to avoid awkward conversations. With the innovation of touch screen and it becoming more socially acceptable to have entire conversations through text message, this was a great societal innovation.
I have to agree with all of the previous comments about facebook and social media in general. Having just attended my 10-year high scool reunion, I can say that this has dramatically changed the way that we connect with people from our past. Prior to this type of communication, 10-year reunions might have been the first time people from high school reconnected, however, I have been connected with most of my class for years now. I agree with Evan that the privacy issues have been a huge constraint to social media and is still something that these companies are fighting to overcome.
Following on the digital aspects of social innovation, I think the idea of the workplace is in the midst of a transition because of the ubiquity of technology. People and corporations are starting to really embrace the notion that going to work doesn’t necessarily mean driving to an office and sitting in a chair all day. This is still being challenged by those companies/supervisors/co-workers who don’t understand this model and, as expected, there are a few who abuse the freedom. It’s not uncommon to know someone who “works” at a coffee shop, feels more creative, has a better home life because of the flexibility and saves the company money on real estate, but still functions as a high performing employee.
One thing that comes to mind for me is increased usage of reusable shopping bags. Every store now has reusable shopping bags for sale and many even give shoppers discounts if they use reusable shopping bags. I worked in a grocery store in high school and it was weird back then to see people bring their own bags. Now it’s very commonplace. I think there were two major barriers: laziness and awareness of environment impact. It takes effort to bring your own bags with you to the store and most people didn’t think about how much trash plastic bags generate. Stores realized that they saved money by not using as many plastic bags and so they started giving discounts as a way of rewarding shoppers. I think this combined with increased desire to be eco-friendly has led to increased reusable bag usage.
Apps store for Apple is one of the innovation that impresses me the most. Through Apps store, the software engineers can sell their products to customers more easily. On the other hand, the customer can buy the apps with cheaper price.
Social networking sites were the first things that came to mind. Youtube is another. Both allowed individuals to express themselves to the world and disregard the notion of individual privacy that so many people freak out about (yes there are privacy settings on fb but it is a way to follow individuals in real time). Barriers included regulations with regards to privacy.
Hulu is an interesting innovation (which I love! Initially, societal contraints were tied to how TV viewing has traditional taken place. People were accustomed to watching TV...well, on TV. Hulu and other online TV sites allow viwers to choose when and where they watch their programming and offers a mobility option. Overcoming the societal constraint was made easier by our growing attachement to laptops, iPads, etc. This is an example of adaption being driven by another innovation or trend.
The increased focus on "green" building. The most difficult barrier to overcome has been convincing builders that they need to do more to make their homes "green", as the primary material used, lumber, is already a renewable resource. Still, more and more consumers are demanding environmentally friendly products, as well as more energy efficient appliances, windows, insulation, etc.
The development of motion control gaming systems... starting with the Wii, but continuing with Xbox Kinect, Sony EyeToy, etc... is changing the way people play games locally. Now families (including previously reluctant moms) can join in on the fun in ways that standard controllers on a couch could never do.
The Ipod was a great innovation but it brought a societal constraint. People was used to have a device to play the music and then buy the music in a separate device. The fact that there was not such a format brought concerns about how to buy? what happened if the capacity wasn't enough etc...
The first thing that came to my mind when I read this post was the effect of social networks such as Facebook, MySpace, Twitter, etc., in society. Facebook for example has revolutionized the social network world by connecting people from all over and sharing all types of useful and useless information among users. It’s incredible the growth that these social networks have had for the past 10 years, not only in young generations, but also has reached older ones which have had to learn almost from scratch how to use this type of technology. The main constrain that these networks have is the privacy matter. There have been all kind of privacy issues and sues regarding privacy reaches and defamatory information, reason why networks progressively come with different features to offer more protection to users.
DVR. Being able to bypass commericals and tape the shows you want and watch them at your convenience, allows us to select shows to watch based on preference rather than timing. The biggest barrier was teaching people and showing them to use the innovation (something Tivo didn't do well in the beginning.
For me, the biggest change I have seen in people is how much people use online banking. I now use chase's app where you take pictures of your check to deposit it. 10 years ago, people were hugely uncomfortable with having their banking information online. Now you can submit checks using your phone. They were able to get over people's fear of lack of information safety.
I find very interesting buying on line as a social innovation. I think at the beginning it was very difficult to make people trust in the system where all their banking information could be used by somebpdy else. The fact of not having a physical document with a signature or many times don´t even know who you are dealing with should have make it difficult to implement. Even nowadays I know people that are reluctant of doing e-commerce.