The following is an excerpt from the book, Blue Goldfish:
We are entering a new era driven by technology. A time that MIT’s Erik Brynjolfsson and Andrew McAfee call the Second Machine Age. We are now on the cusp of a time where business can start to leverage the advances in computer processing, artificial intelligence and networked communication. An example of this is Waze. The app allows users to access maps and driving directions. It also provides up to date conditions, allowing the driver to navigate swiftly and safely. It can do this because each road map has been scanned into the database, but also because every cell phone transmitting from every car will reveal where the traffic jams are.
It took several decades for earlier breakthrough technologies, such as the steam engine or electricity, to reach the point of ubiquity and flexible application in the first machine age. Once they did, both fundamentally changed the way people lived and businesses operated. Information technology and digital communication are now just reaching that same inflection point.
The big winners in this new era will be consumers, who will be able to buy a wider range of higher-quality goods and services at lower prices. The other winners will be those who create and finance the new machines or figure out how best to use them to gain competitive advantage. Great wealth will be created in the process.
It’s Been a Journey
We didn’t get to this inflection point without innovation over the last 50+ years. Let’s look at some of the major breakthroughs over that time. Here is a slideshare on the journey:
1961 – The silicon chip was invented by two American electrical engineers, Jack Kilby and Robert Noyce. Their creation revolutionized and miniaturized technology and paved the way for the development of the modern computer. Until the chip was invented, most electrical devices were constructed using bulky, power-hungry vacuum tube technology. The development of transistors partially solved the problem but these still had to be wired to circuit boards. Kilby and Noyce hit on the solution almost simultaneously, combining separate components in an integrated circuit made of a semiconductor material. Intel founder Noyce, working in Palo Alto, California, favored silicon and can thus be credited as the man who put the silicon in “Silicon Valley.
1964 – Roger Easton begins experiments that lead to the development of GPS (global positioning system), a ubiquitous feature of modern life. What began as a way of tracking satellites like Sputnik became a way for satellites to track us here on the surface of Earth.
1967 – Graduate student James Goodnight joins a project at North Carolina State University. The goal was to create a statistical analysis system (SAS) used by agricultural departments at colleges and universities. In 1976, SAS Institute becomes an independent, private business led by Goodnight.
1969 – Neil Armstrong becomes the first person to step onto the lunar surface of the moon.
ARPANET (Advanced Research Projects Agency Network) headed by J.C.R. Licklider is launched. Licklider’s idea of an intergalactic computer network, where everyone on the globe is interconnected with the ability to access programs and data at any site, from anywhere, begins to take shape.
1970 – Gordon Moore coins Moore’s Law, a computing term which states that processor speeds, or overall processing power (the number of transistors on a CPU) for computers will double every two years.
1973 – The Xerox Alto personal computer is developed at Xerox PARC. It becomes the first computer to use the desktop metaphor and mouse-driven graphical user interface.
In the same year, the world’s first mobile phone call was made when Martin Cooper, a senior engineer at Motorola, called a rival telecommunications company and informed them he was speaking via a mobile phone. The phone Cooper used, if you could call it that, weighed a staggering 2.5 lbs. With this large prototype device, you got 30 minutes of talk-time and it took around 10 hours to charge.
1975 – The first personal computers were introduced. The MITS Altair 8800 was followed by the IMSAI 8080, an Altair clone. Bill Gates and Paul Allen wrote a BASIC compiler for the Altair and formed Microsoft.
1976 – Steven Sasson, a 24 year old engineer at Eastman Kodak invents the process to make digital photos.
A couple of other Steve’s, Jobs and Wozniak, launch the Apple I. As Apple’s only “kit” computer, consumers need to add a keyboard, power supply and enclosure to the assembled motherboard around the 6502 processor.
1978 – Dan Bricklin and Bob Frankston introduce VisiCalc. The first electronic spreadsheet, it turned the personal computer into a useful business tool, not just a game machine or replacement for the electric typewriter.
1982 – The first thing (as in internet of things) connected to the internet was a Coke vending machine at Carnegie Mellon University. Programmers connected to the machine over the Internet, allowing them to check the status of the machine and determined whether or not there would be a cold drink awaiting them should they decide to make the trip down to the machine.
1983 – On a boat trip to Catalina Island in 1983, five marketing professionals conceived an electronic alternative that would transform the retail landscape.The solution involved using grocery scanners to distribute targeted coupons. Catalina Marketing was born. Catalina created a single solution–the Checkout Coupon–benefitting retailers, brands and consumers.
1983 – Motorola releases its first commercial mobile phone, known as the Motorola DynaTAC 8000X. The handset offered 30 minutes of talk-time, six hours standby, and could store 30 phone numbers. It cost nearly $4,000.
1989 – Tim Berners-Lee, a British scientist at CERN, invents the World Wide Web. The web was originally conceived and developed to meet the demand for automatic information-sharing between scientists in universities and institutes around the world. The first website at CERN – was dedicated to the World Wide Web project itself and was hosted on Berners-Lee’s NeXT computer. The website described the basic features of the web; how to access other people’s documents and how to set up your own server.
1990 – Quantum Computer Services, Inc., introduces Promenade, an online service that will be offered with the IBM PS/1 computer. home computer has been introduced with a built-in modem and online services to provide families immediate access to live, interactive education and entertainment services. Quantum Computer Services eventually became America Online.
1991 – Linus Torvalds invents Linux. Torvalds, a student at the University of Helsinki in Finland, begins writing his own kernel. He started by developing device drivers and hard-drive access, and by September had a basic design that he called Version 0.01. This kernel, which is called Linux, was afterwards combined with the GNU system to produce a complete free operating system.
1992 – Neil Papworth, a 22-year-old test engineer for Sema Group (now Airwide Solutions), sent the first text message on December 3, 1992, from his personal computer to the Vodafone network to the phone of Richard Jarvis. The text message read “Merry Christmas.” AT&T would be the first to offer the service in the US in 2000.
1993 – CERN puts an updated version of World Wide Web software into the public domain. CERN makes the release available with an open license to maximise its dissemination. Through these actions, making the software required to run a web server freely available, along with a basic browser and a library of code, allowed the web to flourish.
1994 – Katie Couric and Bryant Gumbel infamously stumble when confronted with their first email address on the Today Show. Bryant Gumbel asks “What is internet, anyway?”
Jeff Bezos incorporates “Cadabra” on July 5th. A year later he changes the name to Amazon after a lawyer misheard its original name as “cadaver.”
1995 – Amazon.com goes online.
Pierre Omidyar auctions off a single broken laser pointer via a site he’d developed, AuctionWeb, to see if it would sell. To his surprise the item sold for $14.83 and an idea was formed. The company was soon renamed eBay, short for Echo Bay, the name of Omidyar’s consulting firm. eBay’s vision for success transitioned from one of commerce—buying and selling things—to become something far more significant. It thrived because it placed customer data being at the heart of the business from its inception. “eBay was one the first websites of its kind and by giving people a high level of bargaining power it completely democratized ecommerce. eBay has pioneered an ecommerce marketing revolution, particularly when it comes to utilizing customer data in order to deliver a more engaging, seamless online experience. From day one they’ve used customer data to improve platform experience and they’re only getting better at contextualizing their data sources. Its lesson to the internet has been that success comes from continual data innovation.”
1995 – Google begins as a research project by Larry Page and Sergey Brin. Both are Ph.D. students at Stanford University.
1999 – Kevin Ashton coins the term “the Internet of Things” (IoT) while working at Auto-ID Labs.
Oracle executive Marc Benioff invites three friends to his San Francisco apartment. His business idea gets a lukewarm response. Co-founder Dave Moellenhoff doesn’t sugarcoat it, “You’re an idiot. That’s the stupidest thing. This is never going to work.” The group presses forward and launches Salesforce, one of the first enterprise cloud software services in the world. The company pioneered the concept of delivering enterprise applications via a simple website.
2000 – Confinity and X.com merge in March. The combined company becomes PayPal in order to sync up the name of the company with the name of the product.
The United States stops intentionally degrading GPS signals available to the public. Originally developed by the Department of Defense to aid the military, the satellite-based system provides location and time data to users. In announcing the discontinuation of the feature that deliberately degraded the signal, the White House said in a statement that civilian users of GPS would be able to pinpoint locations up to 10 times more accurately than before.
2001 – A free user-generated online encyclopedia called Wikipedia comes online and quickly becomes the reference site of choice for Internet users.
2002 – Internet Archive search director Doug Cutting and University of Washington graduate student Mike Cafarella begin building Nutch. Over the course of a few months, Cutting and Cafarella build the underlying file systems and processing framework that would become Hadoop.
Amazon launches Amazon Web Services, a suite of cloud-based services including storage, computation and even human intelligence through the Amazon Mechanical Turk.
2003 – 500 million devices are connected to the Internet. One device for every 12 people on the planet.
Chris Stolte and Pat Hanrahan invent a technology called VizQL™ at Stanford. VizQL attacks a basic business problem: making databases and spreadsheets understandable to ordinary people. Now, visualization is part of the journey and not just the destination. Fast analytics and visualization for everyone becomes the basis for the founding of Tableau.ne was born.
Scientists announced that they had sequenced the entire human genome two years ahead of schedule. The 13-year international project set out to identify the 20,000 to 25,000 genes in human DNA.
2004 – 19-year-old Mark Zuckerberg launches thefacebook.com in his dorm room as a Harvard sophomore.
2005 – YouTube is founded by former PayPal employees Chad Hurley, Steve Chen, and Jawed Karim. The idea was born at a dinner party in San Francisco the year before, The inspiration was two key events that year: Janet Jackson’s wardrobe malfunction at the Super Bowl and a devastating tsunami in the Indian Ocean.
2006 – Doug Cutting begins working at Yahoo. They spin out the storage and processing parts of Nutch to form Hadoop as an open-source Apache Software Foundation project. Why Hadoop? It was named after Cutting’s son’s stuffed elephant.
2007 – The first iPhone was released combining the internet, a cellphone and an iPod into one device. In 74 days, Apple sells 1 million iPhones.
Waze is founded. The Israeli and Palo Alto-based company is a developer of free mapping and turn-by-turn navigation apps for iOS and Android devices.
Sitting in Zeke’s Sports Bar, Tom Preston-Werner shares an idea with Chris Wanstrath, “I launched into my half-baked idea for some sort of website that acted as hub for coders to share their Git repositories. I even had a name: GitHub.” Fast forward less than a decade later, GitHub is how people build software. With a community of more than 12 million people, developers can discover, use, and contribute to over 31 million projects using a powerful collaborative development workflow.
2009 – USAA, a privately held bank and insurance company, becomes the first company to introduce the mobile check deposit feature, which requires a customer to photograph both sides of the check with the phone’s camera. With just one branch, in San Antonio, and customers deployed all over the world, the company has been aggressively developing an anytime, anywhere banking strategy.
Al Gore makes his infamous claim in a CNN interview, “During my service in the United States Congress, I took the initiative in creating the Internet.”
Web 2.0 hits its stride. Google offers browser-based enterprise applications, through services such as Google Apps.
2011 – The Oxford Dictionary added the common texting acronym “LOL” (laughing out loud or laugh out loud) to its official listings.
2013 – Out of the world’s estimated 7 billion people, 6 billion have access to mobile phones. Only 4.5 billion have access to working toilets.
2014 – Intel and its partners announce that they will begin commercial production of its 800 gigabit per second optical network cables, based on technology developed in its Silicon Photonics lab.
2015 – Amazon surpasses Walmart as the most valuable retailer in the United States by market capitalization.
Barclay’s release a report that Hortonworks, a Hadoop based company, is expected to become the fastest growing software company ever. The company is slated to reach $100 million in annual revenue in just four years from its inception.
The average person unlocks his or her smartphone 110 times each day.
When these innovations from the last fifty years are listed out across several pages, two facts come into sharp focus. First, the rate of innovation is ever increasing. What would seem like a giant leap fifty years ago appears more like a small step today. Second, these innovations are changing the average consumer. Going from a world where connected technology is mostly a dream to such ubiquity where more humans have mobile phones than access to working toilets is nothing short of impressive.
As you consider the journey, there’s no doubt that consumer expectations have changed–we’ve forced them to change with each innovation being faster, smaller and more accessible than the last. The same expectations apply to your business.
Customers expect faster response times, shorter wait times, more value and less cost all at once. The companies who figure out how to serve this modern consumer will thrive. And the others? Their days are numbered.
Blue Goldfish highlights those companies doing the former, using technology, data and analytics to improve customer experience. Technology brought us these increasing expectations and it’s the only thing that can save our businesses from them.
Today’s Lagniappe (a little something extra thrown in for good measure) – Here is Andrew McAfee talking about The Second Machine Age: