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Olson’s Observations

Technology. Innovation. Science. VC. Media. :: by Eric Olson

Archive for the ‘Innovation’ Category

Web Innovation: Have we seen the best or is it still to come?

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More and more posts about the web I come across seem to lament over the state of the web these days. Specifically these posts suggest that we aren’t trying hard enough to innovate. Some also suggest that we really aren’t innovating on the web anymore, that we’re just creating small iterations on what already exists. In fact Mark Cuban said as much in a post the other day:

Personally, I think Web 2.0 already is tired. When social networking or Twittering applications that are nice to have, but not a need to have, are the best we can do. We ain’t doing much. Lets get real. As much fun as Twittering can be, shouldn’t we all be able to agree that if its the latest and greatest application, the Internet has Jumped the Shark ?

When I first read that section of Cuban’s post I was floored. Then I started to think about it and wondered if he may be on to something. I started to agree with him. There are bigger problems to solve with technology. Why are we spending so much time, money, energy and intelligence on things like Twitter? Do services like Twitter really matter?

After thinking on that for a bit I came to realize that we may simply be in an innovation valley right now. If you were to look at innovation over time you would see that bursts of innovation hit followed by a lull and then another burst. Innovation is cyclical in the way that evolution is. Bursts followed by relatively long lulls, etc., etc.

So maybe the web hasn’t “Jumped the Shark.” Maybe we haven’t reached the limits of what the web can do. Perhaps we’re just in a valley, in the midst of a lull which will head into another burst of innovation.

Looking at things another way I also realized that innovations like Twitter could be the way the web, and computers in general, we meant to evolve from the very beginning. After all in the early 1960s, Robert Fano, at the time MIT’s Ford Professor of Engineering, organized Project MAC at MIT to demonstrate the feasibility of “general-purpose, independent, on-line use of computers by a large number of people” (cite: MIT’s Technology Review Magazine - July/Aug 2008 - p.96).

Fano organized the project because he believed that the power of computers didn’t necessarily lie in their computational power, he believed the power of computers could be found in their ability to connect people and allow for collaboration and the sharing of information. Aren’t these same high level goals that services like Twitter carry forward? I’d say so.

While Twitter may not be a technological marvel it is furthering how we communicate and that is really what computers and the web do best.

Are we in a lull? Perhaps. Are we simply taking the next steps toward better electronic communication? Sure. So, perhaps the future of the web isn’t as bleak as people like Cuban suggest. Of course only time will tell.

Side note: What is disturbing is the lack (and continual cutting) of spending on science here in the United States. Without more research funding we will fall behind and could see our society begin to decline (as many other societies in history have when they promote decadence and push furthering science and learning aside). We need to get money to the people who are working on the breakthroughs that really change the world.

Written by Eric Olson

July 11th, 2008 at 6:03 pm

Posted in Innovation, Web

Car Powered By Compressed Air In Development

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Air CarYes, you read right. There is a car being developed that runs on compressed air (called the Mini-CAT or City Cat). I almost didn’t believe it when I first saw it but it’s true. The engine was developed by a former F1 engineer and Tata Motors, a large car company based in India, has decided to use the technology in a new vehicle.

I know what you’re thinking and the answer is that this car can go up to 200km (125 miles) on one tank of air and can reach speeds of up to 110kph (about 70mph) with a fill-up cost set at around $3 (i.e. $3 gets you 125 miles of travel). Not too bad eh? (Woah, just slipped into a Canadian feel there…). “Refuelings” only take a few minutes as well which is no more time than it takes to fill a car with gasoline.

While the car is a zero emissions vehicle it is of course not 100% zero emissions. The air compressors that fill the tank run on electricity which is generated via a number of methods including coal and nuclear and there is a carbon footprint associated with actually manufacturing the vehicle.

However, I figure that the footprint of this car will be far less than hybrids, plug-in hybrids and, of course, gasoline powered cars (ethanol is also a joke… while better than gas from am emissions stand point it has so many other draw backs like its inefficient use of farmland). I haven’t done the research there so if that is off base please let me know in the comments.

It’s great to see interesting innovation coming about by applying old principles to new problems. I am a big fan of the air car and I would probably buy one if they were available in the U.S. That said, the design isn’t too, how should I put this, sexy and the car is probably not the safest one to drive around in. It’s only about $7,000 though!

To learn more about the car and hear from the designer please check out this video over at the BBC.

Written by Eric Olson

January 9th, 2008 at 12:00 pm

Posted in Environment, Innovation

Amazon’s Kindle: Looking Forward or Backward?

with 5 comments

Amazon Kindle

Update: John makes a good point in the comments about the closed system the Kindle plays in. I should have mentioned that in the post as it is a serious drawback. My hope is that Amazon eventually realizes that and, with their considerable power in the book sales arena, pushes book publishers into freeing things up a bit more. They will also hopefully free up the device so I can read other e-books I have in PDF form or otherwise.

Original Post:

The response to Amazon’s Kindle has been overwhelming and not very surprising. As soon as I saw the device I knew the tech bloggers out there would rip it to shreds. There were a few points of contention that one could easily see would top the list.

1. Blogs come with a monthly cost on the kindle.

Clearly this is due to the fact that the kindle runs on an EVDO network and it costs money to send data through that network. However, I think the online media piece of the Kindle was something that was added on later (at least I hope it was since there were some clear mistakes in the execution of that idea) and that the device is really meant for reading books which it clearly does well. In fact, Bezos made a point of saying the Kindle was a device for reading books.

2. The form factor and UI aren’t exactly pleasing.

Just look at the device. It is clearly evident that no designer at, say, apple had their hands on this one. All in all I don’t think it is a bad first shot though. It can only get better right?

3. It’s just another device to lug around.

A lot of folks see the future of content distribution moving to devices like the Blackberry and the iPhone and I can see that as well. I mean, if I can carry one small device with everything on it I want then I will be a happy man.

However, that line of thinking doesn’t work when it comes to books. When I sit down to read a book I want to be comfortable, feel something of substance in my hand and not have to strain my eyes. I can’t even imagine reading a book on my Blackberry. I do read the news on my Curve a lot and even that strains the eyes. The Kindle, however, addresses all of those issues.

Also, I tend to carry a book (or two) with me all the time to read on the train, while I am waiting for something and to read during my constant travel. That said, carrying the lighter Kindle with multiple books loaded on it (and the ability for me to buy a new book anytime anywhere) is perfect for me. I look at it as a huge space and weight saver as opposed to another gadget to carry around.

4. The price is a little steep.

I would have to agree on that. At $399 it is pretty close to being too rich for my blood. I am thinking about waiting a little bit to see if a price drop occurs after the holidays. I don’t know though. I really want one of these suckers (yeah, I said it). Amazon - think you can spare one for this blogger? (It’s worth a shot.)

The Real Deal

Honestly, it seems as if this is just another case of the echo chamber jumping on a product that may not fit our/their thoughts for the future but that a lot of people would actually use. I still think the future that is discussed in the echo chamber will come to light but it is still a ways away.

iPhones and Blackberrys are not nearly at the point where I, or anyone else, could read a book on them and I am not sure they will ever be. Why? Well, we want those devices to be small and, when people want to read books, they want a large screen and something they can hold on to without contorting their hands as they slide into their chair for a long read. They also want something that has a screen that emulates paper/print, not a blacklight screen that causes eye fatigue.

The Kindle is a great device that still gives the user the feeling of reading a regular book without the hassle of carrying a bunch of books around and without having to wait for books to get shipped to them.

I really like this device a lot. I hope that in future evolutions the design and UI improve but the basic concepts and features seem to be spot on. My favorite things are:

  • The free EVDO based downloading of books, newspapers, etc. (The media isn’t free but you don’t have to pay for a data plan.)
  • The auto-saving of your place in each book.
  • The backup on the Amazon site of all your content.
  • The size.
  • The E-Ink screen that looks just like a printed piece of paper.
  • The super long battery life.
  • The ability to search the book or piece of content for certain phrases.
  • The ability to add notes to the books and to “dog ear” pages.

I have to hand it to Amazon on this one. This is certainly a device that will make my life easier and my reading more enjoyable while also making all of my content easily accessible anywhere. Let’s just hope they can lower the price and make the thing look a little nicer while improving the UI a bit.

I have to agree with Joseph Weisenthal when he says:

Although Amazon’s been working on this for awhile, this is very much a first-generation product. It’s not going to revolutionize the industry overnight, though it sounds like Amazon is going to take this business seriously and continue to invest in it. It seems safe to guess that in a couple years, the top-of-the-line Kindle will be a much-improved product. The concept is definitely sound [emphasis added by me]. Bezos’ speech had most of the audience pretty enthusiastic about the device—the problem is the gap between the description and the device itself. With some improvements to the display and a more intuitive navigation system, it could become an attractive product, even at the price.

Well said. Now, all I need Amazon to do is let me port my current library of books, both read and unread, into the Kindle and I would be sold on buying one of the first generation devices.

I have about 20 books in my backlog now sitting at home on a shelf that I would love to port into a Kindle. I am not sure how Amazon would determine that I bought them though. Perhaps they could look through my purchase log at,, etc. and let me port anything in those lists? Any thoughts Amazon? Is this possible or is it in the works? Paying for books twice would definitely be a bummer.

Written by Eric Olson

November 20th, 2007 at 3:50 pm

Valuing Innovation: Is a new stock exchange in our future?

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My friend Dave posted an interesting response to Paul Graham’s latest essay on the future of web startups the other day. While the whole post was very thought provoking the conclusion toward the end of the post really hit me. Here’s the conclusion:

so if you could accurately value the business at any time, and you can get an exit at any time, and transaction cost efficiency goes down… then you don’t have to go to a VC for capital. once you start having a liquid, transparent, efficient market, the cost of capital becomes very cheap. and you could just start BORROWING money instead of SELLING equity to raise capital. and when you wanted to sell, you wouldn’t need any expensive VCs or investment bankers, you’d just sell to Mr. Market at whatever rate he’s willing to pay. lenders could accurately value businesses, bet on a rate of success/return, and quickly undercut the cost of capital for VCs.

I had to leave Dave’s signature use of font size, bold and font color in there for effect.

Anyhow, my first thought was simply that we have a market. The stock market is just such an exchange although you still need investment bankers, VCs and the like to have a shot at playing. So it looks like Dave is really calling for a lightweight stock exchange.

Perhaps this new exchange could take the nasdaq one step further and be a completely lightweight web based service. Of course metrics are the key to this new idea.

Metrics are an important part of just about anything and a new exchange, to be efficient, transparent and liquid would need a good set of metrics for investors and companies to use in valuing their businesses.

I am going to start thinking more on this (putting my finance degree back into use baby!) because I think it is an interesting idea and one that may be possible to execute. Most likely the debt markets for entrepreneurs would be the first thing to start improving with a market that would follow. Are there any bankers out there? How could you see a debt market for startups and metrics around that market shaping up?

Of course the big issue is that start-ups, and innovation in general, is very risky and that is why bankers are adverse to lending to those types of companies. At least with a shipping company the business is easy to understand and the bank can take leins against all of the trucks and other assets which can then be used to get their money back in a default situation.

With web startups in particular what hard assets are there for the bank to take a lein on? The technology/IP is really all there is and that may not have much residual value after a default.

Either way a new market for startups is very compelling and I am convinced there might be a way to make it happen. I am just not sure how right now.

Written by Eric Olson

October 9th, 2007 at 9:49 am

Posted in Business, Innovation, VC

Wrap up: The New Rules of Tech VC, the Fiction of 20% and VC Innovation

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There was a lot of great discussion today about VC so I thought a quick wrap-up was in order. Normally I’d write a full post but the three posts I will briefly touch on below did such a good job I will simply suggest you read them. Here it goes:

The New Rules of Tech VC - Alex Iskold on Read/Write Web

Alex put together a post on RWW today that looks at VC both past an present. He takes readers through the old model, why it worked and why it is changing. He then looks at the current state of VC and to the future of what things may come down the road. Here’s a snippet from the post about the future of tech VC:

Now, putting it all together, leads us to conclude that large venture money is going to migrate away from technology. Specifically, this is what is likely to happen:

  • We will see more smaller size funds and they will be successful
  • Large firms are going to focus on series B deals and will have to pay premium for the same equity
  • Big firms will focus less on tech, shifting to alternative energy, healthcare, etc.

It’s a great article even for those who know a lot about the VC world.

The Fiction of 20% - Fred Wilson on A VC

Fred takes readers through why VCs saying that they have to own 20%, 25%, etc. of a company to make a venture return is simply hogwash. Good stuff from one of the more innovative VCs around.

The Changing Landscape of Early-Stage Investing - Fraser Kelton on Disruptive Thoughts

Fraser has a nice high level wrap-up of innovation in the early stage VC space and adds some of his insight which is always valuable. I am glad Fraser is moving to NYC in January for Adaptive Blue. We’ll be able to finally take our virtual conversations about early stage VC and entrepreneurship offline.

Written by Eric Olson

October 4th, 2007 at 7:04 pm

Posted in Innovation, Technology, VC, Web

Solving R&D Puzzles from the Outside: A Lesson from Open Source Software

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I am regular reader of the Harvard Business Review magazine. In fact, it is the one magazine that I read cover to cover each month. If you don’t currently read it and you’re a business/management/strategy junkie like me you need to start. End of plug…

The May 2007 issue had a bunch of great stuff in it as expected but one of the smaller articles in the beginning of the magazine (the Forethought section for the HBR readers out there) was particularly intriguing. It focused on how companies could work with outsiders to solve their R&D issues.

The parallel they based the argument on was that of open source software. The open source movement has shown that opening up technical issues to a broad crowd of people can yield top notch solutions so why not apply it to other issues?

The article mentioned a company called InnoCentive based in Andover, Massachusetts that helps companies to “outsource” their R&D issues. InnoCentive posts corporate R&D problems to a group of outsiders who will attempt to solve them and then the solutions are passed onto the companies and InnoCentive pays the problem solvers.

One of the stats mentioned in the article that I found pretty important was this: In 30% of cases problems that could not be solved by experienced corporate researchers were solved by non-employees in the InnoCentive network. This just goes to show that an outside eye (and mind) can really be useful.

In terms of implementing a system for outside help in your business the authors of the article recommend you keep three things in mind:

1. Problems should be broadcast to people in various fields. People in other fields can sometimes apply what they know from their field in an interesting and innovative way to another field.

2. Prizes are necessary but not sufficient. People will do things just to get the satisfaction of solving a tough problem although if they are helping big corporations they will still expect some form of monetary compensation.

3. Insiders are still important. Even if the insiders can’t solve the problem they are still crucial when it comes to figuring out which problems should be brought in front of outsiders and which solutions the outsiders come up with will work best.

So the next time you’re having trouble solving a problem inside your company you should think about taking a page from the open source software book and look to the outside for help.

Written by Eric Olson

June 14th, 2007 at 10:52 am

Posted in Business, Innovation