Tag Archives: Innovation

The Idea Factory: Bell Labs and the Great Age of American Innovation by Jon Gertner

Summary

  1. “This book is about innovation—about how it happens, why it happens, and who makes it happen. It is likewise about why innovation matters, not just to scientists, engineers, and corporate executives but to all of us. That the story is about Bell Labs, and even more specifically about life at the Labs between the late 1930s and the mid-1970s, isn’t a coincidence.” The people helping to make it happen including Mervin Kelly, Jim Fisk, William Shockley, Claude Shannon, John Pierce, and William Baker.

Key Takeaways

  1. Where is the knowledge we have lost in information? —T. S. Eliot, The Rock
  2. Yet understanding the circumstances that led up to that unusual winter of 1947 at Bell Labs, and what happened there in the years afterward, promises a number of insights into how societies progress. With this in mind, one might think of a host of reasons to look back at these old inventions, these forgotten engineers, these lost worlds.
  3. Edison’s genius lay in making new inventions work, or in making existing inventions work better than anyone had thought possible. But how they worked was to Edison less important.
  4. Contrary to its gentle image of later years, created largely through one of the great public relations machines in corporate history, Ma Bell in its first few decades was close to a public menace—a ruthless, rapacious, grasping “Bell Octopus,” as its enemies would describe it to the press. “The Bell Company has had a monopoly more profitable and more controlling—and more generally hated—than any ever given by any patent,” one phone company lawyer admitted.
  5. AT&T’s savior was Theodore Vail, who became its president in 1907, just a few years after Millikan’s friend Frank Jewett joined the company.11 In appearance, Vail seemed almost a caricature of a Gilded Age executive: Rotund and jowly, with a white walrus mustache, round spectacles, and a sweep of silver hair, he carried forth a magisterial confidence. But he had in fact begun his career as a lowly telegraph operator. Thoughtfulness was his primary asset; he could see almost any side of an argument. Also, he could both disarm and outfox his detractors. As Vail began overseeing Bell operations, he saw that the costs of competition were making the phone business far less profitable than it had been—so much so, in fact, that Vail issued a frank corporate report in his first year admitting that the company had amassed an “abnormal indebtedness.” If AT&T were to survive, it had to come up with a more effective strategy against its competition while bolstering its public image.
  6. Vail didn’t do any of this out of altruism. He saw that a possible route to monopoly—or at least a near monopoly, which was what AT&T had always been striving for—could be achieved not through a show of muscle but through an acquiescence to political supervision. Yet his primary argument was an idea. He argued that telephone service had become “necessary to existence.” Moreover, he insisted that the public would be best served by a technologically unified and compatible system—and that it made sense for a single company to be in charge of it. Vail understood that government, or at least many politicians, would argue that phone subscribers must have protections against a monopoly; his company’s expenditures, prices, and profits would thus have to be set by federal and local authorities. As a former political official who years before had modernized the U.S. Post Office to great acclaim, Vail was not hostile toward government. Still, he believed that in return for regulation Ma Bell deserved to find the path cleared for reasonable profits and industry dominance. In Vail’s view, another key to AT&T’s revival was defining it as a technological leader with legions of engineers working unceasingly to improve the system.
  7. The Vail strategy, in short, would measure the company’s progress “in decades instead of years.” Vail also saw it as necessary to merge the idea of technological leadership with a broad civic vision. His publicity department had come up with a slogan that was meant to rally its public image, but Vail himself soon adopted it as the company’s core philosophical principle as well. It was simple enough: “One policy, one system, universal service.” That this was a kind of wishful thinking seemed not to matter.
  8. “Of its output,” Arnold would later say of his group, “inventions are a valuable part, but invention is not to be scheduled nor coerced.” The point of this kind of experimentation was to provide a free environment for “the operation of genius.” His point was that genius would undoubtedly improve the company’s operations just as ordinary engineering could. But genius was not predictable. You had to give it room to assert itself.
  9. From the start, Jewett and Arnold seemed to agree that at West Street there could be an indistinctness about goals. Who could know in advance exactly what practical applications Arnold’s men would devise? Moreover, which of these ideas would ultimately move from the research department into the development department and then mass production at Western Electric? At the same time, they were clear about larger goals. The Bell Labs employees would be investigating anything remotely related to human communications, whether it be conducted through wires or radio or recorded sound or visual images.
  10. The industrial lab showed that the group—especially the interdisciplinary group—was better than the lone scientist or small team. Also, the industrial lab was a challenge to the common assumption that its scientists were being paid to look high and low for good ideas. Men like Kelly and Davisson would soon repeat the notion that there were plenty of good ideas out there, almost too many. Mainly, they were looking for good problems.
  11. Quantum mechanics, as it was beginning to be called, was a science of deep surprises, where theory had largely outpaced the proof of experimentation. Some years later the physicist Richard Feynman would elegantly explain that “it was discovered that things on a small scale behave nothing like things on a large scale.” In the quantum world, for instance, you could no longer say that a particle has a certain location or speed. Nor was it possible, Feynman would point out, “to predict exactly what will happen in any circumstance.”
  12. The Great Depression, as it happened, was a boon for scientific knowledge. Bell Labs had been forced to reduce its employees’ hours, but some of the young staffers, now with extra time on their hands, had signed up for academic courses at Columbia University in uptown Manhattan.
  13. “The [Bell] System,” Danielian pointed out, “constitutes the largest aggregation of capital that has ever been controlled by a single private company at any time in the history of business. It is larger than the Pennsylvania Railroad Company and United States Steel Corporation put together. Its gross revenues of more than one billion dollars a year are surpassed by the incomes of few governments of the world. The System comprises over 200 vassal corporations. Through some 140 companies it controls between 80 and 90 percent of local telephone service and 98 percent of the long-distance telephone wires of the United States.”
  14. The 512A was an example of how, if good problems led to good inventions, then good inventions likewise would lead to other related inventions, and that nothing was too small or incidental to be excepted from improvement. Indeed, the system demanded so much improvement, so much in the way of new products, so much insurance of durability, that new methods had to be created to guarantee there was improvement and durability amid all the novelty.
  15. We usually imagine that invention occurs in a flash, with a eureka moment that leads a lone inventor toward a startling epiphany. In truth, large leaps forward in technology rarely have a precise point of origin. At the start, forces that precede an invention merely begin to align, often imperceptibly, as a group of people and ideas converge, until over the course of months or years (or decades) they gain clarity and momentum and the help of additional ideas and actors. Luck seems to matter, and so does timing, for it tends to be the case that the right answers, the right people, the right place—perhaps all three—require a serendipitous encounter with the right problem. And then—sometimes—a leap. Only in retrospect do such leaps look obvious.
  16. There was something in particular about the way he [William Shockley] solved difficult problems, looking them over and coming up with a method—often an irregular method, solving them backward or from the inside out or by finding a trapdoor that was hidden to everyone else—to arrive at an answer in what seemed a few heartbeats.
  17. By intention, everyone would be in one another’s way. Members of the technical staff would often have both laboratories and small offices—but these might be in different corridors, therefore making it necessary to walk between the two, and all but assuring a chance encounter or two with a colleague during the commute. By the same token, the long corridor for the wing that would house many of the physics researchers was intentionally made to be seven hundred feet in length. It was so long that to look down it from one end was to see the other end disappear at a vanishing point. Traveling its length without encountering a number of acquaintances, problems, diversions, and ideas would be almost impossible. Then again, that was the point. Walking down that impossibly long tiled corridor, a scientist on his way to lunch in the Murray Hill cafeteria was like a magnet rolling past iron filings.
  18. Essentially Kelly was creating interdisciplinary groups—combining chemists, physicists, metallurgists, and engineers; combining theoreticians with experimentalists—to work on new electronic technologies.
  19. If the ingredients in the alloy weren’t pure—if they happened to contain minute traces of carbon, oxygen, or nitrogen, for instance—Permendur would be imperfect. “There was a time not so long ago when a thousandth of a percent or a hundredth of a percent of a foreign body in a chemical mixture was looked upon merely as an incidental inclusion which could have no appreciable effect on the characteristics of the substance,” Frank Jewett, the first president of the Labs, explained. “We have learned in recent years that this is an absolutely erroneous idea.”
  20. For Scaff and Theurer—and, in time, the rest of the solid-state team at Bell Labs—one way to think of these effects was that purity in a semiconductor was necessary. But so was a controlled impurity. Indeed, an almost vanishingly small impurity mixed into silicon, having a net effect of perhaps one rogue atom of boron or phosphorus inserted among five or ten million atoms of a pure semiconductor like silicon, was what could determine whether, and how well, the semiconductor could conduct a current. One way to think of it—a term that was sometimes used at the Labs—was as a functional impurity.
  21. The formal purpose of the new solid-state group was not so much to build something as to understand it. Officially, Shockley’s men were after a basic knowledge of their new materials; only in the back of their minds did a few believe they would soon find something useful for the Bell System.
  22. On November 17, Brattain and an electrochemist in the solid-state group, Robert Gibney, explored whether applying an electrolyte—a solution that conducts electricity—in a particular manner would help cut through the surface states barrier. It did. Shockley would later identify this development as a breakthrough and the beginning of what he called “the magic month.” In time, the events of the following weeks would indeed be viewed by some of the men in terms resembling enchantment—the team’s slow, methodical success effecting the appearance of preordained destiny. For men of science, it was an odd conclusion to draw. Yet Walter Brattain would in time admit he had “a mystical feeling” that what he ultimately discovered had been waiting for him.
  23. Any Bell scientist knew about the spooky and coincidental nature of important inventions. The origins of their entire company—Alexander Bell’s race to the patent office to beat Elisha Gray and become the recognized inventor of the telephone—was the textbook case.
  24. If an idea begat a discovery, and if a discovery begat an invention, then an innovation defined the lengthy and wholesale transformation of an idea into a technological product (or process) meant for widespread practical use. Almost by definition, a single person, or even a single group, could not alone create an innovation. The task was too variegated and involved.
  25. “It is the beginning of a new era in telecommunications and no one can have quite the vision to see how big it is,” Mervin Kelly told an audience of telephone company executives in 1951. Speaking of the transistor, he added that “no one can predict the rate of its impact.” Kelly admitted that he wouldn’t see its full effect before he retired from the Labs, but that “in the time I may live, certainly in 20 years,” it would transform the electronics industry and everyday life in a manner much more dramatic than the vacuum tube. The telecommunications systems of the future would be “more like the biological systems of man’s brain and nervous system.” The tiny transistor had reduced dimensions and power consumption “so far that we are going to get into a new economic area, particularly in switching and local transmission, and other places that we can’t even envision now.” It seemed to be some kind of extended human network he had in mind, hazy and fantastical and technologically sophisticated, one where communications whipped about the globe effortlessly and where everyone was potentially in contact with everyone else.
  26. He could remember, too, that as the tubes became increasingly common—in the phone system, radios, televisions, automobiles, and the like—they had come down to price levels that once seemed impossible. He had long understood that innovation was a matter of economic imperatives. As Jack Morton had said, if you hadn’t sold anything you hadn’t innovated, and without an affordable price you could never sell anything. So Kelly looked at the transistor and saw the past, and the past was tubes. He thereby intuited the future.
  27. “A Mathematical Theory of Communication”—“the magna carta of the information age,” as Scientific American later called it—wasn’t about one particular thing, but rather about general rules and unifying ideas. “He was always searching for deep and fundamental relations,” Shannon’s colleague Brock McMillan explains. And here he had found them. One of his paper’s underlying tenets, Shannon would later say, “is that information can be treated very much like a physical quantity, such as mass or energy.”
  28. One shouldn’t necessarily think of information in terms of meaning. Rather, one might think of it in terms of its ability to resolve uncertainty. Information provided a recipient with something that was not previously known, was not predictable, was not redundant. “We take the essence of information as the irreducible, fundamental underlying uncertainty that is removed by its receipt,” a Bell Labs executive named Bob Lucky explained some years later. If you send a message, you are merely choosing from a range of possible messages. The less the recipient knows about what part of the message comes next, the more information you are sending.
  29. (1) All communications could be thought of in terms of information; (2) all information could be measured in bits; (3) all the measurable bits of information could be thought of, and indeed should be thought of, digitally. This could mean dots or dashes, heads or tails, or the on/off pulses that comprised PCM.
  30. His calculations showed that the information content of a message could not exceed the capacity of the channel through which you were sending it. Much in the same way a pipe could only carry so many gallons of water per second and no more, a transmission channel could only carry so many bits of information at a certain rate and no more. Anything beyond that would reduce the quality of your transmission. The upshot was that by measuring the information capacity of your channel and by measuring the information content of your message you could know how fast, and how well, you could send your message. Engineers could now try to align the two—capacity and information content.
  31. Shannon’s paper contained a claim so surprising that it seemed impossible to many at the time, and yet it would soon be proven true. He showed that any digital message could be sent with virtual perfection, even along the noisiest wire, as long as you included error-correcting codes—essentially extra bits of information, formulated as additional 1s and 0s—with the original message. In his earlier paper on cryptography, Shannon had already shown that by reducing redundancy you could compress a message to transmit its content more efficiently. Now he was also demonstrating something like the opposite: that in some situations you could increase the redundancy of a message to transmit it more accurately.
  32. And yet Kelly would say at one point, “With all the needed emphasis on leadership, organization and teamwork, the individual has remained supreme—of paramount importance. It is in the mind of a single person that creative ideas and concepts are born.” There was an essential truth to this, too—John Bardeen suddenly suggesting to the solid-state group that they should consider working on the hard-to-penetrate surface states on semiconductors, for instance. Or Shockley, mad with envy, sitting in his Chicago hotel room and laying the groundwork for the junction transistor. Or Bill Pfann, who took a nap after lunch and awoke, as if from an edifying dream, with a new method for purifying germanium. Of course, these two philosophies—that individuals as well as groups were necessary for innovation—weren’t mutually exclusive. It was the individual from which all ideas originated, and the group (or the multiple groups) to which the ideas, and eventually the innovation responsibilities, were transferred.
  33. He would acknowledge that building devices like chess-playing machines “might seem a ridiculous waste of time and money. But I think the history of science has shown that valuable consequences often proliferate from simple curiosity.” “He never argued his ideas,” Brock McMillan says of Shannon. “If people didn’t believe in them, he ignored those people.”
  34. In truth, the handoff between the three departments at Bell Labs was often (and intentionally) quite casual. Part of what seemed to make the Labs “a living organism,” Kelly explained, were social and professional exchanges that moved back and forth, in all directions, between the pure researchers on one side and the applied engineers on the other. These were formal talks and informal chats, and they were always encouraged, both as a matter of policy and by the inventive design of the Murray Hill building.
  35. Physical proximity, in Kelly’s view, was everything. People had to be near one another. Phone calls alone wouldn’t do. Kelly had even gone so far as to create “branch laboratories” at Western Electric factories so that Bell Labs scientists could get more closely involved in the transition of their work from development to manufacture.
  36. Bell Labs had the advantage of necessity; its new inventions, as one of Kelly’s deputies, Harald Friis, once said, “always originated because of a definite need.”
  37. To innovate, Kelly would agree, an institute of creative technology required the best people, Shockleys and Shannons, for instance—and it needed a lot of them, so many, as the people at the Labs used to say (borrowing a catchphrase from nuclear physics), that departments could have a “critical mass” to foster explosive ideas.
  38. There was no precise explanation as to why this was such an effective goad, but even for researchers in pursuit of pure scientific understanding rather than new things, it was obvious that their work, if successful, would ultimately be used. Working in an environment of applied science, as one Bell Labs researcher noted years later, “doesn’t destroy a kernel of genius—it focuses the mind.”
  39. An instigator is different from a genius, but just as uncommon. An instigator is different, too, from the most skillful manager, someone able to wrest excellence out of people who might otherwise fall short. Somewhere between Shannon (the genius) and Kelly (the manager), Pierce steered a course for himself at Bell Labs as an instigator. “I tried to get other people to do things, I’m lazy,” Pierce once told an interviewer.
  40. Pierce’s real talent, according to Friis and Pierce himself, was in getting people interested in something that hadn’t really occurred to them before.
  41. Pierce had been correct in some respects about the traveling wave tube’s potential. But as he came to understand, inventions don’t necessarily evolve into the innovations one might at first foresee. Humans all suffered from a terrible habit of shoving new ideas into old paradigms. “Everyone faces the future with their eyes firmly on the past,” Pierce said, “and they don’t see what’s going to happen next.”
  42. A terrestrial signal could be directed toward the orbiting satellite in space; the satellite, much like a mirror, could in turn direct the signal to another part of the globe. Pierce didn’t consider himself the inventor of this idea; it was, he would later say, “in the air.”
  43. Ideas may come to us out of order in point of time,” the first director of the Rockefeller Institute for Medical Research, Simon Flexner, once remarked. “We may discover a detail of the façade before we know too much about the foundation. But in the end all knowledge has its place.”
  44. Why move in this direction? What kind of future did the men envision? One of the more intriguing attributes of the Bell System was that an apparent simplicity—just pick up the phone and dial—hid its increasingly fiendish interior complexity. What also seemed true, and even then looked to be a governing principle of the new information age, was that the more complex the system became in terms of capabilities, speed, and versatility, the simpler and sleeker it appeared. ESS was a case in point.
  45. I liked Fisk very much. But the combination of Fisk, who didn’t know a lot about what was going on in the bowels of the place, and Julius, who knew everything about what was going on in the bowels of the place, was a good combination.”
  46. Colleagues often stood amazed that Baker could recall by name someone he had met only once, twenty or thirty years before. His mind wasn’t merely photographic, though; it worked in some ways like a switching apparatus: He tied everyone he ever met, and every conversation he ever had, into a complex and interrelated narrative of science and technology and society that he constantly updated, with apparent ease.
  47. To Pollak, this was a demonstration not of Bill Baker’s cruelty but of his acumen—in this case to push his deep belief that science rests on a foundation of inquiry rather than certainty. Also, it revealed how nimble Baker’s mind really was. “A very small number of times in my life I’ve been in the presence of somebody who didn’t necessarily answer the question I asked. They answered the question I should have asked,” Pollak says. “And Bill Baker was one of those people. And there are other people who just build a mystique and give the impression of a mystique around them. And Bill had that, too.”
  48. New titles might not have increased his influence. By the start of the 1960s Baker was engaged in a willfully obscure second career, much like the one Mervin Kelly had formerly conducted, a career that ran not sequentially like some men’s—a stint in government following a stint in business, or vice versa—but simultaneously, so that Baker’s various jobs in Washington and his job at Bell Labs intersected in quiet and complex and multifarious ways. Baker could bring innovations in communications to the government’s attention almost instantly.
  49. “So often,” says Ian Ross, who worked in Jack Morton’s department at Bell Labs doing transistor development in the 1950s, “the original concept of what an innovation will do”—the replacement of the vacuum tube, in this case—“frequently turns out not to be the major impact.” The transistor’s greatest value was not as a replacement for the old but as an exponent for the new—for computers, switches, and a host of novel electronic technologies.
  50. Innovations are to a great extent a response to need.
  51. In the wake of the 1956 agreement, AT&T appeared to be indestructible. It now had the U.S. government’s blessing. It was easily the largest company in the world by assets and by workforce. And its Bell Laboratories, as Fortune magazine had declared, was indisputably “the world’s greatest industrial laboratory.” And yet even in the 1960s and 1970s, as Bill Baker’s former deputy Ian Ross recalls, the “long, long history of worry about losing our monopoly status persisted.” To a certain extent, Bill Baker and Mervin Kelly believed their involvement in government affairs could lessen these worries. In the view of Ross and others, such efforts probably helped delay a variety of antitrust actions. Ross recalls, “Kelly set up Sandia Labs, which was run by AT&T, managed by us, and whenever I asked, ‘Why do we stay with this damn thing, it’s not our line of business,’ the answer was, ‘It helps us if we get into an antitrust suit.’ And Bell Labs did work on military programs. Why? Not really to make money. It was part of being invaluable.”
  52. The fundamental goal in making transistor materials is purity; the fundamental goal in making fiber materials is clarity. Only then can light pass through unimpeded; or as optical engineers say, only then can “losses” of light in the fiber be kept to an acceptable minimum.
  53. Indeed, a marketing study commissioned by AT&T in the fall of 1971 informed its team that “there was no market for mobile phones at any price.” Neither man agreed with that assessment. Though Engel didn’t perceive it at the time, he later came to believe that marketing studies could only tell you something about the demand for products that actually exist. Cellular phones were a product that people had to imagine might exist.
  54. Pierce later remarked that one thing about Kelly impressed him above all else: It had to do with how his former boss would advise members of Bell Labs’ technical staff when they were asked to work on something new. Whether it was a radar technology for the military or solid-state research for the phone company, Kelly did not want to begin a project by focusing on what was known. He would want to begin by focusing on what was not known. As Pierce explained, the approach was both difficult and counterintuitive. It was more common practice, at least in the military, to proceed with what technology would allow and fill in the gaps afterward. Kelly’s tack was akin to saying: Locate the missing puzzle piece first. Then do the puzzle.
  55. Shannon had become wealthy, too, through friends in the technology industry. He owned significant shares in Hewlett-Packard, where his friend Barney Oliver ran the research labs, and was deeply invested in Teledyne, a conglomerate started by another friend, Henry Singleton. Shannon sat on Teledyne’s board of directors.
  56. “Ideas and plans are essential to innovation,” he remarked, “but the time has to be right.”
  57. “It is just plain silly,” he wrote, “to identify the new AT&T Bell Laboratories with the old Bell Telephone Laboratories just because the new Laboratories has inherited buildings, equipment and personnel from the old. The mission was absolutely essential to the research done at the old Laboratories, and that mission is gone and has not been replaced.”
  58. At the time of the breakup, in fact, it was widely assumed in the business press that IBM and AT&T would now struggle for supremacy. What undermined such an assumption was the historical record: Everything Bell Labs had ever made for AT&T had been channeled into a monopoly business. “One immediate problem for which no amount of corporate bulk can compensate is the firm’s lack of marketing expertise,” one journalist, Christopher Byron of Time, noted. It was a wise point. Bell Labs and AT&T had “never really had to sell anything.”3 And when they had tried—as was the case with the Picturephone—they failed. Government regulation, as AT&T had learned, could be immensely difficult to manage and comply with. But markets, they would soon discover, were simply brutal. AT&T’s leaders, such as CEO Charlie Brown, “had never had the experience or the training to compete,” Irwin Dorros, a former Bell Labs and AT&T executive, points out. “They tried to apply the skills that they grew up with, and it didn’t work.” In later years, the downsizing at Bell Labs, in terms of both purpose and people, would mostly be linked to this inability to compete.
  59. The purpose of innovation is sometimes defined as new technology. But the point of innovation isn’t really technology itself. The point of innovation is what new technology can do. “Better, or cheaper, or both”—Kelly’s rule—is one way to think about this goal.
  60. A large group of physicists, certainly, created a healthy flow of ideas. But Kelly believed the most valuable ideas arose when the large group of physicists bumped against other departments and disciplines, too. “It’s the interaction between fundamental science and applied science, and the interface between many disciplines, that creates new ideas,” explains Herwig Kogelnik, the laser scientist. This may indeed have been Kelly’s greatest insight.
  61. Eugene Kleiner, moreover, a founding partner at the premier venture capital firm Kleiner Perkins, was originally hired by Bill Shockley at his ill-fated semiconductor company. But the Silicon Valley process that Kleiner helped develop was a different innovation model from Bell Labs. It was not a factory of ideas; it was a geography of ideas. It was not one concentrated and powerful machine; it was the meshing of many interlocking small parts grouped physically near enough to one another so as to make an equally powerful machine. The Valley model, in fact, was soon so productive that it became a topic of study for sociologists and business professors. They soon bestowed upon the area the title of an “innovation hub.”
  62. “You may find a lot of controversy over how Bell Labs managed people,” John Mayo, the former Bell Labs president, says. “But keep in mind, I don’t think those managers saw it that way. They saw it as: How do you manage ideas? And that’s very different from managing people. So if you hear something negative about how John Pierce managed people, I’d say, well, that’s not surprising. Pierce wasn’t about managing people. Pierce was about managing ideas. And you cannot manage ideas and manage people the same way. It just doesn’t work. So if somebody tells you Pierce wasn’t a great manager . . . you say, of what?”
  63. Pierce, to put it simply, was asking himself: What about Bell Labs’ formula was timeless? In his 1997 list, he thought it boiled down to four things: A technically competent management all the way to the top. Researchers didn’t have to raise funds. Research on a topic or system could be and was supported for years. Research could be terminated without damning the researcher.
  64. What seems more likely, as the science writer Steven Johnson has noted in a broad study of scientific innovations, is that creative environments that foster a rich exchange of ideas are far more important in eliciting important new insights than are the forces of competition.
  65. To think long-term toward the revolutionary, and to simultaneously think near-term toward manufacturing, comprises the most vital of combinations.

What I got out of it

  1. The dominance of AT&T and how they were able to structure the organization to take advantage of the talent at Bell Labs was great to learn more about. Having to build or invent something which will have to go to market is important, having a diverse group of people who interact often, and “A technically competent management all the way to the top. Researchers didn’t have to raise funds. Research on a topic or system could be and was supported for years. Research could be terminated without damning the researcher.”

Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries by Safi Bahcall

Summary

  1. “I’ve always appreciated authors who explain their points simply, right up front. So here’s the argument in brief: The most important breakthroughs come from loonshots, widely dismissed ideas whose champions are often written off as crazy. Large groups of people are needed to translate those breakthroughs into technologies that win wars, products that save lives, or strategies that change industries. Applying the science of phase transitions to the behavior of teams, companies, or any group with a mission provides practical rules for nurturing loonshots faster and better.”

Key Takeaways

  1. The Bush-Vail Rules: Many of the lessons in this book are adapted from how Vannevar Bush at DARPA and Theodore Vail at AT&T’s Bell Labs handled and fostered loonshots
    1. Separate the phases
      1. Separate your artists and soldiers
        1. Create separate groups for inventors and operators: those who may invent the next transistor vs. those who answer the phone; those who design radically new weapons vs. those who assemble planes. You can’t ask the same group to do both, just like you can’t ask water to be liquid and solid at the same time
      2. Tailor the tools to the phase
        1. Wide management spans, loose controls, and flexible (creative) metrics work best for loonshot groups. Narrow management spans, tight controls, and rigid (quantitative) metrics work best for franchise groups
      3. Watch your blind side: nurture both types of loonshots
        1. Make sure your loonshot nursery seeds both types of loonshots, especially the type you are least comfortable with. S-type loonshots are the small changes in strategy no one thinks will amount to much. P-type loonshots are technologies no one thinks will work.
    2. Create dynamic equilibrium
      1. Love your artists and soldiers equally
        1. Artists tend to favor artists; soldiers tend to favor soldiers. Teams and companies need both to survive and thrive. Both need to feel equally valued and appreciated. (Try to avoid calling one side “bozos.”)
      2. Manage the transfer, not the technology: be a gardener, not a Moses
        1. Innovative leaders with some successes tend to appoint themselves loonshot judge and jury (the Moses Trap). Instead, create a natural process for projects to transfer from the loonshot nursery to the field, and for valuable feedback and market intelligence to cycle back from the field to the nursery. Help manage the timing of the transfer: not too early (fragile loonshots will be permanently crushed), not too late (making adjustments will be difficult). Intervene only as needed, with a gentle hand. In other words, be a gardener, not a Moses.
      3. Appoint and train project champions to bridge the divide
        1. Soldiers will resist change and see only the warts on the baby-stage ideas from artists. Artists will expect everyone to appreciate the beautiful baby underneath. They may not want have the skills to convince soldiers to experiment and provide the feedback that is crucial for ultimate success. Identify and train bilingual specialists, fluent in both artist-speak and soldier-speak, to bridge the divide
    3. Spread a system mindset
      1. Keep asking why the organization made the choices that it did
        1. Level 0 teams don’t analyze failures. Level 1 teams assess how product features may have failed to meet market needs (outcome mindset). Level 2 teams probe why the organization made the choices that it did (system mindset). They analyze both successes and failures because they recognize that good outcomes don’t always imply good decisions (got lucky), just as bad outcomes don’t always imply bad decisions (played the odds well). In other words, they analyze the quality of decisions, not just the quality of outcomes.
      2. Keep asking how the decision-making process can be improved
        1. Analyzing a product or a market may be technically challenging, but it is a familiar and straightforward exercise. Analyzing why a team arrived at a decision can be both unfamiliar and uncomfortable. It requires self-awareness from team members; the self-confidence to acknowledge mistakes, especially interpersonal ones; and the candor and trust to give and receive delicate feedback. The process is likely to be more efficient, and less painful, when it is mediated by a neutral expert from outside the team.
      3. Identify key influences – people involved, data considered, analyses conducted, how choices were framed, how market or company conditions affected that framing – as well as both financial and nonfinancial incentives for individuals and for the team as a whole. Ask how those influences can be changed to enhance the decision-making process in the future
      4. Identify teams with outcome mindset and help them adopt system mindset
    4. Raise the magic number
      1. Reduce return-on-politics
        1. Make lobbying for compensation and promotion decisions difficult. Find ways to make those decisions less dependent on an employee’s manager and more independently assessed and fairly calibrated across the company.
      2. Use soft equity (nonfinancial rewards)
        1. Identify and apply nonfinancial rewards that make a big difference. For example, peer recognition, intrinsic motivators
      3. Increase project–skill fit (scan for mismatches)
        1. Invest in the people and the processes that will scan for a mismatch between employees’ skills and their assigned projects, and will help managers adjust roles or employees transfer between groups. The goal is to have employees stretched neither too much nor too little by their roles.
      4. Fix the middle (reduce perverse incentives for middle managers)
        1. Identify and fix perverse incentives, the unintended consequences of well-intentioned rewards. Pay special attention to the dangerous middle-manager levels, the weakest point in the battle between loonshots and politics. Shift away from incentives that encourage battles for promotion and toward incentives centered on outcomes. Celebrate results, not rank.
      5. Bring a gun to a knife fight (engage a chief incentives officer)
        1. Competitors in the battle for talent and loonshots may be using outmoded incentive systems. Bring in specialist in the subtleties of the art – a chief incentives officer.
      6. Fine-tune the spans (wide for loonshots groups; narrow for franchise groups)
        1. Widen management spans in loonshot groups (but not in franchise groups) to encourage looser controls, more experiments, and peer-to-peer problem solving
    5. For anyone championing a loonshot, anywhere:
      1. Mind the False Fail
        1. Is a negative outcome due to a flaw in the idea or the test? What would you have to believe for it to be a flaw in the test? How might you evaluate that hypothesis
      2. Listen to the Suck with Curiosity (LSC)
        1. When you have poured your soul into a project, you will be tempted to argue with critics and dismiss whoever challenges you. You will improve your odds of success by setting aside those urges and investigating, with genuine curiosity, the underlying reasons why an investor declines, a partner walks, or a customer choose a competitor. It’s hard to hear no one likes your baby. It’s even harder to keep asking why
      3. Apply system rather than outcome mindset
        1. Everyone will make wrong turns in navigating the long, dark tunnel through which every loonshot travels. You will gain much more (and feel much better) by trying to understand the process by which you arrived at those decisions. How did you prepare? What influenced you? How might you improve your decision-making process?
      4. Keep your eyes on SRT: spirit, relationships, time
        1. When championing a loonshot, it’s easy to lose sight of what’s important, of why you are doing with what you are doing. A little obsession can be good. Too much can backfire. What’s helped me, on occasion, to pull back from the edge – to create a more sustainable and productive level of obsession – is stepping back to think on SRT

What I got out of it

  1. A beautiful and powerful framework for how to foster and handle loonshots. Important for any size company or venture

The Dream Machine: JCR Licklider and the Revolution that Made Computing Personal by Mitchell Waldrop

Summary

  1. Licklider was far ahead of his generation in seeing the potential for computers – for making them humane and individual, in democratizing access to information, creating a symbiosis between man and machine. It was his work in the Pentagon along with many other visionaries who made this possible – that allowed for the standalone computer with a mouse and a graphical user interface to come into existence. His desire to understand how the brain worked as a system fueled his curiosity. Lick went on to form the ARPA Information Processing Techniques Office in 1962 and started the research funding for interactive computing and pervasive worldwide networks that has resulted in most of the technology we use today and also fueled the next generations of computing researchers – many of whom became the founders and mainstays of Xerox PARC. When computers were a short step removed from mechanical data processor, Lick’s treatises on human/computer symbiosis shifted our understanding of what computers were and could be.

Key Takeaways

  1. Lick’s goal was to forge ahead with the human/computer symbiosis and create an interconnected, self-perpetuating system into a single computer network. An electronic medium to connect everyone – the ARPA net. Today it is known as the internet and everything we now associate with it
  2. JCR Licklider may be one of the most intuitive geniuses of all time. He simply saw in his head how information flowed, and how people, things, and ideas are interconnected
  3. Lick, while humble and nice, hated sloppy work, glib answers, and never took anything for granted. He was mischievous and a little anarchical. He was never satisfied with the ordinary and always pushed the limits. His grounding in psychology was essential for his later work with computers as he always tried to design the computer and how it functioned to best meet the needs of the humans operating it. Lick approached every problem as a systems problem rather than a detailed or individual problem
  4. The first high-profile project he worked on was related to acoustics for the war and his boss had a simple mantra: hire the best people, buy them the best machines money can buy, inspire them to no end, and work them 14 hours a day. With this formula they achieve nearly everything they set out to
  5. Norbert Wiener was a prodigious character at MIT. He was a genius in multiple ways, especially mathematics where he was able to use his intuition and form physical models in his head of the problem rather than merely manipulating symbols on the page. He had the hologram in the head 
  6. Alan Turing didn’t like seeing what others had accomplished before him. He preferred to reinvent the wheel and figure things out for himself. He wasted a lot of time and reinvented the wheel but he came to understand things deeply.
  7. Johnny Von Neumann’s stored program concept created software and changed computing, opening up the potential that we associate with computers today
  8. Claude Shannon thought of information through a 5 part framework: source, transmitter, communication medium, receiver, destination. This simple framework helped him think through the purpose of information and not get bogged down in details. Information ought to measure how much you learn from a given message. If you knew everything in a given message, the information content is zero. However, information and meaning is separated as it relates to computers. Shannon also proved that it is possible to get a message through with perfect fidelity no matter how much static or distortion or how faint the signal. It’ll eventually get too slow and the codes too long but it is possible to overcome noise. This is the fundamental theorem of information theory. Shannon didn’t like how information and meaning could be too easily confused so he had Von Neumann come up with a new name and he came up with one immediately: entropy. Information is entropy. It has the same formula as the physicists formula for entropy. A mathematical variable related to the flow of heat. Information is everywhere and in everything it is as old as time and ties together the mind-body problem, computation, communication, and more
  9. Lick was interested in every domain and was always pulling in new ideas from different fields. He loved novel ideas and would always push himself and others to think about things differently in order to gain new or deeper insights. While Lick has high expectations for his team, he was extremely devoted and his team knew it – he had built a tribe more than a research group. Lick optimized for creativity and productivity so cared very little for credit. He would give his ideas and insights away for others to work on and publish so that he could get more done 
  10. Understanding how our brain works brought together information theory, logic, communication, cognitive science, behavioral psychology, and much more. Two key breakthroughs were understanding chunking and that it matters tremendously how our neurons fire and are organized – not just the raw number of neurons we have
  11. When Lick was brought on to head up the new ARPA project there was no budget, no mandate, no charter. This was perfect as they could simply talk about and work on the most important questions and topics as they came up, not being pigeonholed or sucked into a specific purpose but able to adjust and adapt to everything new that was happening
  12. A key realization for Lick was that if all his visions where to come true, he had to create a self-reinforcing and self-sustaining community between all the different groups who are contributing to this project. Without this focus and insight, many of these dreams might have been lost, forgotten, or not achieved for some other reason
  13. Corvado created the first open source system which led to the software boom and the PC. Controversial at the time, he followed the dictum that if you create something useful people, will use it. This was significantly different from other utilities of the past because rather than value flowing just one way (like electricity to users), value flows two ways now: from software to user and user back to software. This had tremendous implications
  14. Lick give people plenty of space as long as they’re doing something interesting and living up to his high standards. However, if not, he can be ruthless and shut down programs that weren’t performing
  15. For all of Lick’s strengths, he was terrible administratively. Frustrating his colleagues and friends as they had to badger him for weeks or months to get anything done. And, when everything is funded by ARPA, this was a huge deal 
  16. Lick at ARPA and Bob Taylor at Xerox Parc had to learn how to find a way to get their groups all to move together, to give their groups a sense of cohesion and purpose without crushing their spontaneity and creativity. They had to set things up and create an environment where they would follow their own instincts and self-organize. This is the fundamental to dilemma of management. Bob Taylor spent years traveling and getting to know the cultures of different high performing groups and he took the time to speak to the youngest people there. Not only tp pick up their ideas but to understand what their values were and how he could cater to them.  Taylor’s style of research can be summed up as don’t just invent the future, go live in it. Don’t worry about the cost for now but whatever you invent, make sure to use it and then show others how to use it and why it’s helpful. The only mandatory program was a once weekly discussion from the program leaders about what they were doing and for an hour the other people would have at him. This created a sense of cohesion and purpose and also flushed out ideas before going too far along the wrong path. These meetings often got heated and Taylor would help turn them from “class 1” to “class 2” meetings, meaning they would go from yelling at each other to having to explain the other side‘s position to their satisfaction. This worked amazingly well to flush out ideas and improve communication.
  17. Xerox PARC’s main vision was to create the digital office, an integrated symbiosis between working man and machine. Broadly, it was split into two groups – one focused on hardware and the other on applications. Low cost, high performance and high quality graphics was a thread which ran through everything they were trying to do. Moore’s Law was just beginning to take hold and this who were still sold on time sharing began to be able to see the possibility of an individual, high powered machine for everybody
    1. There was this thread that ran through Vannevar Bush, Licklider, Doug Engelbart, Alan Kay, and others. It was the ascent of man, it was like the Holy Grail. PARC would rationalize it according to what Xerox needed but whenever they could phrase an idea to align with this path everybody’s eyes would light up, hitting a sort of resonance frequency. 
      1. Engelbart’s “Mother of All Demos” – showing off technology which set fire to the vision of the future and what could be
  18. Alan Kay was one of the key members of PARC’s team and was a prodigy from a young age. He learned to read by the age of three and read hundreds of books before going to school. By that young age he knew that a lot of what the teachers were telling him was wrong or at least that there were multiple points of view. The teachers did not like this. He never distinguished art from science and was one of the key pioneers in this field. 
  19. Good names are incredibly important for prototypes – they have to be familiar, easy to spell, easy to use, easy to understand, have a broad theme, and conjure up pleasant feelings. 
  20. Alan Kay mentions that in the history of art, it is not the adults who actually invent the new medium who do amazing things, but the first generation of kids to grow up with it who do
  21. Xerox was growing so quickly in the late 1960s and 1970s that they almost choked on their own growth. In order to survive, they had to bring in management, marketing, and finance types – mostly from IBM and Ford.  While this helped them survive their amazing growth, it also reinforced some bad lessons – that nothing exists or is useful unless it could be shown and captured on the spreadsheet and eventually this led to the demise of Xerox PARC and that era of research and innovation. Jim O’Neil became the numbers guy and shut down much of the spontaneous generation and innovation because if it didn’t meet his numbers he couldn’t “see it” and wouldn’t buy into it. When sales and finance make all the shots, the company is on a downward spiral as they are not able to innovate or think long term
  22. Xerox PARC was an Eden in many ways but what allowed them to flourish was the vision, the people, and an abundance mentality. The fact that they had money to spend and didn’t have to jump through hoops to get it. When there is scarcity you don’t have a community, you just have a bunch of people trying to survive. In 1975 Xerox’s printer and copier business was being threatened and this was their cash cow. The instinct is to keep pouring money into this in order to save it but sometimes that isn’t appropriate. You must know when to cannibalize or disrupt yourself 
  23. You always got the sense that Lick was playing. He was like a kid in a candy store. His exploratory and curious child-like mind never went away. He was not suited to be an administrator or manager but was a visionary and community builder. He encouraged people and showed them what was possible, what they were really working towards 
  24. DEC took advantage of the open architecture and was able to foster creativity and uses for their machines that they never would’ve been able to come up with. Many people loved the ability to tinker, upgrade, or personalize what they bought rather than buying a finish package from an IBM for example. Roberts and his Altera machine would follow DEC‘s lead and make it an open architecture which unleashed a wave on entrepreneurialism and garage start ups by the hundreds – filling all sorts of niches and launching some of the world’s biggest and most successful companies (such as Microsoft)

What I got out of it

  1. An incredibly fun read – detailing not only the people and the history behind the computer revolution, but the atmosphere, thinking, and optimism which fueled it

Competing Against Luck: The Story of Innovation and Customer Choice by Clayton Christensen

Summary
  1. This book is about how to better create, predict, and act upon innovation breakthroughs. It helps us better understand why customers behave the way they do and make decisions, shifting from relying on luck to competing against luck.
Key Takeaways
  1. It often looks like companies have good innovation processes but the fundamental problem is that the hordes of data we have today is not organized in such a way as to helpfully indicate which might be the next breakthrough idea. The data never tells you why the customers make the decisions that they do. Understanding this process and some of the questions you can pose will help you get away from relying on lucky and hit or miss innovations and being able to better predict what customers truly want. This leads us to “The Jobs Theory”
  2. The Jobs Theory
    1. The better question to ask is, “what job did you hire that product to do?” This change in perspective helps clear up what your customers truly want. Most of the focus is on customers and the products themselves and not how well the product is truly solving the job that the customer wants. This helps us understand the why of customer behavior, providing the fundamental driver of innovation success
    2. Customers hire a product to make progress, the job they’re trying to get done and the product/service solves these jobs.
    3. Jobs Theory also take into account circumstances, people’s values, emotional and social needs, and more.
    4. Never fall in love with your solution to the job, always try to find way to better understand the job and how to best solve it. These questions and lens will help you more accurately define who your competition truly is. For example, Netflix competes with every form of leisure including a bottle of wine and sleep
    5. The power lies in not being able to explain to successes but in helping a predict future innovation successes
    6. Jobs Theory is an integration mechanism allowing you to create a full narrative and to focus on the right type of complexity. The priorities and trade-offs of customers may totally change with this lens and it’ll get you to focus on what’s truly important the why of customer decision making
    7. These questions help you step into your customer shoes and truly see the world through their eyes
    8. You not only have to think of the product itself but how they find, purchase, and initially learn how to use your product
    9. Non-consumption could be your biggest opportunity as customers don’t do anything because there is no solution which satisfies their needs. This opportunity will not show up in any data but you can uncover it by observing people‘s behavior. You can learn everything you need to know about your product or service just by observing people who use and don’t use your products but you have to know what you’re looking for
    10. Whatever you see customers compensating see this as a great opportunity for some innovation which people would pay highly for
    11. Negative jobs, or what people don’t want to do, are also a rich resource for innovative ideas
    12. Observing customers use your product or service, especially in any unusual ways, is full of opportunities for improvement or for horizontal moves
    13. You have to think through and understand what other product/service/behavior is being “fired” or what you are replacing, in order to better understand where your product fits and what job it is truly doing for you and your customer
    14. Two important forces that are very rarely considered are habits (the fact that people are comfortable with something that tends to be good enough) and anxiety of choosing a new product
    15. Customers are infamously bad at knowing what they want but they can tell you very quickly and accurately where they struggle
    16. Only by constructing the narrative and taking everything into account that led to the purchase can you change the ending and see how your product could fit in
    17. You are selling progress, not products
    18. Consistent small “hires” is a great indicator you are satisfying the job needed
    19. Companies should be organized around the job to be done, rather than by geography, product line, etc.
    20. Products which nail the job they’re supposed to do don’t have to worry about price – customers are grateful for the solution
    21. Taking a job perspective will easily allow you to shift into a mindset and see clearly how to shift annoyances from the customer to internally so that the customer experience is better than ever before
    22. When a product commands high market share and has high pricing power, it is rarely the product itself which is amazing. The overall experience fits the job so perfectly that they’re hard to copy or replace. Creating experiences around this job almost inoculate you to competitors. You must understand the job, the set of experiences around the job that you need to create, and integrating around the job are critical. Helping the customer make progress, incorporating the functional/social/emotional aspects, and aligning experiences and the job
    23. Aligning around the job to be done and making that job crystal clear gives people confidence to act on their own and efficiently scales decision making because the goal is clear. This unlocks human ingenuity, innovation and enthusiasm
    24. Jobs to be done should be in verbs and nouns and not in adjectives and adverbs. It should describe the process itself and not what the customer feels
  3. A genuine insight is a thought which is known as true upon conception – no further analysis is needed
  4. Because it is so much easier to measure efficiency than effectiveness, that’s what most organizations optimize towards. It is hard but necessary to keep top of mind what is important (whether easy to measure or not) and work towards that
  5.  The voice of the customer must be the loudest voice in any decision
  6. Beware the fallacy of “data is always objective”. Data is man made and fallible
  7. SNHU keeps one vital statistic – if you could go back in time knowing what you know now, would you choose SNHU again?
What I got out of it
  1. What job is your product or service being hired to do. This framework helps you better understand what your customers need and how to best serve them. All customers buy products or services to make progress, not for the product/service itself

Against the Odds: An Autobiography by James Dyson

Summary

  1. Dyson wants to tell his story to inspire other inventors and to share his unorthodox business philosophy – no gimmicks, simply a better product. “The best kind of business is one where you can sell a product at a high price with a good margin, and in enormous volumes. For that you have to develop a product that works better and looks better than existing ones. That type of investment is long term, high risk, and not very British.”

Key Takeaways

  1. Dyson was in debt and it took years and thousands of failures but he eventually had his breakthrough with the Dyson Dual Cyclone. He never lost faith but it took years even after that to convince others he had something revolutionary
  2. On Mentors
    1. Some of Dyson’s heroes include Isambard Kingdom Brunel, Buckminster Fuller, and Jeremy Fry (his mentor).
    2. There was in Brunel, a level of conditioning. His father had been an engineer of almost equally gargantuan vision, building the first tunnel under the Thames and planning one under the Channel, too. For Isambard there was that doubled-edged Oedipal desire both to impress and to outdo his father. It is what the literary critic Harold Bloom calls the Anxiety of Influence, and the need for a figure to be ‘slain’ was paramount in the creation of originality – and genius. My father was dead, and his achievement, anyway, was as a classicist. External figures had to count for a father. It is why a man called Jeremy Fry became so important to me, and Sir Hugh Casson, and Anthony Hunt. But they had to be overcome before I could move forward. If I was to push further there had to be new fathers. There had to be Buckminster Fuller, and Brunel.
    3. Jeremy Fry
      1. He was a man who was not interested in experts. He meets me, he thinks to himself, ‘here is a bright kid, let’s employ him.’ And he does. He risks little with the possibility of gaining much. It is exactly what I now do at Dyson Appliances – take on unformed graduates to throw youthful ideas around until they have given all they can and are ready to move onto new things. The attitude to employment extended to Fry’s thinking in everything, including engineering. Like Brunel, he did not, when an idea came to him, sit down and process it through pages of calculations; he didn’t argue it through with anyone; he just went out and built it.
      2. The root principle was to do things your way. It didn’t matter how other people did it. It didn’t matter if it could be done better. The Ballbarrow was not the only way to make a wheelbarrow that didn’t get stuck in mud – but it was a way. The trick is not to keep looking over your shoulder at others, or to worry, even as you begin a project, that it is not going to be the best possible example of its kind. As long as it works, and it is exciting, people will follow you
      3. There were times when he was wrong. In business you will be wrong, by and large, 50% of the time. The trick is to recognize when you have gone wrong and correct the damage – not to worry, at the moment of making the decision, whether it is the right one
      4. Jeremy later took me to France and had me designing first a pedalo, and then a pair of “Jesus floats” which could enable his daughter to walk on water. As a novice designer, as a novice anything I suppose, you are like a sponge looking to soak up mentors and models, and in Fry I had an ocean of experience to absorb. Like Brunel, he operated empirically. He had no regard for experts from other fields (always teaching himself whatever he needed to know as he went along) and he was an engineer interested in building things that derived not only excellence from their design, but elegance as well.
  3. Entrepreneurial and Business Principles
    1. Anyone can become an expert in anything in six months
    2. Now, with a hindsight that proves I was right, those faults of mine seem less criminal. And perhaps that is the nature of “vision”: when all has come right, the kind of man who persisted despite constant ridicule from the controlling forces will be said to have possessed vision. In my case and for all inventors, “vision” might equally read as “stubbornness”. This fastidiousness of mine was to prove my strength in the long-term
    3. Don’t overanalyze! Just go out and build it. With enthusiasm and intelligence, anything is possible. The root principle is to do things your way
    4. Never underestimate the role of beauty in design
    5. Selling the Sea Track was quite easy because I really believed in what I was pushing. You find out what your man wants, and when he comes to you he is buying it as soon as he starts talking, before you even start to sell. It is not about the right adjectives, or shouting your mouth off. It is about discovering a need and satisfying it. Not creating a need, by the way, as many of your cynical marketing men would have it. I have seen many of our own salesmen (I should say ex-salesmen) trying to sell things in meetings, showing the buyer things he couldn’t possibly be interested in, making him feel like a sucker, and cocking everything up. Without exception, the best agents were the ones who, quite irrespective of their business or financial sense, saw the boat for what it was, and loved it for it. While the temptation (and board pressure) was to hire established boat distributors, who knew the market and would order vast numbers, I was determined to choose people who were mad keen on it. They were the only ones who would be able to overcome all the obstacles and difficulties of selling an entirely new concept, and make a real business out of it. Best of all, I decided not to sign up any agent unless he would undertake to buy one boat ever year. Having twigged that we were wasting a lot of time signing up distributors who never ordered a thing, I realized that not only would it be infinitely easier for our agents to sell if they had a model to demonstrate, rather than just a brochure and a standard patter, but that if they had bought it already, then they would be doubly determined to sell it. Of course, I sold the concept to the agents as being entirely about demonstrability, but in fact it was far more to do with motivation. That, and the fact that with all the publicity we were getting and the hundreds of enquiries from potential distributors all over the world, I realized that we could make good business just from opening up new markets. Anytime we were short of sales, in fact, we would simply set about looking for new markets.
    6. The British obsession with the quantum leap holds back our country. We always want to create something new out of nothing, and without research, and without long, hard hours of effort. But there is no such thing as a quantum leap. There is only dogged persistence – and in the end you make it look like a quantum leap. Just ask the Japanese
    7. Working and aligning with first principles – “It is a law of physics – don’t ask me why, I don’t make these laws – that when a particle with mass makes its first turn around a curved wall its speed is multiplied three times. You can see it happening when the ball is spun in a roulette wheel, or better still when you shoot a ball in a pinball machine and it accelerates around the corner. Now, the reason that the cyclone is cone shaped is that when you reduce the diameter around which your object is travelling it will accelerate again, by about 50%. In this way the cyclone in the vacuum cleaner, for example, accelerates the dust particles from 20MPH to 600MPH and then to 924MPH, or about 324,000RPM. You need to think of the whole caboodle, dust and air, as being like a long sausage. As it enters the top of the cyclone it is being pushed round and round the walls until it comes to the bottom. The dust and rubbish, which has this great weight, is not enjoying the journey, adjust as when you drive your car hard at a bend it wants to keep on going straight and you have to exert pressure on the steering wheel to keep the car on the road. The air, which has no mass, doesn’t have this problem, and rather than straining at the walls, which would ultimately blow the whole thing up, it can get to the center of the cyclone, and take the easiest possible exit. So, at the top of the cyclone, in the middle is a chimney. The air happily escapes out of the whole; the particles cannot. Thus, the only thing that can get out is pure air, so no expelled dust, and no smells. Like so many industrialists, the particle has an insurmountable sheep mentality
    8. You have to take the Edisonian approach: test, and test, and test until it works best. I made hundreds of cyclones in the early years, and then thousands of them. Testing all the different styles, I found that the important thing was the entry point that it should enter peripherally, and at a pure tangent. I tried it with one entry and with two entries, I even made one with 140 entries, just in case it was better, but you only ever got one flow of air. Slow, slow, slow. These things cannot be hurried. When you develop a prototype you have to change only one thing at a time. If you are really going to improve things, and that is what inventing is all about, then you are going to have to be patient, very patient.
    9. Innovation requires builders, not bean counters. You need them, just not in the top spot. However, the British instead go with spending millions with big advertising or PR consultancy to persuade the public they were better than everyone else, and were in some way new and exciting. It never occurred to them to invest the money in the research and development of something genuinely, and tangibly, new and exciting. That, I am afraid, is the only way to achieve long-term growth, wealth, and stability. Slow, boring and initially expensive it may be, but the cataclysmic boom and bust of the years that followed were the price we paid for excitement.
    10. The best looks come out of following the engineering
    11. Design / Invention Philosophy
      1. No one ever had an idea staring at a drawing board – Francis Bacon always got his ideas from walking in the country-side and observing nature, rather than sitting in his study. SO get out and look at things, and when an idea comes, grab it, write it down, and play with it until it works. Don’t sit and expect ideas to come.
      2. Every day products sell
      3. New technology – the thing about truly new technology is that it makes your invention patentable. And then no one can copy it.
    12. One of the most crucial business lessons of my life: to stint on investment in the early stages, to try to sell a half-finished product, is to doom from the start any project you embark on.
    13. My big mistake had been presenting the same craft to each customer and telling them, ‘this can be adapted to suit your needs.’ If someone wanted a diving boat I would explain that it could be fitted with compressors, heaters and a very slow diesel engine. If an oil company wanted a crew bus, I would tell them that suitable seating and a faster engine could be fitted. To the military I said I would bulletproof the sides and engine. To constructors in search of a bridging tug I said, special buffers? High power engine? No problem.’ I convinced not a single one of them. People do not want all-purpose; they want high-tech specificity. So, out with the universal modular craft. In with, ‘I have just the boat for you, my dear sir: a purpose-built diving boat/bridging tug/assault craft/etc….’ For each function Deirdre designed a brochure, and they began to sell. And it all seemed so obvious: you simply cannot mix your messages when selling something new. A consumer can barely handle one great new idea, let alone two, or even several. Why tell them this thing was universally adaptable when universality mattered to the individual consumer not a whit? It was for the same reason that when I put the Dual Cyclone on the market I kept more or less stumm about its potential as a dry-cleaning tool. How could I expect the public to believe this was not only the best vacuum cleaner ever made, but also something completely different? And so, with a quite respectable product to present, I set off around the world to start selling it properly. It was time spent away from designing, but it was to teach me, above all else, that only by trying to sell the thing you have made yourself, by dealing with consumers’ problems and the product’s failings as they arise, can you really come to understand what you have done, to bond with your invention and to improve it. Conversely, of course, only the man who has brought the thing into the world can presume to foist it on others, and demand a heavy price, with all his heart
    14. I enjoyed selling to the military because they were never interested in cost, only what the thing did, and how well it did it. A fantastic situation for a young engineer or designer to be in
    15. One of the strains of this book is about control. If you have the intimate knowledge of a product that comes with dreaming it up and then designing it, I have been trying to say, then you will be the better able to sell it and then, reciprocally, to go back to it and improve it. From there you are in the best possible position to convince others of its greatness and to inspire others to give their very best efforts to developing it, and to remain true to it, and to see it through all the way to its optimum point. Total fruition, if you like
    16. Only way to make any real money is to offer the public something entirely new, that has style value, as well as substance, and which they cannot get anywhere else
    17. When salesmen and accountants become king, all risk goes out the window, and with it, all experimentation, trial and error, innovation, difference, and beauty
    18. Don’t trust in experts, hire smart, unformed youth who can throw ideas around and give all they can until they want something new
    19. Dyson’s desire for simplicity and his moral code led him to never bribing or taking bribes which greatly helped him in the long-term although the immediate benefits could have been great
    20. The establishment of a client base by word of mouth is what gives a product integrity and longevity
    21. Sidney Jacob could see the negotiations only from his point of view, and had no inkling that I, like any businessman, needed to be motivated into doing the deal too. That combination of charm and steel is very nasty indeed to encounter. It leaves you feeling utterly shafted and unwilling to do a deal. So I didn’t.
    22. In dealing with Japan and the importance of dogged, incremental progress over a very long time frame – “But they retain those key elements in their psyche that made them such ideal partners for someone like me, and a product like mine. They are not inventive, in the way that we, the British, like to think that we are. They do not bumble along in the hope of making it big when some bright new idea dawns on the horizon. They believe in progress by stages, in the interactive development that I have described as Edisonian, the persistent trial and error that allows them to wake up one morning, after many, many mornings, with a world-beating product…And all their success is born out of a theory of gradual development that is the very antithesis of the British obsession with the quantum leap. The Japanese always took the opposite view in that they never put any faith in individualists, and lived an anti-brilliance culture. And that was healthy. They know full well that quantum leaps are very rare, but that constant development will result, in the end, in a better product. And that is the mindset I share with them. I am not a quantum leaper. I produced something only after gradual and iterative development.”
    23. Always respect the creatives. I am constantly amazed at the way businessmen seem quite happy to treat designers in this way, an approach they would never take with, say, accountants or lawyers. They seem to perceive design as some sort of amateur indulgence, a superfluous frippery in which everyone can chuck in their opinions and to the hell with the designer.
    24. Out of town lawyers hardly ever win their case in America
    25. The importance of a unified team – “This was not a collection of underlings with me bossing them about, by any means. We were a band on a mission to design a vacuum cleaner that could challenge the world, and it was bloody exciting.
    26. Has always depended on raw, young graduates to bring in new blood and fresh eyes
    27. Manufacturing is about making things people want, which work well, and look good
    28. Dyson End of Life Recovery (The Recyclone) – “It seemed terrible, after all that had gone into each one, that they should just be thrown on a landfill when they die, and so it occurred to me that we should offer to take back all our vacuum cleaners at the end of their lives, and recover whatever is recoverable. And then it occurred to me that everything should be recoverable. And so we did, and it is. All you have to do when your Dyson dies – which should not happen for a very, very long time – is to call the hotline number on the handle and we will send round the undertakers free of charge
    29. After the soon to be launched DC-03, 04, and 05, there will be other and different products. But they will not be ‘copycat’ products – that is no principle by which to work. We are in the business of developing new technology and new products, and of recruiting bright young graduates to help us do exactly that, so nothing will come out that is not both innovatively designed and conceived around a brand new invention. It is an ambitious attitude for us to take, and is bound to slow down our growth, but though it is slower, it will send our roots deeper than the quick development of a huge portfolio of old technology that we have merely redesigned. And it will be much more satisfying for body and soul.
    30. Short-termism is such a national illness that it could be called short-termitis. And yet nobody does anything about it. That, if anything, is the recurring theme of this book. Let us please invest in R&D for future profit. And let us reduce our spending on advertising, so as to refocus on business, and make it into something product-oriented, and R&D driven
    31. Debt, you see, is a terrible thing for a small company. It fosters a bizarre reverse psychology that comes from the darkest depths of the human psyche and makes you even more inclined to overspend. The reason for this, is that when you have no money and are in debt you start thinking about all the things you could do if you had money, and that sets you to dreaming up all sorts of schemes and projects, which lead you into further debt as you try to realize them. When you have money, on the other hand, you tend to be more careful, largely because the occasion does not arise where you sit around desperately trying to think of ways of making money. You just get on with your life without thinking up hair-brained schemes you couldn’t possibly carry out. Thus, without an overdraft you are not only freed of the interest burden, but your mind is freed to think more clearly and you can negotiate more effectively with both suppliers and customers, because they can see that you are not stretched financially and desperate to make a deal.
    32. What we were attempting to offer was a panacea to all your gardening troubles. But, rather as had happened with the Sea Truck, consumers were simply not able to grasp so many improvements in one fell swoop. And the thing was too universal, too all-purpose. Had we begun it as, say, a greenhouse watering system, with a single timesaving benefit, thus appealing to a specific need, it would have bedded down nicely into the real market. We could then have gradually introduced the other ideas and made a real success of it
    33. As you suffer each rejection, you learn a little bit about your product, and what people want from it, and why – and you can sometimes justify your profitless ploddings that way, too
    34. In America, with a population 5x bigger than in Britain, each niche is 5x bigger, and since each person has about twice the spending power of someone in Britain, that niche is in real terms 10x bigger than it would be here, and the risk is thus reduced 10x
    35. The thing about inventing is that it is a continual and continuous process, and it is fluid. Inventions generate further inventions. In fact, that is where most inventions come from. They very rarely come out of nothing. So while it was the Dual Cyclone that was the basis of my first vacuum cleaner, as I went on to develop it over the next 12 years, and, crucially, in the nine months before bringing out the DC-01 (as it was to be called), dozens of other innovations were generated along the way.
    36. It was easier for us, as designers working apart from salesmen, to exclude the ‘bells and whistles’ because we were simply designing our one ideal product without worrying about marketing demands. When it came to talking to retailers, however, they always wanted to know where the height adjuster was. We would explain to them that we had designed a free-floating cleaner head that automatically adjusted to the pile of the carpet, or indeed to a stone or wood floor, but, for simple sales guff, I suppose the DC-01 appeared underequipped
    37. It is received wisdom in the appliance market that brand is important. But I knew that myth could be exploded. Brand is only important when two products are identical; it is not important if one of the products has better technology or a better design than the other. Hoover had traded on their name for too long, which was easy as long as all the products were the same – theirs was identical to the Panasonic or the Electrolux so why not buy it? That brand dependence was quite simply shattered when the Dyson came along, because it gave the consumer, for the first time since men wore top hats in town and rode horses to work, the choice of something better. And suddenly the customer had something other than brand name to look at. We even went so far as to make our own brand name not very clear, which emphasized the point. If you are selling cornflakes or cola then branding is all important – it ought to mean nothing when you are selling technology.
    38. We also scooted to number one so silently because our profile was raised more by editorial coverage than by paid-for advertising. Apart from being cheaper, this is much more effective, because it carries more of the weight of objective truth than a bought space. But in terms of visibility it is less popularizing, while being more efficient in selling to those to whom it is exposed, because those prospectively in the market will be drawn to it. It is also out of your control – you cannot make journalists write about you, and I have never tried. And, when they have, I have never sought to influence what they write and have never asked to see their copy before publication. They take me, or the products, as we are, and I have to hope they like us. It is one of the virtues of having such a strange-looking product, however, that journalists are more likely to take an interest in it. Something genuinely different has a humanity, even a humor value, that another clone model from Miele or Panasonic will never have. A journalist’s job, particularly in the area of design and technology – but also in the field of business – is to find things that are going to be exciting in the future and then get there first, or as early as possible. They also seem to be unerringly good at it. And one story can generate a groundswell of editorial coverage that gives you the kind of accreditation that advertising never can. Advertising can only take you so far, you see, until the consumer realizes he is being sold something.
    39. And the fact is that they are not creative at all. They are doing the very worst thing you can do, which is to sit there staring at a drawing board trying to come up with an idea out of nowhere. You need dialogue to create. Of all the creative jobs I have encountered it is advertising people who make the most song and dance about creativity. And, you know, they are not creative at all. When I think of the real creation that my designers are involved in, and compare it with these “creatives” who are earning so much more to just sit around in the Groucho Club and be generally useless, it makes me vomit. I can’t go on supporting an industry like that, I’m afraid
    40. Why don’t we tell people how the machine dry-cleans, how it climbs stairs, how it has automatic hose action? The answer is twofold – you can’t sell more than one message at a time, or you lose the belief of the consumer, and we had to establish, beyond all question, that our machine overcame a problem that all other systems suffered from.
    41. Who is it that gets neglected? The inventor, that’s who. The designer, the engineer, the chemist, the brewer, the boffin. The people obsessed by the product; who willingly accept that the sizzle is important, but who get their kicks trying to make an even better steak. Car companies used to be run by people who loved cars. They knew how to make cars themselves, and were always trying to make them better. Retail companies used to be run by people who loved shops, and a hundred and something years ago, George Safford Parker was nutty about fountain pens. As business got bigger and more complex, these obsessive, impractical, product-driven enthusiasts couldn’t cope. They had to be helped by money men and lawyers and marketing persons with advertising agents. From that moment, the status of the maker in this country has been in decline. And the rise and rise of marketing persons, through no fault of their own, has done nothing to help…it might even be, I think, that the erosion of our manufacturing sector, and the rise and rise of our service sector, is in part connected with the de-coupling of making things from marketing things. In other words: if you make something, sell it yourself. And so we did. And absolutely nothing went bang. Except, of course, everyone else’s market slice
    42. Although there is usually a single great development at the core of any revolutionary design or invention, I am a great believer in the autogeneration of inventions out of each other, a kind of asexual reproduction of the product gene, if you like. It is usually when you actually come to design the product that some of the most interesting things happen. The thing that really excited everyone about the DC-02 for example and got it so much press attention, even after that of the Dual Cyclone had been pretty exhaustively covered, was its ability to sit on stairs, and even to climb them.
  4. Business and Design Philosophy
    1. As often as I am asked about my design philosophy, I am cross-examined as to how I run my business. People see the numerical and financial success of the product and want to know how it was done. It is never enough to say that it is down to the qualitative difference of the vacuum cleaner, and to be fair, there may well be more to it than that. But a business philosophy is a difficult thing to distill out of the daily workings of a company, because you never really know how you do it, you just do it. It’s like asking a horse how it walks. I thought, perhaps, if I tried to explain everything we do that other companies probably do not do, then people might be able to work out the philosophy for themselves:
      1. Everyone who starts work at Dyson makes a vacuum cleaner on their first day – the idea is that everyone understands the whole product, even though they may only be working on a small part of it
      2. A holistic design approach to design – open offices plans so everyone can communicate easily and feels part of the same team, graphics and engineering people are in the geographical center of the office and that reflects the centrality of design and engineering to the whole operation, no department boundaries, freedom of movement and of expression is total
      3. Engineering and design are not viewed as separate. Designers are involved in testing as engineers are in conceptual ideas
      4. Everyone is empowered to be creative and knowledgeable
      5. No memos – ever. Dialogue is the founding principle for progress. Talk to people, they listen. Monologue only leads to monomania. Memos are also tacky, soulless, and get lost. I would rather people did less, if it means doing what they do properly, and a memo, though quicker than a conversation, is far more likely to lead to a misunderstanding.
      6. No one wears suits and ties – every company needs an image. The smaller and less established you are, the more important the image becomes. I do not want my employees thinking like businessmen
      7. A cafe, not a canteen – create a social atmosphere at work where employees find it easy to get to know each other
      8. Encourage employees to be different, on principle – very few people can be brilliant. Those who are, rarely do anything worthwhile. And they are over-valued. You are just as likely to solve a problem by being unconventional and determined as by being brilliant. And if you can’t be unconventional, be obtuse. Be deliberately obtuse, because there are 5 billion people out there thinking in train tracks, and thinking what they have been taught to think.
      9. Don’t relinquish responsibility once the sale is made – it may sound like an expensive service for us to run, but real service, like real innovation, is what people want more than anything, and people are so delighted when they discover that we will immediately send them a new machine that their call of complaint becomes a call of gratitude
      10. Employ graduates straight from university – it’s easier to teach fresh graduates a different way of doing things and enable them to challenge established beliefs, than to retrain someone with ‘experience’
      11. Meet the staff as equals, because they are – clinics where staff can ask senior management anything and also have a suggestion box for those who are more introverted and make sure those letters are always answered personally. Feedback from the floor, when it concerns production, usually centers around the quality of components fed to the line by subcontractors. It is a crucial melting pot of ideas, that enables us to share with the assembly staff our management expertise and efforts with the subcontractors, at the same time as they describe the end results of our efforts. So useful is this proving, that we have arranged, in future, for subcontractors to attend the meetings. Hope they can take it
      12. The final assembly is done entirely by hand – allows for flexibility to lengthen or shorten the line when we need to, to add or remove people, or to add new lines at a moments’ notice, chance the assembly method, change the design of the product. It does mean that we rely more than others on the skill of our assembly staff but it allows us that “can do” attitude to change that is anathema to British manufacturing otherwise
      13. We pay our staff well – pay very well and on top of it, on a weekly basis, that is subject to full attendance, as a reward for reliable and loyal staff, pay a flat premium
      14. Japanese influences – we are always trying to improve our product, take any complaint very seriously, and solve the problem. Customer feedback is our way of foretelling and directing our future, and we spare no expense in acting on that feedback. We are fascinated, to the point of obsession, with the product. It is this that allows us to maintain ownership of our product, and without it we do not have a business.
      15. Dealing with suppliers – there are 4 straightforward requirements that we have of our suppliers: that they should provide (a) what we order, (b) at the time stipulated, (c) in the correct quantity, (d) to the quality stipulated. I wish.
  5. The Ballbarrow
    1. The wheelbarrow market was a very attractive one to me at that time. It seemed relatively unambitious market, where I would not be competing against any multinational giants as you do in, say, electricals. A kinder, gentler market altogether, or so I thought. Furthermore, the fact that no one had contributed anything faintly new to it in 10,000 years (rather as the vacuum cleaner went unchanged over 100), meant that anything new, with major design improvements and innovations, would have enormous impact.
    2. The spirit of the thing, you see, was in the ball and the dumper shape – anything else would be gilding the lily. This principle is a crucial one. Just as the spirit of the Sea Track was in the flat hull, and the spirit of the Dual Cyclone is in the cyclone, so there was a simplicity about the Ballbarrow that displayed its newness and superiority and shouted its usefulness. To attempt other gimmicks might lead to a customer believing it was just the same old thing with something added. So, off came the dump facility and a twisty handle, a swift redesign, and we were ready to launch
    3. It was an interesting lesson in psychology, teaching me that the entrenched professional is always going to resist far longer than the private consumer. Many of the advantages, you see, were simply not perceived by the builder as advantages at all, for the reasons I mentioned earlier, and all the things that would make it so popular with gardeners were utterly irrelevant to him.
    4. It always seems to be journalists that are first to see the potential of a new invention, which is odd when you consider that they are not, in their nature, particularly commercially minded people. It is also the very best way of convincing the public. One decent editorial counts for a thousand advertisements. People are far more likely to believe someone who has tested something for themselves – and it is assumed that a journalist has done that. From that point on, and throughout my struggles to launch the Dual Cyclone, I made editorial comment the basis of all my thinking about publicity. As with the Dual Cyclone, so with the Ballbarrow: the establishment of a client base by word of mouth is what gives a product longevity and integrity, a sort of wise man building his house on the rock principle
    5. The Waterolla was a garden roller that instead of being a large metal drum full of concrete, was a large plastic drum full of nothing which could be filled up with water. It is the perfect example of making a product too good. Once one person got it, the whole neighborhood could easily use it and never bought another.
  1. It is in our engineers that we should place our greatest faith for the present, in that they determine the way our future will be
  2. Was a great runner when he was young and he trained differently than everyone else – he used the sand dunes in his home country to train and build his endurance. “In so many ways it taught me the most significant lessons in all my youth. I was learning about the physical and psychological strength that keeps you competitive. I was learning about obstinacy. I was learning how to overcome nerves, and as I grew more and more neurotic about being caught from behind, I trained harder to stay in front. It is a horribly labored analogy – and it is flavored with the fickle seasoning of hindsight – but to this day it is the fear of failure, more than anything else, which makes me keep working at success.” This later helped me build the confidence and the stupidity to start doing things differently not only in sports, but in academics and in business

What I got out of it

  1. Really fun and well written book with some timeless business and entrepreneurial lessons –

The Innovators by Walter Isaacson

Summary
  1. Walter Isaacson does an amazing job of taking us through the progression of digital innovations from the 19th through the 21st century. What is so impressive about this wide ranging group of people is that they were able to turn these disruptive ideas into realities, but not without teaming up with the right partners. These innovations formed the basis of the computer, Internet and entire digital revolution
Key Takeaways
  1. Innovations rarely if ever come from one person but rather draws on multitudes of existing ideas and weaves them into new patterns
  2. The goal now is not to replicate human thinking in machines but to work in symbiosis to reach better results using both our strengths
  3. Innovations are always collaborative and often more evolutionary than revolutionary 
  4. Collaboration between thousands or millions of people who might not know each other at all is the closest thing to a revolutionary idea that has come out of the digital revolution
  5. The combination of liberal arts and technology is where our future lies and why Apple has been so successful
What I got out of it
  1. I found this book engaging and easy to follow even though it gets somewhat technical at certain points. It is beautiful to see how men stand of the shoulders of giants before them and build off of their brilliant ideas. As Isaacson says repeatedly throughout the book, innovation never happens alone, is a combination of old ideas and most often are evolutionary rather than revolutionary

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