2010-6-17 jw graham talk

Google Confidential and Proprietary 1

(Re)Inventing the Way the World Works

Some Observations on Innovation

Steven WoodsGoogle Entrepreneur

Google Confidential and Proprietary

Overview

• A bit of an discussion about what innovation is, versus invention, insight

• Composing inventions as part of big idea generation

• The Innovator Dilemma and opportunity

• 9 Ideas about innovation at Google

• The Innovation Cycle and 4 real-world examples

• Lessons to apply – how Google fights the Innovator Dilemma

• The culture we are trying to build for innovation at Google in Waterloo

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Ideas & Invention across a Varied Career

A career of alternating research & industry

• Programming and Games – invention at a young age : “Space Invaders in 3.5k”

• M.Math – Hierarchical Planning (Search – theory, experiments)

• Industry – Hierarchical Constraints (Search – experiment, applications)

• Ph.D – Hierarchical Constraint (Search – theory, experiment, applications)

• PostDoc – Applied HCSP (Search - experiment, applications)d

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Ideas & Invention across a Varied Career

A career of alternating research & industry

• Industry – Applied HCSP (Search – domain: architectural compliance/check at “make”)

• Startup 1 - Information organization, access and consumer experience – myriad of ideas, complex inventions required and innovation in multiple areas: disruption

• Startup 2 – Radical consumer services platform – ideas, invention galore … but …

• Startup 3 – Consumer services platform applied to advertising: invention -> innovation

• Google …. A company dedicated to Ideas, Invention, Innovation … and … principle

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Innovation = Insight, Ideas, Invention, Introduction

• Innovation is the conversion of ideas into cash ; Invention is the conversion of cash into ideas …. Thomas Edison innovator vs Nikola Tesla as inventor

• Innovation is transformation of ideas into new products in order to advance, compete and differentiate themselves successfully in their marketplace

• Innovation … the successful introduction of a new thing or method to a market

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Innovation = Insight, Ideas, Invention, Introduction

To innovate means to: • Understand or recognize a problem,

• gain insight into how one might uniquely address this problem,

• Conceive ideas to achieve desired outcome

• Invent to realize insights

• Introduce the invention(s) to market … successfully!

Great thinkers & great inventors frequently fail to innovate, and it is certainly possible to innovate through other’s insights, ideas and inventions …

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Composing Inventions to Realize Ideas

Ideas require inventions to be realized. Inventions arrive (trends) or are created. Complex ideas require many inventions to be composed …

Startups frequently pursue simple ideas, few “Raw” inventions and increments … but the big success lies elsewhere ..

Radical startups pursue impossible risk paths and many Raw inventions

Invention Invention Invention

Invention Invention Invention

Expanded state of art – improve efficiency, etcExpanded state of art – improve efficiency, etc

Wait for its arrival – such as memory cost or CPU cycle cost

Wait for its arrival – such as memory cost or CPU cycle cost Generalize past + extendGeneralize past + extend

Raw invention like creation of PageRank algorithms for web indexing

Raw invention like creation of PageRank algorithms for web indexing

Expanded state of artExpanded state of art Observe, apply past insight to new domain – news headlines as public messages

Observe, apply past insight to new domain – news headlines as public messages

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What is the Innovator Dilemma?

Entrenched players misunderstand their market …

• Horse & buggy companies thought they were in the “buggy market” not the transportation market

• Buggy companies tend to pursue sustaining innovations such as “better suspension” or “faster horses”

• Gas autos were introduced and seen by buggy companies, but not seen as “competition” in the buggy market (noisy, cost, smelly) : disruptive and ignored

• The newer product improves faster than the established one in the actual market and eventually satisfies customer demand for transportation better than the previous one

So step back …

• So what benefit (not product) do you deliver to customers really?

• Focus on improving the fundamental benefit radically

• If you don’t someone else will …

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Dilemmas = Opportunities (for someone)

Simplistic approaches to evolving a business dominate thinking … sustaining innovations result …

• Listen to Customers

• Seek out their Next Generation Needs

• Invest and Rapidly Invent Solutions to Needs

• Innovate by Getting Solutions to Customers

…. And soon you may well deliver the world’s best buggy-whips to market …. while at the same time some startup builds a gas-powered car and disrupts your entire business …

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So .. Is there a Formula for Effective Innovation?

Lets say you want to avoid the apparently inevitable Innovator Dilemma and irrelevance … and you want to build that “gas car” yourself …

• Embrace radical ideas challenging existing market boundaries .. that require elusive concepts, unlikely inventions, and hard to imagine mindset changes and stunning execution …

• Probably some thoughts to consider …• Attack big ideas only not increments (sounds easier than it is)

• Hire youth not experts to lead your thinking (its as risky as it sounds)

• Tolerate and embrace dissent, versus adhering to doctrine

• Suspend disbelief always!

• Minimize the ability of leaders or managers to say no … support independent thinking and investment

• Watch out for “Devils Advocates” – especially as ideas are generated and discussed

• Maintain patience and perseverance and evolve ideas not kill - but encourage fast failure/change cycles

• Trial, measure and repeat – always

• Remember - Startups often pursue radical ideas with cult-like devotion and zeal … while… established companies … largely stumble …. And become incremental

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Googlers often say Innovation has Nine Points ….

• Ideas come from everywhere. Don’t say no and kill projects with trepidation.

• Share everything. The best insight you need might be closer than you think.

• Data is A-political. Measure everything. Debate everything.

• Creativity loves constraint. Can you do twice as much twice as cheaply? Just ‘cause.

• Iteration not instant perfection. Launch – NOW! Launch – AGAIN!

• Hire passion. Hire the best. Really. Seriously.

• A license to pursue dreams. 70/20/10 + 20%

• Users not money. Focus on usefulness ...

• Think BIG. Really really big.

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Innovation Cycle: A simple thought process

• Insight – See the problem, opportunity and way forward

• Invention – Realize your insight in a creative act … build, test, result.

• Innovation – apply to an existing market or define a market

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Example 1 : Hierarchical Planning

Theory/Insight: Hierarchical domain knowledge can radically improve search in useful domains like plan generation in problems of useful size …

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Innovation Cycle: Search Research : Hierarchical Planning

• Investigation, Collaboration, Analysis : What is the “world” like?

• People are good at planning in worlds with partial information, automated systems are not.

• Problem Definition: What is broken with this world?

• Automated planning processes are too linear and don’t utilize abstract concepts the way human planners do ….

• Problem Imagined-Solution: What is “a better” world, and how is it better?

• If one could encode plan goals in terms that include abstract goals automated planner could be less “pedantic” …

• Solution Break-down: What would a solution look like – Inventions Outline

• Detailed representational and algorithmic work <here></here>

• Solution / Systems Analysis: Would such a “Solution System” work theoretically? Why?

• Proofs, examples, counter-examples if any, corner cases

• Implementation of “Inventions” as a System

• Algorithms, programs, experiments

• Metrics creation – current practice, ideal, experimental

• Demonstration of Implementation in problem domains

• Case studies, trials of “product” with “customers” – more and more metrics

• Demonstration of Implementation in problem domains

• Case studies, trials of “product” with “customers” – more and more metrics

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Google Confidential and Proprietary

Hierarchical Planning – Invention Map

Idea: Hierarchical domain knowledge can radically improve search in useful domains like plan generation in problems of useful size …

Market Application: Publication, Graduation , Influence to thought

Research to me is a team/iterative activity – collaboration, discussion, shared experiences and peer feedback …

Theory Algorithms Implementations

Domain Capture Problem Encode Exp Framework

Expanded state of artExpanded state of art

Expanded state of artExpanded state of art

Generalize past + extendGeneralize past + extend

Expanded state of artExpanded state of art

Just plain workJust plain work

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Example 2 : Hierarchical Constraint Satisfaction

Theory/Insight: Hierarchical object domain knowledge can radically improve search in useful domains like spatial template recognition in problems of useful size …

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Innovation Cycle: Search Research : Hierarchical Plan Recognition

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Google Confidential and Proprietary

Hierarchical Constraint Satisfaction – Invention Map

Idea: Hierarchical object domain knowledge can radically improve search in useful domains like spatial template recognition in problems of useful size …

Market Application: Spatial problems (human-assist), Software architectural analysis and conformance (human-assist)

Applied research & “innovation” go hand-in-hand

Theory Algorithms Implementations

Domain Capture Problem Encode Exp Framework

Expanded state of artExpanded state of art

Expanded state of artExpanded state of art

Generalize past + extendGeneralize past + extend

Expanded state of artExpanded state of art

Just plain workJust plain work

Google Confidential and Proprietary

Example 3 : Interactive Voice Portal (Quack.com)

Theory/Insight: Voice can be used to deliver interactive services to consumers quickly and effectively if … you can obtain, organize and deliver the information rapidly, direct consumer dialogue, compose services quickly and interact intelligibly and quickly …

Google Confidential and Proprietary

Innovation CycleStartup : Voice Portals at Quack.com

• Investigation, Collaboration, Analysis : What is the “world” like?

• People can’t get, and act-on information wherever they are, and it costs them time and money!

• Problem Definition: What is broken with this world?

• If it was easy, fast and simple enough, people would but things online everywhere!

• Problem Imagined-Solution: What is “a better” world, and how is it better?

• If we obtained and organized current product info, and connected that to purchasing services and hooked it to an IVR you could use your voice to buy things everywhere!

• Solution Break-down: What would a solution look like – Inventions Outline

• Detailed process description and algorithms – extend IVR dialogue creation, datastore flexibility, datastore access time, online data mapping, datastore freshness, online service mapping,

• Solution / Systems Analysis: Would such a “Solution System” work theoretically? Why?

• Technically possible (demo/prototype), practical success is … market-changing dependent

• Implementation of “Inventions” as a composed System

• Algorithms, programs, experiments

• Metrics creation – current practice, ideal, experimental – truth is in user behaviour!

• Demonstration of Implementation in specific market problem domains

• Case studies, trials, alphas, betas of “product/service” with “actual customers” – more metrics!

• Disruption? Changing a market? Building a new market?

• Cost < Result? This is ONE metric not a controlling factor

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Google Confidential and Proprietary

Startup: Voice Portals are Impossible … Right?

Idea: Voice can be used to deliver interactive services to consumers quickly and effectively if … you can obtain, organize and deliver the information rapidly, direct consumer dialogue, compose services quickly and interact intelligibly and quickly …

Market Application: Implementation demonstrates innovator dilemma to acquirers … in multiple markets … and risk means value creation

Radical startups (& Google) pursue impossible risk paths …

Spider Semantic Index Rapid Access

Dialogue Models Interaction Tools Applied Recog’n

Fundamental SimplificationFundamental Simplification

Expanded state of artExpanded state of art

Semantic Web Overlay incl transactional modelSemantic Web Overlay incl transactional model

Tightly controlled modelTightly controlled model

Specific-use in-memory databaseSpecific-use in-memory database Expanded state of art

– exploit existing tech trends

Expanded state of art – exploit existing tech trends

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Example 4 : Conversion Optimizer (Google)

Theory/Insight: Advertisers want to “buy” consumer “conversion” to desired action, not clicks on their ads. Why not calculate predicted click through rates pCTR and predicted conversion rates pCVR and manage advertiser click-bids ourselves to improve access to “likely to convert” customer clicks and reduce spend on likely ones? …

Google Confidential and Proprietary

Google : Innovation Cycle (Conversion Optimizer)

• Investigation, Collaboration, Analysis : What is the “world” like?

• People purchase advertising by click, manually calculate clicks to cash on backend.

• Problem Definition: What is broken with this world?

• Lots of chance for error. Advertiser can’t “see the world” and see potential customers.

• Problem Imagined-Solution: What is “a better” world, and how is it better?

• If we could predict click rates and conversion rates per impression we could help advertisers bid more for the “more likely to convert” clicks – or even advertisers could pay only for conversions!

• Solution Break-down: What would a solution look like – Inventions Outline

• Machine learning algorithms across all impressions and clicks for conversion-tracked ads in order to create pCTR and pCVR for all opportunities to advertise. Apply model live for all!

• Solution / Systems Analysis: Would such a “Solution System” work theoretically? Why?

• Technically possible (demo/prototype), practical success depends on scaling up ML model generation and converging on “better than human” methods. Success depends also on advertiser belief and avoiding F-U-D from competing approaches and advice.

• Implementation of “Inventions” as an end-to-end System

• Algorithms, programs, experiments

• Metrics creation – current practice, ideal, experimental – truth is in advertiser value & behaviour!

• Demonstration of Implementation in specific market problem domains

• Case studies, trials, alphas, betas of “product/service” with “actual customers” – more metrics!

• Disruption? Changing OUR own market? A better way but is it profitable?

• Metrics – advertiser adoption. Advertiser investment. Revenues a distant long-term view.

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Google Confidential and Proprietary

Conversion Optimizer

Idea: Advertisers want to “buy” consumer “conversion” to desired action, not clicks on their ads. Why not calculate pCTR and pCVR and manage advertiser click-bids ourselves to improve access to “likely to convert” customer clicks and reduce spend on likely ones? …

Market Application: Implementation defeats innovator dilemma and competes with Google primary business of CPC … launched with no concept of increased revenue or profit – only advertiser value

Radical startups (& Google) pursue impossible risk paths … now well past $1B in annual revenue …

ML Models Scale pCTR pCVR

Customer Exper Side by Side A/B Exploration

Simplify but don’t obscureSimplify but don’t obscure

Radical state of artRadical state of art

ML approach (patents)ML approach (patents)

Encourage customer experimentationEncourage customer experimentation

M approach (patents)M approach (patents)X is like Y (patents)X is like Y (patents)

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A Formula to Survive and Thrive Amidst Change?

How about

• Define a broad, empowering mission that captures what it means to innovate?

• Hire ONLY builders and experienced leaders who know how to take ideas to people?

• Rewards dramatic, awe-inspiring failure if done quickly?

• Constantly challenge radicals to destroy the company’s primary business from within?

• Focus on users only. Ignore money. Solve their problems..

Google Confidential and Proprietary 26

What about Google: @Waterloo Snapshot

Google “Conversion Optimizer” $B biz, Ad Exchange and core ads infrastructure

Google “mobile applications” from Gmail and Buzz to YouTube and Picasa and core technical abilities including HTML5

Proving the web as a superior application platform from hardware to experience on one netbook environment – from a 20% initiative from Waterloo

Inspiration, Invention, Innovation20% projects and prototypesCommunity involvement – CanadaRelevance and Identity – Canada

Ads MobileNextBigThing

Chrome/OS

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Google : Innovation is an Imperative

Google Confidential and Proprietary 28

Culture of Innovation: Being "Googley" means…

… being able to work effectively in a flat organization and in

small teams, able to respond to a fast-paced rapidly

changing, ambiguous environment. Googlers are

passionate about their work. They solve problems

creatively and collaboratively, with all levels of the

organization. Googlers are ethical and communicate

openly, and can be serious without a suit. They are well-

rounded and bring unique interests and talents to innovate

in the work they do, and love the challenge of making the world

a better place.

Culture of Innovation: Hire Passion

Culture of Innovation: Google & Entrepreneurs

Teams @ Waterloo

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Ideas @ Waterloo

Share @ Waterloo

Creativity/Constraint @ Waterloo

Iteration @ Waterloo

Users @ Waterloo

Big @ Waterloo

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Inventing and Innovating at Google ….

Source: http://www.cashedge.com/pressRoom/news_070104_bst.html

Solve big problems

Take risks

Don’t be evil

Have funGreat people

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Thank you