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In the Capitalist’s Dilemma, Christensen divides innovations into three types: empowering innovations (the transistor, the engine, fiberoptics

This morning, I listened to an interview of Jon Gertner who has published a chronicle of Bell Labs called the Idea Factory. In his book and the interview, Gertner highlighted points about the Bell Labs that relate to Clay Christensen’s recent New York Times editorial, the Capitalist’s Dilemma.

Bell Labs was a house of magic - a place of prodigious invention and innovation. In a single year, Bell scientists and engineers developed the transistor, satellite communication and information theory (the theory that underpins all digital technologies). The advances pioneered by Bell have created 100 years of massive economic growth: the Internet, digital communication, semiconductors for the US.

In May 2010, I bet a good friend of mine that Android would overtake iOS in total devices shipments in 12 months' time. My prediction was completely off the mark. In May 2011, iOS led cumulative shipments by more than 100%: 191M to 95M. It would take another 10 months for Android to equal Apple in March 2011 at about 325M each.

Race to one billion devices

![image](https://res.cloudinary.com/dzawgnnlr/image/upload/q_auto/f_auto/w_auto/">

But Android reached this milestone in a way I didn’t anticipate. I expected a clean division between the high and low ends of the market along OS lines.

There’s a Pixar movie that captures the ethos of Silicon Valley’s entrepreneurship culture which it summarizes this way:

While not everyone can be a great chef, a great chef can come from anywhere

The magic of the valley is that there is no path, no formula, no stencil for how to be successful. There is no university one must attend, no incubator one must join, no technology one must master to be successful. Every entrepreneur has a different route to their successes.

Ariel Diaz wrote an insightful post in PandoDaily yesterday outlining the state of affairs in online education. Ariel touched on the history of education, catalogued the problems of the status quo and pointed to a few innovative initiatives.

Most Edu Innovation is Post-Secondary

Reading the post and reflecting on the startups I’ve seen, I concluded most of the innovation in education has occurred in post-secondary education instead of K-12, despite the fact that the K-12 market is about 50% larger in dollar terms than the post-secondary market.

Peter Senge has been called the most influential business strategists of the century and in my view Senge is the successor of Peter Drucker, the management visionary. Senge published a book in 1990 called The Fifth Discipline which I think every manager, founder and CEO should read.

Great companies transcend their great products. Not defined by one product, these companies adapt, innovate and reinvent. They learn continuously to succeed as their environment changes. Senge’s book teases apart the five essential components to building a learning organization.

The Verge profiled Google Now, Google’s newest search technology which uses “predictive” queries to show users the information they want to see, before users ask.

In a single app, the company has combined its latest technologies: voice search that understands speech like a human brain, knowledge of real-world entities, a (somewhat creepy) understanding of who and where you are, and most of all its expertise at ranking information. Google has taken all of that and turned it into an interesting and sometimes useful feature, but if you look closely you can see that it’s more than just a feature, it’s a beta test for the future.

Over the last six months, I’ve been delving deeply into R, linear regressions and machine learning. Part of the rationale has been to remember some of the concepts I learned in grad school studying signal processing.

But a more important driver has been the need to better understand how to qualify, evaluate and hire data scientists because data science is a massive competitive advantage. And many of the companies I work with are hiring data scientists.

Last week, a close friend, who is a product manager/designer, told me he’s starting a company. He asked me where I thought the biggest opportunity lay given his skills and his passions. He’s incredibly capable and driven, but he hasn’t yet found the right place to apply his energy. My friend is in search of a problem to solve. He’s in the right place. After all:

“The essence of a startup lies in the process of discovering a problem shared by many people and trying to solve it.”.

When I walk into a bank today, I might deposit my cash in exchange for some interest rate. The interest rate is my cut of the profits the bank made on my deposit through their trading and lending activities. The more assets under management, the more money a bank can make on its own account.

Like banks, web companies are in the business of maximizing gigabytes of user data under management.

I met the Electric Imp team in April. I had bumped into one of their engineers at a party and he pinged me a few weeks later to say he was working for a startup and the company was raising. The company came in to the office on a Monday at noon.

Hugo, the founder, Electric Imp demoed their product to me. Ten minutes in, I stopped the pitch meeting, pulled 3 partners from their Monday partner meeting, and issued a term sheet that afternoon. The demo was just that compelling.