{"id":44125,"date":"2023-10-20T15:33:38","date_gmt":"2023-10-20T15:33:38","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/internet-of-things-guru-kevin-ashton-on-why-big-companies-suck-at-innovating-and-ceos-have-great-hair-startupsmart\/"},"modified":"2023-10-20T15:33:38","modified_gmt":"2023-10-20T15:33:38","slug":"internet-of-things-guru-kevin-ashton-on-why-big-companies-suck-at-innovating-and-ceos-have-great-hair-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/internet-of-things-guru-kevin-ashton-on-why-big-companies-suck-at-innovating-and-ceos-have-great-hair-startupsmart\/","title":{"rendered":"Internet of Things guru Kevin Ashton on why big companies “suck” at innovating and CEOs have great hair – StartupSmart"},"content":{"rendered":"
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 <\/p>\n

Kevin Ashton is best known for coining the \u2018Internet of Things\u2019 term in 1999, however that\u2019s just one part of a varied career that\u2019s included building a number of tech startups, co-founding MIT\u2019s Auto-ID Center and leading some of the early development work in RFID (radio frequency identification) networks, which led to the IoT label being born.<\/p>\n

 <\/p>\n

Since exiting his last business Ashton\u2019s focus has been on consulting, mentoring some of the startups he\u2019s invested in and writing with his last book \u201cHow To Fly A Horse, the secret history of creation, invention and discovery\u201d released at the beginning of this year.<\/p>\n

 <\/p>\n

During his visit to Sydney last week, he spoke to Decoding The New Economy about his startup experiences, the future of work, skills needed for success and why the media is a doing a poor job on reporting technology.<\/p>\n

 <\/p>\n

Let\u2019s kick off with your book, what was the motivation behind writing it?<\/strong><\/em><\/p>\n

In the late 1990s I started a lab at MIT and most of my talking was about the research we were doing. I\u2019d talk and then they\u2019d hear it. But occasionally someone would say, “Oh, but you\u2019re leading a very innovative team, and we\u2019re very interested in innovation. Can you talk about innovation and how things get created?”<\/p>\n

 <\/p>\n

So I started giving talks about my experiences of driving an innovation and trying to be innovative, and so on. And that became more and more popular through the 2000s. Eventually I was giving a talk in Napa Valley, California, and a friend of mine came to watch, and at the end they were like, \u201cOh my God, that was amazing! You need to write a book.\u201d<\/p>\n

 <\/p>\n

I started writing a book of the talk and it did very well. People really liked it. And it was weird because, I guess, you kind of get used to a way of thinking about things, and it seems you forget that to other people it might be insightful.<\/p>\n

 <\/p>\n

The book is really my experience and my strong belief that creating is not about magical flashes of inspiration and being a special kind of person, or being a genius, or whatever. It\u2019s got a lot more to do with being willing to just keep going even when it\u2019s not working, even when you can\u2019t see a way forward.<\/p>\n

 <\/p>\n

And it\u2019s also not an individual thing. It\u2019s very much about building on the work of other people. Creating itself is very individual, which turned out to be a controversial point as well, that you\u2019re always part of a community of people you know, people you don\u2019t know, people that are still alive, people that died years ago. You\u2019re making these incremental steps, building on the work of others. So that was always my thought, and that\u2019s the book that I wrote. And I\u2019m lucky. People seem to really like it.<\/p>\n

 <\/p>\n

What\u2019s your thoughts on the current startup mania?<\/em><\/strong><\/p>\n

I think, by and large, big companies suck at doing new things, and the reason is structural. Every big company was a small company at some point. Someone was doing a new thing. And eventually they happened upon something that worked.<\/p>\n

 <\/p>\n

The first thing you tried doesn\u2019t work, the second thing you tried doesn\u2019t work, and accidentally you stumble across something that does work and starts making money. Maybe those people move on, maybe they stay, but it\u2019s easy to become addicted to the comfort and safety of the thing that works.<\/p>\n

 <\/p>\n

And the money that flows from the thing that works, it\u2019s easy to believe that that thing will continue to work. Or you make a slight change. You only had a red one, and now you\u2019ve got an orange one, and you feel like you\u2019ve been profoundly innovative.<\/p>\n

 <\/p>\n

So, if you really want to do something new, you probably need to be in a small, passionate group of people. Now it is possible for a big company to take a small, passionate group of people and sort of stick then in an airlock somewhere and leave them alone. Theoretically, that\u2019s possible. It seldom happens, and particularly because most of innovating is failing.<\/p>\n

 <\/p>\n

I\u2019ve seen time and again is the people who rise to the top of big companies are often people who are very good at avoiding failure, or the appearance of failure. Very good at taking credit for other people\u2019s success. They\u2019re often from a privileged class. It\u2019s typically white men. The typical CEO is a tallish white man with a full head of hair and a deep voice. I see that all the time. Failing is not good for your career. Ironically, because it is good for creating.<\/p>\n

 <\/p>\n

So, I think startups, meaning small companies, small groups of passionate people who are either not scared of failing or don\u2019t have any choice but to keep failing until they succeed because there\u2019s nowhere else to go, are always going to be the engines of innovation and creating.<\/p>\n

 <\/p>\n

Now, I will qualify that. There is also a class of privileged white men called venture capitalists who like to make you think that unless they\u2019re allowed to give you some money that you can\u2019t succeed and that you\u2019re not a credible startup unless somebody blessed you with some venture capital or something. And I think, frankly, that\u2019s all bullshit.<\/p>\n

 <\/p>\n

The last thing you want to do as an entrepreneur is, and I\u2019ve done it, I\u2019ve started companies without venture capital, and then taken some eventually. My most successful company never took on any money from anybody else. There was kind of in the middle somewhere.<\/p>\n

 <\/p>\n

Not only is venture capital and outside investment not a prerequisite for having a successful startup, it\u2019s really a last resort. Because what comes with that money is loss of control and people who don\u2019t\u2026 you start to get some of the problems that come with a big company. Venture capitalists who hear this will just throw up their hands and hate it when they get called out on their shit, but that\u2019s true.<\/p>\n

 <\/p>\n

And by the way, a lot of very successful companies that take Microsoft, or Amazon, or whatever\u2026 had a very slight relationship with venture capital. So it\u2019s entirely possible to build a large, successful, high-tech company, without venture money.<\/p>\n

 <\/p>\n

The discipline that comes from living hand to mouth and trying to find a customer and trying to make a profit and not wasting your money on bean bags and air hockey or whatever, that\u2019s a good thing. So, I\u2019m all for people of all genders, colours, sexualities, shapes and sizes trying to do something by themselves. I think you can be successful. I don\u2019t think you need anybody\u2019s permission.<\/p>\n

 <\/p>\n

Which was your most successful company?<\/em><\/strong><\/p>\n

Zensi was a company I started with some academic friends, and it was a very smart way to identify how people were consuming electricity and water. I was very into knowing things relatively. In the case of water, for example, we put a very simple sensor that you could screw under the kitchen sink. It was just a little diaphragm. But every time you use water anywhere in your home, the pressure in your water system changes.<\/p>\n

 <\/p>\n

So, you turn on the shower upstairs, and throughout your water system, there\u2019s a pressure drop, and then a pressure stabilisation as the system gets back to its regular pressure. And what we found was, you could analyse that pressure change and determine someone had just taken a shower, for example.<\/p>\n

 <\/p>\n

It\u2019s a very simple sensor connected to the internet, a bunch of algorithms in the cloud. And you could identify leaks, you could tell people where they were wasting water. So, we started that company, basically, with cash of our own and that was in January, February 2009. So that was the depths of the recession. When nobody was starting anything, by the way.<\/p>\n

 <\/p>\n

What do they say? They say buy low and sell high. Well, guess what? When you can buy low, nobody\u2019s buying. They\u2019re scared, right?<\/p>\n

 <\/p>\n

So we started it 2009, and about 10 months later we had a couple of people trying to acquire it for a lot of money. The best answer you can ever give somebody when they want to acquire your company is, “we\u2019re not for sale”, because then the price just keeps going up. You have to mean it, right?<\/p>\n

 <\/p>\n

Eventually, we got an offer we really couldn\u2019t refuse. At the same time, we were thinking about trying to raise venture money, and so on. It wasn\u2019t like a deliberate strategy to never do it. But the acquisition deal was just so much more valuable. And the beauty of that is, you\u2019re not sharing the money with anybody else.<\/p>\n

 <\/p>\n

Today you\u2019re an author and speaker?<\/em><\/strong><\/p>\n

Author, speaker. I\u2019ve got some investments in some Austin-based startups. I do a little bit of consulting here and there. So, companies I\u2019m interested in. I have done the MIT thing. And then three startups. And I\u2019m actually enjoying not having a very formal schedule. It gives me a chance to write, which I love. It gives me a chance to come here and do this. I\u2019ve never been very successful in companies that I was not in charge of.<\/p>\n

 <\/p>\n

Like a lot of people who are interested in innovation and passionate about creating new things I find that a lot of the kind of mansplaining and bullshit and endless PowerPoint and people wanting to have nothing but meetings and, you know, a lot of posturing and politics and stuff, I have a very low tolerance for that crap. I\u2019m very bad at it. So, I love my life right now, because I really choose. I\u2019m very much the master of my own destiny, and I don\u2019t have to\u2026 I\u2019m not obliged to deal with too many idiots. Which is good for me, because I\u2019m not good at it.<\/p>\n

 <\/p>\n

In part two of this interview Kevin Ashton will talk about why the IoT is so much more than talking toasters and the skills needed for the future (coding isn’t one of them)<\/em><\/strong><\/p>\n

Paul Wallbank is the publisher of Networked Globe, his personal blog Decoding The New Economy charts how our society is changing in the connected century.<\/em><\/em><\/em><\/em><\/em><\/em><\/p>\n

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