About 500 years ago, sailors had no way to precisely determine their position. Once an accurate timepiece was invented and used in 1773, it became possible to accurately shoot the sun and fix their postion.
It isn't just about the idea, it is about a willingness to try again and again...and sometimes it is luck.
Innovation and operational excellence...
It is a difficult time...but business does move in cycles and it will get better. It is the best of times...it is the worst of times...
Why should you listen to an aging .COMmunist like me?
One business completely changed an industry: Travelocity. Travel is the largest eCommerce sector by a factor of 4.
Changed pricing, distribution, users...
We were a profitable dotcomm...Travelocity is a $10 billion company. Taking it public was like an E Ticket ride at Disneyland.
Jones started as a retail travel agent, and rose to be President of Sabre...processed 40% of all reservations in a bunker in Tulsa, OK. Although we were cutting edge, we had lots of old technology.
Travelocity was lipstick on a bulldog, with a a user hostile system underneath the web cool.
The DOPEler effect: the tendency of stupid ideas to seem smarter when they come at you fast.
They didn't lear how to take the personal relationship and turn it into the relationship between the person and the computer. Computer-mediated marketing turned out to be a lot harder than anybody thought.
Technique follows technology. Bell was inventing a hearing aid. Edison was inventing a dictating machine.
When Martin Cooper invented the cellphone he had no idea that there would be 220 million cell phones.
Now wea re getting the technique. Home buyers first search on line...travelers search on line and buy on line. How do we sharpen our technique for operational excellence?
Relentless doubling of bandwidth, power and storage...we used to talk about users, now we talk about customers. And we can never be down...not in software, not in process plants.
We've gone to an intuitive interface.
Technology is wahtever didn't exist when you were born-- Alan Kay
81% of teens use the Internet 24 hours a week. 73% of college kids get their news online.
Today's graduates are tomorrow's employees, and technology is central to them...and to us. We live in a world of speed and convenience.
If you don't like change you're going to like irrelevance even less-- Gen. Eric Shinseki
Technology has caused short circuits so that customers now can talk directly to producers.
Businesses are being re-wired. Customer to manufacturer to dealer to customer.
Classic purchasing process is Changing.
Somewhere out there is a bullet with your name on it, shot by a competitor, unknown and unborn, who will render your business (model) obsolete -- Harvard Business Review
Lots of information sources are becoming user generated.
We have to do all of this, while going green. Juggle, juggle...
How do we deal with this?
Success is about innovation.
There's a difference between invention and innovation. Innovation is fresh thinking that creates value...
Your people probably aren't the three blind mice...some are the Tom Cruise of mice...some are afraid to go for it, because risk taking can be dangerous.
Where does innovation start in a company?
Innovation CAN come from the top, but the best ideas usually come from the bottom.
But you have to look out for the bozone layer-- the middle management layer that stops good ideas from moving upwards. Create a culture of innovation. Innovation is a tiny little flame and it is necessary to nurture the flame.
Innovation is not the Olympics. Innovation is like baseball-- if you fail 70% of the time, you have a .300 batting average.
Success isn't permanent and failure isn't fatal-- Mike Ditka
A/B/C/D testing is necessary for marketing. Be flexible, and you have to measure your results. At travelocity we spent most of our time on bail-out analysis. Average online conversion is 3%.
Fail fast! don't wait for the trainwreck!
Keep tweaking!!
Play to your strength...Amazon is a community of book lovers...auctions didn't work, stores didn't work...but selling used books did.
Keyes said that the real problem is escaping from old ideas.
"Terry didn't get fired."
Everyone needs a coach.
Listen to your customers.
How do we improve?
Ask your customers...
Southwest Airlines benchmarked their industry leading turnaround time...against NASCAR!
There is more than one right answer.
You have to open the door and let the future in.
Travelocity was created inside Sabre, which was inside American Airlines.
There are good things about being inside a big company. There is also a "bad of Big"-- you don't get the expertise of VCs and you have the numbing rules of the big company bureaucracy.
So what to do?
Organizational structure-- Petronius said reorganization leads to disorganization and demoralization in 66 AD.
Separate organizational structure...team culture. Move physically away.
"We found in companies that made good decisions, debate is real"
The travelocity story-- new technologies created new opportunities...
easySabre...to travelocity...we grew like a weed. Microsoft launched expedia...luckily they couldn't.
automated incoming calls, added telephone sales.
the airlines launched Orbitz and Sabre took Travelocity private. Growth is slowing in the travel industry.
We built change into the plan. We rigidly controlled costs, listened to our customers, changed rapidly, and experimented and failed fast.
We had the victory of the Liliputians. Our competitors failed to go online...If you are a little guy there's hope, and if you're a big guy wake up! The internet is like Darwinism on Steroids...you evolve or you are toast.
Future?
Follow trends and measure, measure, measure. That's what created Kayak.com. Consumers are getting smarter. Let's create a metasearch website as a travel service. Kayak is now as big as priceline, but has never advertised.
The #2 search engine is now YouTube!!! It has dumbed down the quality of video we will accept. THe cost of video in your business doesn't have to be great quality. Viral video...
New technologies are replacing older technologies. Look at the number of technologies the iPhone has replaced...and then there's wireless... iNap wakes you up when your train gets to the station...
Technology is moving forward very fast. Technique follows technology. Use innovation to drive operational excellence to drive through the bozone layer and make sure ideas get implemented.
Don't punish, learn. Bring in young people and have "two pizza" teams.
