The last 20 years have brought an unprecedented level of innovation in consumer electronics.  Processing speed has increased 15,000%, standard system memory has gone from 1 megabyte to 4,000 megabytes, and hard disk storage has increased by a factor of 12.  However, battery technology has stayed largely the same.  The lithium-ion battery, most commonly used in laptops, smartphones, and some automobiles, was invented in 1985 and made commercially available in 1991.  Since then, no significant improvements have come to market, save some modest and incremental increases in voltage and capacity

Today, batteries are the greatest limiting factor to mobile technology design and innovation.  Take an iPhone for example.  Its A5 CPU, the same one found in the iPad 2, is clocked down to reduce power consumption.  A look inside the phone shows a giant and heavy lithium-ion battery dominating the interior.  Despite this, the phone still barely lasts a day with normal use.  This device, and our use of it, is defined by its battery.  Most iPhones spends the majority of their lives plugged in at my desk or nightstand.

Think of how different the world would be if battery tech kept up with Moore’s law.  Your laptop and phone would last weeks, if not months between charges and would be a third their size and weight. Instead of constantly being tethered to an outlet and power adaptor, we’d be free to use the devices as intended.  Electric vehicles would be a reality and drivers could charge up in minutes.  We wouldn’t have an energy crisis because solar and hydro-electric energy generated during non-peak hours could be efficiently stored and used when we need it the most.  This is a completely different world that seems generations ahead of the one we live in today.

So what’s the holdup?  How come we’ve been able to make such strides in nearly every other area of technology?  It comes down to a combination of bad luck, loss of focus, and a flawed system of R&D.  Right now, we’re largely reliant on academic institutions for battery tech breakthroughs.  Though aware of the potential commercial impact, academics don’t face intense pressure for commercial viability.

Considering how much money is invested in areas like clean tech and consumer internet, one can only wonder why someone hasn’t stepped up to solve this problem.  Gather the worlds leading researchers, pump hundreds of millions of dollars into whatever resources they can fathom, and put deadlines, pressure and attention on the process.  It’s not a guaranteed bet, but surely we will see more disruptive innovation this way.  With enough money, human capital, and time, discoveries will be made.  Whoever solves this will be huge — Edison, Bell and GE huge.  Calling all billionaire investors and fund managers, who’s going to step up?

 


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I recently served as a judge for the Harvard College business plan competition elevator pitch contest, along with prof. Tom Eisenmann, fellow EC Jess Bloomgarden, and two others affiliated with Harvard.  We were blown away at the number of pitches (at least 10%) which were effectively re-creations of LinkedIn.  One student wanted to give her classmates the ability to upload resumes into a centralized “drop” area.  Another student wanted to help connect classmate who had similar interests, and package those groups of students for employers.  Yet another student idea was about building a standardized database of student skills (and affiliations) so that potential employers could easily find and sort candidates for contact.  All of these functions are served, and served well, by LinkedIn. And within the HBS community, none of these ideas would have passed peer muster and made it to the pitch state.  (These weren’t bad ideas — they served quite valuable functions.  But the needs were already met by LinkedIn.)

It seems as if this is a clear example of the power of network effects, and the danger to adoption and risk of abandonment when network effects are potentially strong but un-realized.  In the case of Harvard College, very few students were on LinkedIn to begin with, meaning there was little incentive for additional students to join.  Because students weren’t familiar with the platform, employers [evidently] didn’t make much use of it for screening or messaging, and thus, its value for students was limited.

This led to quite an interesting conversation on twitter, involving an undergraduate, Harvard’s Chief Digital Officer, and Jess and myself.

Original tweet

An undergrad (hidden account) points out that LinkedIn is making special efforts with the community.

via @PerryHewitt “. agree they don’t use but shd prob use what will connect them to ppl who will hire them. Better to work off API?


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In my life before business school, I worked as a brand manager on Green Giant vegetables, Yoplait Yogurt, and Hamburger Helper dinner kits.  These brands, while familiar and in many ways iconic, were frankly… unsexy.  That was deliberate, of course.  As a brand marketer, my team worked diligently to maintain a consistent brand image across all of our media touch points.   Words like “sexy”  or “irreverent” were nowhere to be found on our brand architecture (the document we used to guide all consumer-facing marketing efforts), which instead included words like “trustworthy” and “high-quality.”  Unfortunately for marketers of big yet intentionally unsexy brands (think Charles Schwab), branding efforts have become more and more challenging in a world that is increasingly online.

In the days of Mad Men, advertising was a far simpler game to play.  Big brands chose a message, and plastered it across TV, Print, Radio, and Outdoor advertising.  For the most part, you could hit your consumer with that message whether she wanted to hear it or not.  On TV, for example, there was no DVR, and channel options were limited.  As a result, marketers could easily reach greater than 50% of consumers with a mid-sized TV advertising campaign.  And whether a consumer consciously acknowledged it or not, the informative but boring spot about the newest flavor of Cheerios effectively drove purchase behavior.  The world has changed, of course, as consumers’ eyeballs are shifting away from TV and the dying print industry and heading online instead.   Within the online world, consumers are increasingly heading to Social Networking sites.  According to a Nielsen report from Q3 of this year, Americans now spend a quarter of their online time on social networking sites.  Facebook leads the pack, owning a mind-blowing 16% of total U.S. internet time.

Thankfully for Facebook’s sales team, users have taken to interacting with brands on its platform.  The problem for marketers of boring brands is that they aren’t interacting with ALL brands, just the fun and/or sexy ones.  According to Fanpagelist.com, the products with the most Facebook fans include fun, irreverent brands like Red Bull, Oreo’s, Skittles, and Play Station.  A couple of recent posts from the Skittles Facebook page:  “One of these days the fire hydrant is going to get back at my dog, and it’s not going to be pretty.” and “There’s a first time for everything except déjà vu.”  Admit it- those are pretty funny. These brands have tens of millions of fans, many of whom interact with the brand regularly.  Charles Schwab’s page? 17,000 fans.  Granted it’s not an apples to apples comparison (different sizes of target markets, advertising budgets, etc.), but the contrast highlights an important dichotomy.

Additionally, the online world has fundamentally shifted the economics of advertising’s holy grail: The super bowl.  According to Ad Age, TV spots that aired during the super bowl were watched more than 360 million times on the web, driven primarily via posts that occurred in social media websites.  This year’s forecasted figure, 500 million, will mean that reach online after the game will actually surpass the reach of the original airing during the game itself.   According to Ad Age, the single most important characteristic of those ads which are most-shared?  Entertainment value.

It would be awkward and inconsistent branding if Charles Schwab created a humorous video with the hope that it goes viral.    It’s a predicament that some of the nation’s best marketers and ad agencies have been thinking about, but no one’s cracked the code yet.  In an increasingly social media-centric world, what’s a boring brand to do?


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We may complain about our healthcare system, but hospitals have come a long way in the last 100 years or so. In the late nineteenth century, record keeping and processes for managing patient flow were poor to non-existent. Your “doctor” was quite possibly an apprentice without a formal college education. And an infection that could have killed you in 1900 would be a trivial matter to the staff at Mass General today.

While transportation, communications and virtually every other field of human endeavor have taken similarly large strides in the last 100 years, in the classroom little has changed. The education experience of a child in the 1890s looks remarkably similar to the experience of a child in 2011. The vast majority of students still attend a brick and mortar school from early morning to mid afternoon for nine months a year, where they sit in a classroom with a single teacher who imparts information.

This inertia is not because the system is working well.  The US spends more than any other nation bar Switzerland, an average of $91,000 to educate each child between their 5th and 16th birthdays, but has little to show for it. The country is ranked 25th amongst industrialized nations in Science and 21st in Math. Sixty-eight percent of eighth graders can’t read at their grade level, and most will never catch up.

Several non-profits have begun to address the problem, the most notable of which is Khan Academy, an online library of almost 2,700 education videos on topics ranging from Math to Physics, History and Finance. The site draws approximately 2 million unique viewers per month, has 57,275 subscribers, and is the 98th most subscribed YouTube channel. They have been lauded by parents, educators, students and celebrities from Bill Gates to Bill Clinton. What’s more they have achieved all of this with total funding of only $11.5 million and a small (but highly impressive) team headed by Sal Khan, an HBS and MIT graduate that produces most of the videos.

While this success is admirable, they are really only scratching the surface. The approximately 13.5 million hours students have spent watching Khan Academy videos represents less than 0.03% of the 64 billion hours K12 students spend in school each year, and this is not counting time spent doing homework and with private tutors. Furthermore, while the videos have undoubtedly had a major impact, they remain quite low tech. It is easy to imagine the impact that a higher quality, high budget offering could have. This fact is not lost on Sal Khan, who I spoke to as background for this blog post, and who recognizes that scaling as a non-profit will be a significant challenge for the organization. It may not be possible to source enough top people willing to work for a non-profit, and private sector financing, in some form or other, may be the only way forward.

Taking a similar line of thinking, in 2010 I founded a sort of “premium Khan Academy” called RevisionBox.com, targeted at the UK market. We reasoned that the healthy UK market for private tutors and the ability of a superior product to create significant value made this a highly viable business. Specifically our product was:

·         Premium: we sourced some of the best teachers in the country, used a professional film crew and utilized the latest in graphics technology for a high end look and feel

·         Focused on the UK curriculum: which required students to know a very specific set of things that were often not covered on non UK specific YouTube videos

·         Accurate: all of our videos were reviewed multiple times by qualified educators to screen for mistakes

While our product was highly differentiated and the value we were creating undoubtedly justified our price point, selling to consumers proved difficult. This was because they perceived they could get a similar product for free or that they “should” be getting this product for free, an issue encountered by premium content producers across the internet. Furthermore, selling to school districts was equally problematic, with teachers unions having tight control on where budgets could be allocated and centralized purchasing agreements already in place with textbooks manufacturers and other materials providers.

All of this led me to conclude that despite the massive potential for online start-ups to create huge value in this sector, it will be very difficult for any to gain traction until one of two things happens: Either consumers need to become much more willing to pay for premium online services (something that could conceivably be on the horizon) or governments need to change the way they allocate education spending, with far more power devolved to local school leaders. Until this happens, success will remain elusive in K12 and will be confined to those that can deliver an entire qualification from end to end, such as the University of Phoenix with its online MBA.


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So this year a lot of my time has been dedicated to The Harbus, HBS’s independent student newspaper. We are 100% self funded (other than the fact that we are supplied office space) and survive mostly through advertising sold in the physical newspaper.

As most anyone can imagine, ad revenues have taken a nose dive over the last 4 years. With the economic troubles, we seem to have been crowded out of our advertisers’ wallets. This is troubling because The Harbus has a historical dependence on that sole source of revenue.

The trends that are conflating to sting the newspaper industry include digital media, social networking, “virality” in general, and the ever-expanding amount of content being posted, streamed, and downloaded over the internet. As with any innovative industry, commoditization means a wealth of options to the customer and diminishing margins for the producer.

On this end, The Harbus’ problems are exacerbated because we are particularly reliant on one type of advertiser: Corporate Recruiters. There are two sides to this problem. First, corporate recruiters have realized that they have a great deal of options for reaching out to HBS students. Sponsoring a SA TGIF event exposes the company to hundreds of thirsty RC students in search of free beer and snacks on a Friday afternoon. Because The Harbus as an organization has not provided companies with a higher value proposition, due to lack of analytics, content quality concerns, and decreasing student engagement, companies have begun questioning our sales claims.

The second problem has been on the content side. Informal reader interviews have pointed out that, over the last few years, quality has suffered. The exact reason for the, which is mostly a thesis at this point, is that students have become much less engaged since the start of the 21st century. Which brings us to a classic network effects discussion: if the content is good, more and more students want to be involved with and passionate about The Harbus, making the content all the better, in turn attracting more students to get involved. When this cycle is broken at some point, reviving the spirit takes tremendous time and effort.

The core question reveals itself: How does The Harbus offer greater value to advertisers while engaging student interest? A big part of the answer, we believe, is leveraging the power of digital media. I believe that the physical newspaper will always be a part of HBS culture, but this is not to say that we cannot complement that with a strong online presence. Huge strides have been taken to increase usability of our website, by making design and content distribution changes. We have also taken steps toward monetization through Google AdWords and are researching direct sales possibilities. Social networking has become an important initiative, through standard channels like Facebook and Twitter and through syndicating our content to other websites. We believe the exposure increases, we offer more incentive to students to get involved in our operation. We also attract a broader audience and can engage the HBS community through multiple channels. Because the online side makes it easier for us to compile data, we become able to offer advertisers a more attractive service.

By strengthening The Harbus brand and the related network effects, we see a way to make our newspaper a sustainable institution. In the future, we also see possibilities for ancillary products that utilize The Harbus’ human resources and position on campus.

To get involved, contact me at publisher@harbus.org

Visit our website at www.harbus.org


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