Reflections from San Francisco

I was in San Francisco and Silicon Valley last week working with a French Business School.  As part of the week we had behind-the-scenes meetings with representatives from Orange, Slack, Twitter, Google and IBM as well as a number of incubators, hacker spaces and “garages”.  A big thanks to everyone who shared their time and their thoughts. The following are a few insights that are drawn from the whole week (and within the terms of the NDAs I signed).

1. The Hype Curve has shifted its focus from Big Data to AI and Machine Learning.  Almost every person we met is harnessing the power of algorithms to tame data and consumer insights to provide the next big service from Oncology to Agribusiness.
2. Big  traditional companies find it difficult to innovate unless, like some we met, they separate innovation from company strategy; at least while they are innovating.  Without this separation it becomes impossible to pursue the big valuable idea.
3. Large companies need to work to three different timescales with some projects focussed on very short term insights and results, some on 1-2 year progress and a few on very big audacious “game-changers”. One industry leader said that the days of open ended losses were over within their organisation with clear demonstrable progress expected within 6 months.
4. Getting together with other companies to think about innovation beats trying to get there on your own whether you are a small start-up (who really needs to be in a co-working or incubator space) or a traditional MNC (who needs to find a network of like minded companies with which to pursue the possibilities of Blockchain, chat interfaces, deep learning or next generation VR).  This clustering of intelligence, people and money is the single biggest advantage of the Valley.
5. Every company in this region is a tech company even if elsewhere in the world they make airplanes or shoes or sell dishwasher tablets.  Reimagining your organisation as a platform for other businesses is key. This is the central importance (and value) of companies such as Lyft or Uber who are not just taxi replacements but potential platforms for all sorts of logistics and delivery services.
6. Without a clear purpose it is hard for customers to believe in you.  This came across again and again even among some of the established digital players who are not content with past successes but need to redefine themselves to make it clear why they deserve to continue to survive.  I last came to the Valley 18 months ago and this time there was less taking success for granted than during my previous visit.
7. Along with AI, Blockchain will drive changes to all sorts of businesses with decentralised models of trust and authority affecting contacts, ownership, IOT and supply chain as well finance and payments.
8. There is a huge variety of company cultures and organisational structures in the region with no single model such as Holacracy or Lean emerging as dominant.  Everyone talked about the importance of learning (failing fast) organisations with highly motivated teams of talented people (mainly engineers) but how they are motivated and how they run projects differs more widely than I expected.
9. Design thinking however appears everywhere as “how innovation happens” with customer centricity, ideation, prototyping and user testing as guiding principles for almost all of the companies we met.  It was interesting how some of the largest most traditional companies we met had embraced this so thoroughly even producing their own versions of the process.
10. And AI!  It takes time to train algorithms (15,000 hours in one instance) to produce intelligent “experts” but once done they are able to operate above the level of their human team (especially when working alongside their human team). Lots of interesting discussions around the ethics of knowledge ownership.

All in all a very worthwhile trip and I come back enthused to teach and explore more software as well as help more companies make sense of these ideas for themselves.