A solution that found a problem

Several years ago, one of my students was involved in a business plan concept to use video board graphics processing units to provide extra processing power. The problem was this was a technology — or a solution — without a well-defined problem.

In this morning’s Merc, there was a story about TechniScan, a Salt Lake City company that is using GPU to enhance image processing of medical images (such as CAT scans). This is the targeted solution that my students lacked: a bounded technical problem (in terms of developing code and algorithms) with a well-defined group of customers with similar needs. If ever GPU processing is going to turn into a business, this would be it.

Ironically, the market they’re targeting is not a new one. Back in 1987, when my company was brand new, Peter Marx came down to Vista from Harbor-UCLA Medical Center to tell me how someday all medical imaging would be stored on computers. (At the time, the idea of images being stored on Sun workstations would have been considered technically challenging). He showed me all sorts of cool images that he’d processed on his Macintosh II.

Peter clearly had the right idea, but both the digital image generation and the host-based processing power were decades away.

So here we have examples of some of the factors that distinguish an incipient opportunity from a real one: a well-defined customer with a well-defined problem, and of course technical feasibility to do something about that problem.

Innovation is more than invention

We thought we were home run hitters, but then we learned that we were born on third base. — Attributed to an AT&T alumnus

This quote by Stanford economist Tim Bresnhan (at Tuesday‘s State of the Net West conference) nicely captures the key problem facing innovative engineers working for any company smaller than the old Ma Bell.

Bell Telephone Laboratories had a better research staff (and working conditions) than all but a handful of universities. The monopoly profits of The Phone Company fueled some of the greatest inventions and scientific discoveries of the latter 20th century — things like lasers, satellites, information theory, etc. etc.

However, as this quote suggests, there are two reasons why such inventive output doesn’t provide a good measure of success:

• It’s easy to bring technology to market (e.g. electronic switching, microwave long distance) if your captive customers comprise 90+% of the largest economy in the world.
• When you can’t bring your expensive new technology to market, the guaranteed rate of return means there is no penalty for waste or inefficiency.

Invention is never enough. Except at Ma Bell, big innovations require (as Hank Chesbrough demonstrated in his Xerox studies) a business model and someone entrepreneurial enough to create a market if it doesn’t exist already.