Removing Impediments

I believe I’m at the end of theoretical and big-picture strategy points that I wanted to make, and anything after here will be more tactical in nature, and just working opinions of mine on ways we could proceed.   I’ll ramble on for a few days on loosely related topics, and then share a few specific innovation ideas I have and stumble through some analysis of those to see if we can poke holes in them, or maybe some will actually float.

There are a few societal aspects we could address to make entrepreneurship easier to undertake, either by removing impediments or creating supports.  Let’s start with removing impediments.

Today, many start-ups are staffed by young people, those with access to private funding, or those retiring.  Why?  Young people with few obligations can take the chance to make it big without losing too much.  Those with access to money can of course do the same at any age, though often that means much of any upside goes to the investor, and my hope is we devise a more egalitarian approach than today’s VC climate.   Retirees have a source of income to survive on, and importantly, also have medical insurance, so turning 65 is actually a common start-up entry point. 

Let’s hit this point squarely:  medical insurance is a problem.  It’s a problem for the nation, for our state, for individuals, and certainly for the self-employed and small-business owner, which are exactly the sorts of people we want to have more of.  Medical care is too expensive for everybody, and many young people take a chance and simply don’t have any; while we want to sift for risk-takers, this isn’t the rational sort of risk-savvy behavior we want to encourage.  For individuals starting their own business, options are more expensive still.  I think for this idealistic tech-topia, one of the small-bets experiments we need is for medical, perhaps something like:

-          A group plan for catastrophic-only coverage, which should be reasonably affordable, especially for young people, which will be the bulk of our entrepreneurs.  Tie to memberships in a local incubator or part of a city-associated start-up program, and have the city negotiate the terms and manage the risk-pool.

-          A local physician, or perhaps a minor care facility, onsite for the co-working premises.  Members go for free, and for “outsiders” it’s just a normal visit.  Maybe one of our larger, more visionary philanthropists could fund the facility construction and first-year costs?

As for funding, perhaps as a state we could help organize and facilitate entrepreneurial survival.  As a society, it would be good if we made it easier for people to start small businesses – it’s part of our self-image of the American Dream (isn’t all of this?), yet the path isn’t clear or easy, and to some extent needlessly so.  It’s hard to envision income support at the city level, but we already do this at the state level, so it would seem logical to start there.

One of the authors I read, perhaps Ries, suggested that rather than only paying unemployment to the recently unintentionally unemployed, we could also choose to pay entrepreneurs similarly, at least for a period of time; after all, if we consider it reasonable to help support some workers, why not include start-up workers?   Maybe this is something OCAST could help with?

Tulsa already has co-working/incubator programs, and with any success these would need to grow.  Beside the space, data networking, basic office supports, an important function of such facilities is access to people, and a place for entrepreneurial thinkers and supports to interact.  Even if you have drive, ambition, and a great idea, you will need practical advice from lawyers, accountants, IT experts, and probably a host of other specialists that larger companies have in-house but individuals and small-business have to find outside.  A new enterprise may have only a few individuals who simply have never had to find such services, and one of the “networks of people” we talked about earlier should be a local ecosystem of support services.  Of course these could be start-ups and entrepreneurs too, part of the same overall programs.

Clinking and Drinking

Many of you are no doubt familiar with Malcolm Gladwell, and sometime earlier in this thread we briefly talked about the roles of Connector, Maven, and Salesperson.  We also talked a lot about the inherent importance of networks of people inside businesses, government organization, and educational institutions to the overall economy of an area.  And we talked about Dunbar’s Number and the notion of limits to personal interactions.

Of course most of us aren’t 100% examples of any of Gladwell’s categories, notwithstanding that there are probably more minor roles and subtypes.  Still, I think there is some additional insight we can suss out of Gladwell’s personalities as they apply to networks of people.

Let’s say we want to drive change in our metropolis, in some meaningful way.  We know it will take action and commitment be various people, most of whom we don’t yet know.  We know it will take lots of discussions, including marketing the approach.  I’m pretty sure it’ll take some sharp people and application of technology as well, and some coordination of all the above.

We all also know why this will be hard to accomplish, as various layers of misunderstanding, cross-purposes, politics, inertia, and competing priorities will contribute viscosity to the process.  Undoubtedly each of us has examples from our work lives of committees and groups that struggled to attain success even in a more focused environment.  So why is this?

Part of the reason any such project goes slowly is that for each added stakeholder there is an intellectual on-boarding phase before they can contribute their skills, and with each added stakeholder there are more interconnections to manage as well.  One way to think about such a problem is the “clinking and drinking” aspect of a happy hour.

Let’s say we’re having a reception, and each person who comes in has to pour a drink, introduce themselves to each of the previous participants, and clink glasses before they can settle down to chat and drink.  If you start with four people at a table, it goes quickly as all can say their names in quick succession, do a 4-way “cheers” clink, and get down to drinking.  For our example, this is pretty much what Mavens want to do – skip much of the people problems and get down to business.

As more people come in, though, the pattern changes.  When the 21^st guest arrives, they have to shake hands with 20 people, clink 20 drinks, and then find a spot at a table.  Plus, by now each of our professional drinkers who just wants to imbibe will have been interrupted for an introduction 20 times as well.  By the time the 90-100^th participants arrive, everybody will be spending more time clinking than drinking. 

Of course in real-world situations the team-building and on-boarding phase (“clinking”) of a project and the development or operations part of doing the work (“drinking”) overlap, and for some people their whole job is really more about people and they are professional “clinkers”. 

For any major effort, building the team is part of the struggle, and getting the structure of the organization right is a component of that effort.  It doesn’t matter if the broader team is built of volunteers, politicians, teachers, entrepreneurs, or technologists; the team will still need some sort of structure.  A good team structure promotes clarity of goals, coherent and concerted action, reasonably good efficiency, and good feedback loops (accurate and low delay).    This is not at all easy for most people, including most executives (or even most militaries), to accomplish, and many of us know what poor teams are like, with uncertain and contrary goals, inconsistent and cross-purpose actions, poor visibility, and a general feeling of slogging through mud.  This latter case is what we want to avoid, and yet it’s an ever-present risk for a broad initiative that involves multiple bureaucracies.

Cluster Mapping Tulsa

First, a hat tip to Fred Emmer for his excellent pointer to the data available on the Cluster Mapping Project, for Tulsa and many other regions and municipalities.

It is well worth taking a few minutes to browse all the Tulsa information, as some of the data was (at least to me) unexpected. Here's a link:
http://www.clustermapping.us/…/…/tulsa_ok/cluster-portfolio…

With a little more work to compare data from Cluster Mapping to the Economic Complexity data, it should be fairly easy to see where Tulsa can build on existing strengths to gain greater success.

A few points I noted:
- Tulsa is low-cost for most of the areas that it's good at. There should be room to market this to gain share against higher-cost areas, and it should be possible to raise wages over time as well.
- Tulsa is near the top of oil and gas technologies, wage-wise. We're leaders in this area (no big surprise), but it is unlikely to be an area of massive growth in wages. We're going to ride the tide of oil and gas production, and should continue to surf the leading edge, but really our goal should be to get this good at other areas.
- Overall, we don't spend enough on R&D. We're a manufacturing shop, not a design shop, relatively speaking. Look at the rankings (bottom quintile) for federal R&D dollars, R&D spending in general, and venture capital spending. Yet we're second quintile for high-school grads, BS degrees, and patent filings. We're bottom quintile for doctorates, and for international trade.
- Things we're good at, and getting better at, tend to be production related - O&G production, heavy equipment production, trailer production. A bright spot is aerospace vehicles.
- Things we're not great at, and struggling with, despite still having good wages and reasonable employment, include financial services, information technology, and general business services. These are areas we could probably still leverage.

To me, the strategy is obvious: for business areas where we have success already on the production side, we should climb up the ladder to capture design expertise, and the higher-precision aspects of production (such as tooling). We should target those areas where there is wage arbitrage to leverage, where global economic complexity indicates there is value to be had, and where we have the ability to grow the skill base. Most importantly, we must strive to create an agile workforce that is well-adapted to the evolving technologies and shifting needs of the next decade.

We also need to get a better share of the Federal R&D dollars. This is probably an area that our state and local business dev'p people could help facilitate on both the small-scale startup side and the large-scale defense contractor side. We probably have some of the contacts from doing aerospace production; we need to start doing some of the related design projects.

The "product" side of things doesn't seem too hard. Maybe the trickier issues will be "people" -- building the resource base, and "processes" -- the sort of organization and structure to foster innovation.

Strategy and Luddites

It's been a while since I posted on the thread of technology strategy for Tulsa....I've been otherwise occupied, and somewhat lazy, with the holidays.

So, let's recap a bit. As the basis for our strategy, we need to decent vision and a good understanding of our current situation. Some will say I'm fond of pointing out the obvious (and I am), but when it comes to comprehending current reality it is actually not as straightforward as it may seem. Not only are facts and accurate quantitative information hard to come by, but we each view things through our own filters and beliefs.

Think back to the days before smartphones, cellphones, and the Internet -- it's harder than you think to recall how you'd go about arranging a trip out of state, to find a reputable dealer of some unusual item, or to check up on kinfolk. Once, not so long ago, all of these items were novel and exciting inventions that stretched our minds and challenged our habits, but now that we've adapted it's not easy to think the way we once did.

This is exactly the point I made early on about a shared lexicon -- the terms, concepts, and though patterns -- upon which to consider innovations. With too much common experience we could fall into group-think and a like-minded echo chamber. With too little, we will struggle to communicate accurately and efficiently. More importantly, though, without a common mindset or technology worldview we won't look at our situation from a similar perspective, and it will be very difficult to articulate and believe in a strategy that builds upon our current state to get to where we want to go.

For those who are already a ways along a technology path, say as an early-adopter, it is hard to embrace the concerns and misgivings of those lagging behind, and for the uninitiated it's hard to envision the same future as the visionaries.

Which brings us to the Luddites (no discussion of tech revolutions can be complete without bringing up Luddites!), and their approach to avoiding a technological future that didn't seem palatable. It's popular of late, with our techie advances of the 20th and 21st centuries, to dismiss the Luddite concerns, but in actuality they were valid -- technology disruption in the long term does not impair employment, but it DOES destroy professions.

And that points out a need for our strategy: not only must we plot a course for skills, technology, and employment that focuses on increasingly-competitive-value products, but we must foresee and avoid areas that will become fading backwater eddies as technology marches on. It's not that the Luddites were wrong in their assessment of their situation, but their approach to the future was wrong; they should have focused on retraining and innovating to exploit the evolving technology.

That's what we need to do, too. We need to focus on embracing the future and re-training and re-skilling to not only meet it head-on, but to facilitate its evolution and bend it to our liking. More on that next time.

FabLabs - Great but Not Everything

FabLabs – fabrication laboratories – including ours, are great, but they also aren’t everything.  Many FabLabs, perhaps most, are associated with institutions of higher learning, often tech colleges or junior colleges.  Ours is more free-standing, and from what I understand it is more centered on youth education than most.  All in all, this is probably a fine role as the earlier you can get kids to take chances on technology and on making things with their hands, the better.  This is doubly true for girls.

However, FabLabs for older teens and adults have a place as well, and ours probably doesn’t do quite as well as some that are aligned more with tech schools that can teach and reinforce the more advanced skills.  Still, I think all the FabLabs are missing a component that I and my friends always had while we were growing up at our houses:  junk.  Junk is a critical component as it provides material for experimentation, learning, and invention.  Unfortunately it’s also an eyesore and will run afoul of just about any HOA.  I think for teens, and probably for adults, a strong FabLab experience would include:

-          Free access to tools, with training on-site for those that require skill, and some supervision to keep things organized and in good repair.

-          Junk and raw materials, available for free or at least cheaply.   The wider the variety, the better.  A local junk pile, access to a junk yard, a supply of stock goods, and access to a hardware store would all be helpful.

-          Free or cheap consumables:  wire, solder, welding gas, rods, glues, tape, paint, etc.

-          Not much oversight or rules, with just enough rigor to keep things safe.

None of this needs to be very expensive, but it will take some monetary support.  I wonder if a cluster of related labs, say one for woodworking, another for metalworking, another for electronics, another for 3D printing and cutting, etc., each associated with a TTC or TCC lab, and with some oversight by a teacher or knowledgeable retiree, would work.  Again this would cost some money, but around here teachers are used to not being paid very much, and some sponsorship is reasonable.  After all, many companies are willing to pay recruiting fees and relocation costs for solid tech employees, and for the cost of couple such hirings a lab manager could be funded for a year, helping to grow a local supply and to point our those students with the best aptitudes for a given company’s needs.

The next step up from that is shop businesses, for outsourcing fab services for customers who need it.  I think this is much the thinking behind the Rawspace concept, fostering such businesses as startups themselves, with support from local customers.

And this now brings us around to the topic of Makers.  The term is popular, and vague, but really Makers are just people who build stuff, as professional craftsmen, skilled trades, hobbyists, and home crafters have for a long time.  The new take on such activities is that in an increasingly commoditized world of cheap mass-market goods built by automated machines and robots, there is a shrinking need for blue-collar workers.

Despite rhetoric to the contrary, the problem isn’t that jobs all went to China (though some did), but that so many jobs can be done better and more cheaply by robots.  Today, the US produces more than ever before, yet the blue-collar workforce is a fraction of what it once was.  The potential counter to such trends is bespoke, custom manufacturing, the one-size-fits-one paradigm, where those with sufficient means will pay extra to get higher-quality, personalized products of all sorts.  Plus, large-scale manufacturing struggles to address small product niches, and the low-cost-leader tends to push towards lower quality as well as lower costs.  Small scale Makers, either individually or in small-business shops, could address such niches at various price/quality points, and innovate to create new offerings and better variety.

Besides the points above about quality of a local FabLab and networking with local institutions and organizations, a FabLab network would be beneficial as well.  The equipment for a FabLab is expensive, and there is no reason each needs to replicate the same equipment beyond the common tools for skills training and basic fabrication.  For example, there is a FabLab in Independence KS, another in Wichita, and other nearby in Fayetteville, Muskogee, and OKC, all within range of day-trips or easy shipping.  If the one in KS gets a 3D metal printer for aircraft parts, the one in Tulsa has good 4D or 5D mills, and the one in OKC has a welding robot for tubing frames, then the collective value will be greater than if all chase the single latest and greatest tech widget. 

Today, there is an association of FabLabs, so some of this thinking is probably underway.  I’m not involved enough to know if they have gone so far as to create and share a regional vision and have active reciprocity and joint projects to spur personal networking.  This brings up an important point:  visions should be fractal and overlapping, not contrary, if the regional entities are going to be able to get support from state organization, who will in turn have an easy time finding support for local projects.  We all need to be heading the same way if we’re going to build virtuous cycles with speed (I guess this would then be angular momentum?).

Climbing the Ladder

It would be great if we had the depth of information about the product exports of Tulsa that we have, say, for Italy.  If we did, we could build a map like this:

http://atlas.media.mit.edu/5v607m

And, for each product on that diagram we could readily double-click to see what countries imported them (the customer base), and who else exported them (the competition).  Of course, we’d also want to know for each product what the relative economic complexity would be; that is, which products bring high-value to exporter, relatively speaking.  All of this information is available for countries, and that’s a good think IF you have a government who pays attention to such things and creates meaningful policies and incentives based on intentional goals.

Unfortunately, as far as I know there is no such dataset available at the state or city level, and honestly I don’t see much in the way of analysis and intentional goals at the national level.  So, we could wring our hands and lament our situation, or we could convince Hidalgo and his crew to convince states and cities to collect info and undertake a study for us, or we could take action locally and do something different, but along the same lines of thinking.  To me, this last notion seems more likely to bear fruit.

Perhaps a distributed, crowd-sourcing approach would work well enough?  If a city team wanted to devise a strategy for the metropolis overall, then getting input on all produced products (those consumed internally as well as exported), a marketing campaign to get feedback from the community – all those employees, customers, vendors of the firms in the city – could probably provide enough data to be useful.  For all I know, there could be such a database already, as a census of the economic makeup of the city. 

But even if there isn’t I think an even more distributed model could still work.  If each firm or individual just looked at his environment and purposefully decided to climb the ladder in their industry, progress would ensue.  For example, we could make a few simple rules or guidelines:

-          If we consume a product but don’t build the product, look into building it.

-          If we build a product but don’t design the product, consider designing it.

-          If we build a product and envision growth, see if we could train for it.

-          If we design a product but don’t teach the design skills, consider educating for it.

-          If we do something open loop, consider instrumenting the process.

-          If there is data in the process and it isn’t collected, collect it.

-          If there is collected data that isn’t much analyzed, see what can be learned from it.

-          If there are processes that require manual human work, see if it can be automated.

-          If there are devices that are smart, but mute, add communications.

I’m sure there are similar thought patterns that could apply to software-centric, biological, chemical, and other areas.  In fact, I’d say it’s a truism for technology today that ANY climb up the ladder will require savvy software programming, and probably have an opportunity for AI or other analytics as well.  It is a safe bet that we’ll need more training and specialization in cloud storage, Hadoop-scale databases, fog computing, Watson-style analytics, Google TensorFlow-style AI, and web-based user interfaces for all of it.

Resources to Leverage

You may recall that Hidalgo, as part of his country analysis, profiled various countries as to their GDP and economic complexity, and predicted which had immediate upside potential.  Based on historical analysis, China, Korea, and Singapore started with fairly high complexity and low GDP, and these countries were expected to grow in GDP and indeed they did.  In fact, they were part of the “Asian Tigers” growth phase, both before and after Hidalgo’s first study.  Interestingly, though, several other countries – Brazil, Indonesia, and Turkey – also grew, despite starting from a much lower complexity and GDP point. 

Interestingly, China only started growing after it’s reforms began, illustrating the importance of “good enough” government structures.  Turkey enjoys a strong relationship with the EU, and Brazil and Indonesia have energy resources, but all did a good job of leveraging their opportunities.

The original study also points out some novel relationships between products, including some clustering of related products.  In the early years, 50 years ago, electronics was a niche cluster of products, somewhat isolated from the rest; today, electronics is a large cluster intertwined with many other products.  This of course makes sense,  as electronics was a technology that started on the fringe but was one of those high-order innovation remixes across other areas. 

On the flip side, oil started as a local cluster, even though 50 years ago oil was already a mature industry; today, it’s still a separate cluster.  Oil does not seem to be the sort of technology that readily mixes into other product sectors.  Combining this with the historical “curse of oil” perspectives, I think this provides a cautionary note for Oklahoma and Tulsa, in that we would do well to look at oil as a fortunate windfall but also a one-trick pony, and perhaps we should strive to diversify our technology base.  I’d assumed that Texas had already done that, but their top-5 isn’t much more impressive than Oklahoma’s, though banking is a notable asset.  Again, we’d need to dig much deeper to get a full picture of their economy, though.

Anyway, let’s get back to Tulsa.  We already have some pretty good resources that could be readily aligned to push in worthwhile directions; in fact, probably a decent pitch would probably be enough to tilt their support significantly, we’d just need to be convincing.  Such resources include:

-          36 Degrees North – a cool co-working and start-up support space downtown, 36 Degrees is mostly a software-centric organization supported by a range of philanthropists.  It’s perhaps the best techie space in Tulsa.

-          FabLab – a tech shop just east of downtown, FabLab provides members with access to a number of high-tech tools for creative use, like 3D printers, wood mills, vinyl cutters, and basic electronics equipment.  Today it mostly support youth outreach and teaching, but that’s got to be part of a long-term vision for anything STEM related.

-          I2E – A state supported group, I2E provides space and funding for startups with a pretty solid business pitch.  They work with local investors, but last I worked with them they had yet to find their perfect niche.

-          OCAST – the state group that funds I2E, they also provide funding for interns and other science ventures across the state. 

I’m sure there are others I don’t know about, and still more that sound promising but have yet to get off the ground (like Scott Phillip’s Rawspace). 

So, what’s the point, you might ask?  To have success we’re going to need to turn up the annealing temperature, and get people jumping a little further in their thinking than has been the historical norm.  We need to get a lot of ideas funded, and then let the market weed them out.  We can’t be paranoid about wasting money, as it’s going to be a statistical thing, and just like VCs in Silicon Valley we need to trust that the few big wins will more than cover the many little losses.  In short, I believe we should combine four key ideas:

-          Increase the annealing temperature of our innovation, pushing entrepreneurs to take a bit more risk than they normally would, and making more technology and market ideas available through networks between our local institutions and neighboring high-value cities.

-          Leverage the Lean Startup ideals of small bets, with intentional market experiments and value accounting that emphasizes customer value growth rates and other second-order metrics more than income.

-          Bias for success by seeking adjacencies to high-value products that Tulsa already produces, including both physical products and virtual products like software and algorithms in the mix.  Detailing these will be a good bit of work.

-          Specifically seek success for several distinct areas of the economy:

o   The hands-on build/craft/trade side that includes traditional blue-collar attributes and middle-class hobby-craft as a base (bespoke one-offs, custom items, Maker sorts of creations, etc.)

o   High-value professional jobs making high-tech products, artificial intelligence, Watson analytics, cloud data hosting, Internet of Things widgets, and so forth.

o   Bulk mid-level techie jobs centered on software, user interface/web development, and basic networking and troubleshooting skills.

In the next day or two I’ll finish up with a few thoughts on how we might go about the detailing and planning process, some areas I think we need to work on to make turning the crank of innovation easier for entrepreneurs and existing companies, and a few other loosely related notions that I believe in but for which I have yet to rigorously develop support.