I first came across this stunning technology demonstration this summer while working at Hillcrest Labs. Now, with Microsoft putting a sweet offer on the table to buy Yahoo (and Yahoo’s Flickr site), the consumer possibilities of Photosynth become outrageous. Virtual Earth + Flickr + Photosynth = Stunning.

from www.ted.com posted with vodpod

I live just across town from William McDonough, but this is as close as I’ve seen him. He’s the creator and advocate of Cradle to Cradle design – a design methodology which he describes in application to product design, material selection, and even urban planning in China.

from www.ted.com

When a hotel executive asked me recently what I would do to communicate the hotel’s sustainability initiatives to current and future customers, I proposed that the hotel explicitly abandon trying to advertise and promote its actual green activities to focus more on the emotional goodwill of sustainability through story telling and interactive displays – allowing guests to touch and feel (with hands and heart) the ways the world could be a better place.

The hotel industry is in a bit of a marketing quagmire when it comes to demonstrating their green-ness to customers. Most of its sustainability efforts take place out of view of the customer experience, meaning the hotels are often unable to capitalize on their success in limiting resource consumption through enhanced customer experience and brand perception. While in-room services allow guests to participate in greener efforts by washing linens less frequently, a hotel that devotes staff to purchasing local produce, recycles grey water, and invests in green architecture often has trouble connecting those efforts with the “feel good” goodwill that could come with more visible green efforts.

The hotel executive surprised me with his response. Instead of critiquing the concept, he asked, “What do we do next? Assume that succeeds, what’s next?”

I told him I would want him to stop competing on green alone, because green is not the only color his company wants to preserve. From the emerald hills of Ireland, to the red tulips of Holland, to the Caribbean blues of St. Lucia, there’s a whole world of colors we want to sustain – for the world and for our children.

The global economy continues to undergo seismic shifts. Previous vertically integrated industries became segmented by horizontal service providers, then disjointed as loosely connected networks of service providers. The value creators in the new economy are providing exceptional experiences by outperforming their niche in the network or tying together the nodes of the network and packaging the whole thing in innovative ways.

As part of my recent course at Darden on Innovation and Integration in Services – The New Economy, I made observations on a number of innovations as examples of value creation in this flat, networked world. This is my submission on Zillow.com and the “web 2.0-ing” of real estate.

THE SERVICE

Zillow.com: online, satellite imagery-enabled web site for real estate listings, guides, and discussion.

HOW IS IT INNOVATIVE? WHY DID IT GRAB YOUR ATTENTION?

Zillow.com combined the mass of information on residential real estate, including public appraisals, tax records, and sales records, to provide the most innovative website for real estate listings since Realtor.com. Users can search by various purchase criteria (price, square footage, home features, zip code, specific street, etc.) and find a zoomable satellite map with currently listed properties highlighted, a pricing chart for local real estate prices over time, recent sales data, and user-generated “Make Me Move” prices for homes that aren’t even for sale – but could be for the right price!

WHAT IS THE PROBLEM OR ISSUE ADDRESSED?

Residential real estate is notorious for its maligned gatekeepers: the Realtors. Since so much of the information surrounding residential real estate is publicly accessible and now coming online, Zillow.com aggregates this information to provide a powerful research base for real estate buyers and sellers. Zillow.com represents a triumph of three “flatteners” in particular: The Age of Connectivity, Uploading, and Informing.

IS THERE A CHANGE, DEVELOPMENT, OR TREND THAT CREATED THE OPPORTUNITY? OR, IS IT JUST NEW THINKING?

The confluence of Internet-accessible public records relating to real estate, geo-spatial satellite imagery, and popularity of crowd-sourcing has made Zillow.com one of the top 400 websites in the US. Its national reach reveals its ambitions to bring top local marketplace information to every local marketplace in the country – and perhaps the world.

WHAT ARE TRANSFERABLE QUALITIES TO OTHER CATEGORIES?

Zillow.com is a prime example of a localized service using a globally-connected network and massively distributed information. By providing real value-added insight into local market conditions, Zillow.com has situated itself as a must-stop destination for home shoppers – if only for local real estate comparables. Traders of other local assets with difficult market appraisals but vast information – such as local produce, automobiles, small businesses, dinner reservations, gasoline, haircuts, etc – could borrow this map-driven interface loaded with telling information that generates a basic spot price for the goods in question.

DOES THIS SUPPLANT A PREVIOUS SOLUTION? WHAT, IF ANYTHING, IS THIS DISPLACING? (Think about The Innovators’ Dilemma)

For many, this solution displaces nights at the county records office or desperate conversations with unscrupulous realty agents. Zillow.com provides much of the publicly-available real estate market information to any Internet-connected computer, informing the consumer with the most up-to-date analysis of real estate market conditions. It certainly ups the ante for the real estate professional.

ANY OTHER POINTS WORTH MAKING:

Zillow markets its services in true Web 2.0 fashion – by giving it away for free. Its advertising-supported business model requires it to produce the most consumer-demanded information in order to drive traffic, then to create a marketplace for real estate services within its site. Startup firm Redfin.com has taken the Zillow model a step further – by adding full, online realty agent services to buy and sell properties. Other prominent industry websites, including Yahoo! Real Estate, are now providing embedded versions of Zillow’s valuations and other data.

Innovation and Integration in Services – The New Economy is a second-year MBA course taught by George Barbee, a Batten Fellow and lecturer at the Darden Graduate School of Business.

Originally published October 27, 2006.

Darden hosted a brilliantly funny man named Larry Keeley for a small forum on corporate innovation this week in what was one of my favorite Darden experiences thus far.  We let Larry know up front that his ability to draw a crowd was admirable since it was a) the start of a three day weekend for Darden students, b) at the same time as a presentation by Steve Reinemund, the CEO of Pepsi, AND c) going head to head with the Virginia Film Festival and a talk from Mark Johnson (The Chronicles of Narnia, Rain Man).  What a lineup.

(Photo of Larry Keeley, shamefully lifted from the Doblin website.)

Nonetheless, Mr. Keeley brought the house down in theatrical fashion, and his presentation originally slated for an hour and a half painlessly grew to two and a half hours plus as he wowed us with stories of innovation and modern marvels.  Mix two parts Stephen Colbert and one part Lewis Black, coat with innovation and design, and you’ll get Larry Keeley.  From the magic of Dell, who innovated everything besides the final product (until the acquisition of Alienware), to the enviable and highly profitable Mini brand created by BMW, to the most successful iinovators of our time (pharmaceutical firms), Mr. Keeley wove story after story of cutting edge innovation that stretched beyond the product line.  It’s no wonder he’s got so many stories to tell: he’s been doing this for 27 years.  Only recently though has innovation really landed square on the global business landscape, and in Keeley’s words, “It took 27 years for us to have an overnight success.”  Even still, he thinks innovation is just beginning to get good.  As he mentions on his Doblin consulting website (www.doblin.com), “since innovation fails about 96% of the time, it seems self-evident that the field has advanced to about the same state as medicine when leeches, liniments and mystery potions were the sophisticated treatments of the day.”   So it’s a good time to be in innovation management, and Larry Keeley is helping companies develop more disciplined, productive approaches to innovation that will lead them into the uncharted roads of value creation ahead.

Larry Keeley is working in a breakthrough confluence of business and design, teaching at the Illinois Instiitute of Design and the Kellogg School of Management at Northwestern.  I’d like to see some of that work filter down to Darden and the University of Virginia, and potentially match up with the design wonks at VCU AdCenter, who recently scored huge in the Innovation Challenge global MBA competition.  Congratulations VCU!

Originally published August 14, 2006.

I just finished an invigorating read through Jim Collins and Jerry Porras’ best-seller, Built to Last.  I love the way these researchers capture the epic mythology of doing great work – of finding purpose and meaning beyond the dollar signs.  Their research showed that “visionary companies,” as they defined them, are more often built with some motivating purpose other than making money when compared to less successful competitors.  This point is one that captures my entrepreneurial spirit – to do something that matters for the long haul, something that makes a lasting impact on the world around me and improves the lives of others. 

The MBA program guides and consultants I reviewed during my application to business schools all seemed to have one thing in common: discussing the ROI of business school.  The rationale was always the same – since you’re going to business school, now’s a great time to examine the return on your investment!  It’s generallly a winsome argument, since many MBA graduates leap ahead to substantially higher salaries among multiple job offers than their pre-MBA careers would provide.  But this argument woefully discounts the non-financial return of two great years of investing in one’s self and a tremendous network of peers who are capable of leading the next generation of world-changing organizations.  To put it more directly, the prospects of learning extensive practices to create and guide organizations have much more value than the immediate salary commanded by MBA graduates.  That is why my MBA admissions essays focused on learning to make an impact on others more than making more money for myself.

As I see it, my MBA studies are a priceless time to learn about the development and management of organizations, a time to learn more about how to impact teams of people motivated toward a common goal.  I expect my education to be valuable both in my professional career and in my volunteer efforts, as I join the leadership of my church and community non-profits to make lasting impacts in the social sector as well.  While I do find it important to believe that my education will pay for itself in career successes, I also believe one of the greatest advantages of an MBA education must be to share it with those who could benefit from my service but could not otherwise afford it.

Please do not misunderstand me: I am not opposed to earning high salaries and ensuring that one’s MBA education earns significant results.  I am, however, suggesting that making an impact on others is more important than will be reflected in one’s salary, and that the financial rewards of doing good work are best invested to increasing the impact of future work.  For those who share this vision (particularly those who are  Darden MBA students), I look forward to meeting you and exploring the possibilities.

And, as a post-script, it turns out the purpose-driven “visionary companies” of Built to Last dramatically outperformed their comparison companies and stock market indices…

Originally published July 3, 2006.

One of the most attractive aspects (to me) of venture capital is the chance to partner with some dramatically transformational people and businesses to shape and improve the world around us.  A handy little write-up from a recent Wharton conference titled Innovation and Organic Growth: Balancing Risk and Reward gives a better perspective of the venture capital world at large, and the risk management strategies employed by venture capitalists.

The VC financing industry typically funds less than 1% of applicants; in several discerning firms, funding is provided to as few as a quarter of a percent (1 in 400) of applicantes.  This gatekeeper strategy is a primary filter to build a portfolio of big winners, not big wipeouts.  Further VC industry insights from the Wharton conference point out why the early-stage investment risk places large corporations can be at a disadvantage for investing (waiting for big payoff may cut too sharply into earnings) and small venture capital firms are more appropriately structured to take on the high risk of early-stage investing (effectively, the rewards of success are largely concentrated at the partner level in a venture capital firm).  For this reason, venture capital firms maintain strategically small numbers of partners; with too many, rewards are spread too thin to justify the risk.

For the complete article, including audio direct from the conference, visit Knowledge@Wharton: Managing Risk in Venture Capital Investing

Originally published June 2, 2006.

I visited Manhattan for the first time in several years over the Memorial Day weekend, and I kept my eyes peeled for a particular new architectural marvel among the city skyline.  Walking a few blocks north from Times Square on Broadway, my eyes caught the unmistakeable angular facade of the new Hearst Magazine Building, the first building to win LEED Gold certification in New York city (where they said it couldn’t be done).

The stunning structure of diagonal steel grids (no horizontal beams are used) emerges from the original Hearst structure at street level, creating a stunning juxtaposition of form and material.  Each triangular section is four stories high, creating a powerful sense of scale.

Some quick research on the building’s website, which has an excellent photo gallery and video tour, found these quick stats:

The ”innovative ‘diagrid’ system (a word contraction of diagonal grid) that creates a series of four-story triangles on the fa�ade. No horizontal steel beams are being used, which is a first for North American office towers. In addition to giving the tower a bold architectural distinctiveness, it is providing Hearst with superior structural efficiency. As a result, Hearst eliminated the need for approximately 2,000 tons of steel, a 20 percent savings over a typical office building.”

“In addition, Hearst is using high efficiency heating and air-conditioning equipment that will utilize outside air for cooling and ventilation for 75 percent of the year, as well as Energy Star appliances. These and other energy-saving features are expected to increase energy efficiency by 22 percent compared to a standard office building. This is a welcome innovation in New York City, where rapidly growing electricity demand is threatening to overwhelm the local power supply.”

My green buildilng interest was further titillated by a full feature article in the current Harvard Business Review, Building the Green Way (free) – well worth the read on your train ride home!  Should the link ever fail, you can download the full article in PDF as well:

HBR_-_Building_the_Green_Way.pdf

Originally published May 25, 2006.

A few recent news items have triaged the current status of sustainable design in architecture and urban development.  In Atlanta, a model of new urbanism and smart growth has emerged in Atlantic Station, where urban lofts, high profile office space, hotel rooms, restaurants and retail have combined to fill a 138-acre plot reclaimed from an old steel mill (see property map image below). 

Atlantic Station is tops on the list of the nation’s bold mixed-use/New Urbanism developments, many of which were previously featured in the Business Week article, Bringing Community to the City (also check out the slide show associated with the article).

While the model is exciting for its pedestrian scale, access to public transportation, and inclusive development, the New York Times (Building a City WIthin the City of Atlanta, photo below Tami Chappell for New York Times) suggests the paint is so fresh as to make the place sterile and national retailers dominate storefronts while boutique or local retailers have not yet built a noteable presence, making it awkward to create an image distinct from that of a transplanted suburb.  The sustainable part may be right, but it’s not yet clear if the design works.  (Atlantic Station is roughly only half complete at this point, and several more years of development lie ahead for the ambitious $2 billion project.)

As Atlantic Station is discovering, architects and designers are struggling to identify the place of sustainability in architectural design.  Sustainability and Design seem to be playmates on a teeter-totter – linked together, but often facing trade-offs that raise one element over the other.  In the case of architectural design, interest (and commercial demand) pushes toward architecture as high art, elevating Design above Sustainability.  As students and professors of architecture put it in this New Tork Times article – Architects are a Lagging Indicator for Sustainable Design - the architectural profession is not yet widely geared toward producing practitioners skilled in Sustainable Design – though emerging standards for clean building technology and LEED certifications seem to be effectively demonstrating shifts in demand.

On a hopeful (albeit smaller scale) note,  The Culver House in Chicago is a new glass-facade condo project emerging as a beautiful model of advanced, sustainable building materials and high design, finding a nexus of eco-building and Modernist design.  (see the BusinessWeek article: Condo Development, image reproduced below.)

My hat goes off to the pioneers developing Atlantic Station and other bold mixed-use developments across the country.  I hope you are successful in revolutionizing the way we live, the way we interact with our built environment, and the way we preserve and steward the built environment for future generations. 

Originally published May 18, 2006.

A reader sent me a thoughtful email about the difficulties for young innovators and the structures of the educational system that don’t seem to lend themselves to developing new innovators and entrepreneurs.  This is a provocative topic, so I thought I’d post a copy of my reply and invite others to join the dialog:

Thanks for your comments about my blog and your provocative thoughts about entrepreneurship and innovation.  What are you studying at
Virginia?  I was an Electrical Engineering undergrad at UVA, which gave me the opportunity to take a number of design and invention-oriented courses (and I’d be happy to recommend courses and professors).  I think the Architecture school also has a number of “innovation enhancers” in its curriculum.  I personally know a number of very successful ventures (and serial entrepreneurs) to come out of UVA.I think I understand your concerns about innovation among the twenty/thirty-something set.  Especially as I work around DC now, I feel greatly undervalued by my age – in this town, until you’ve got a crown of gray hair and a record of financial giving (politically) and success (business-ly), it’s hard to be taken seriously.But I also understand that professional innovation is a highly risky venture – those that do it well are celebrated because there’s inherently a high amount of experimentation.  Just starting a new business is a risky venture, particularly for recent graduates which may have limited business networks and experience as well as college debts to pay (to say nothing of rent, food, insurance, car, and other expenses).  New businesses may typically go several years before turning a profit as the venture traverses its own growing pains; business incubators are established all over the country (there’s one at Darden) to help shelter those businesses from the high-risk environment of a start-up. Often times the “risk equation” makes it much more palatable for new young professionals to work several years, develop business acumen and networks, then consider a new business venture (or continue their ascent through corporate ranks).I also think there’s simply a very small percentage of the population with the business sense and creativity necessary to innovate marketable solutions (much less to build successful and growing companies).  It’s more sensible (but not necessarily right) in our economic constructs to “create jobs” than to create innovators.  For most people, who need a lot of support to even enter the workplace, they rely on others to create jobs.  But as for the smaller percentage of the population which is really eager to innovate AND capable of doing so profitably (e.g. with good management, marketing, manufacturing, logistics, etc), I don’t know that there are sufficient development tracks in the educational or professional systems to identify and “incubate” those future business leaders – perhaps there’s an opportunity for innovation!Is there also a sense in which successful innovators buck the system, as did Bill Gates or Richard Bronson?  Would efforts to form a support system for entrepreneurs (who may be fiercely independent) be doomed to fail?  I suspect not, and I would offer the Kauffman Fellows Program as one high-profile example.  But how do we link these programs to undergraduate and graduate education?  How do we identify and actively develop those young business leaders who will transform the world?