Quebec Valley

While trying to catch-up with my pile of magazines (yes I do offline reading too!) I came across a very interesting article in the september edition of eWeek.

There is an article entitled “A rusty future for Silicon Valley?” where Judy Estrin, the former Cisco CTO, says that if the valley doesn’t innovate more, it will be doomed just like Flint, Michigan. 

For those of you who don’t know Flint, let’s just say that it was hit so badly by the american car industry spiraling down that you can actually buy a house for 2000$.

Yes, that’s not a typo – 2 grands.

You could probably tear it down and make a profit but that’s not the point.

The point is that in the 1980’s the american car makers started to feel the pressure from foreign makers.They found their saviour – the SUV. The SUV was not an innovation at all but it was nice and served the american market very well. Most importantly, this was something not offered by the foreign car makers (at least back then). Throw in some government help (tax break for large vehicules and relaxed fuel consumption standards) and the auto industry should live a bit longer. 

However, as we all know it, the story changed. SUV’s are now produced by any car maker and fuel consumption eventually caught up. As a result, it sucks to be an american auto maker CEO today. 

• There is no vision/product
• Their market is crashing
• They have no plan

What was the problem? The SUV was not an innovation at all. It was basically a familly oriented truck. What is innovation? Toyota has been working on hybrid cars since 1994 and sold their first model in 1997. That’s more than 10 years ago. Compare this to Ford who released its hybrid SUV in 2004 (7 years ago). I think that even in the car industry, 7 years is too long.

That’s exactly what’s going on in the high tech area. Every quarter, big companies like Dell and IBM tell analysts not to worry – what is not sold in the US will be sold in emerging countries (Brazil, China, Russia, etc.)

That’s not innovation!

There is, however, innovation in the Valley. Apple and Google are quite good at it. Intel knows that shrinking the chips is just like selling SUV (smaller chips don’t sell more). They are putting software control in the hardware and driving revolutionary PC designs.

So next time you work on a product, tell yourself: Am I creating something new or just moving my actual market to another product and not gaining anything in the end?