Category Archives: 21st Century Company

Changing the course of health care investment

rocket launch

Lean LaunchPad |
[Via  Steve Blank]

We’re deep into week 2 of teaching a Lean LaunchPad class for Life Sciences and Health Care (therapeutics, diagnostics, devices and digital health) this October at UCSF with a team of veteran venture capitalists. Part 1 of this post described the issues in the drug discovery. Part 2 covered medical devices and digital health. Part 3  described what we’re going to do about it. This is post is a brief snapshot of our progress.


I have been following Steve Blank’s journey into disrupting the way healthcare companies are funded off and on. He has brought the ‘Moneyball’ approach to funding, by using data rather than gut feelings.

As any good scientist does, he wants to do n experiment – can he teach a class on these principles to help startups get funding in a more defined way. And to change the VC industry, especially in healthcare, from looking only for home runs and perhaps consider that 3-4 singles will accomplish the same things.

As I have written before, the cost to get drugs to market today is simply too long and expensive. We must find better approaches. And this approach might just help us get there.

As with any experiment, it may not explain everything. But, as this video shows, it can help us create a better model for success.

#CrowdGrant 23 more days to Consider the Facts

1 26 2011google

So much going on that this blog has not been updated for awhile. Consider the Facts is a fun experiment into crowdfunding research projects. It will provide the tools to examine how we might change people’s views about the future.

We have some things to do during the dead time the efforts are now in – people usually only focus their interest the first week or so and the last week or so.

The middle month is not the most interesting.

But go take a look at the site. we have some drafts of the illustrations for the short narrative.

How a company organizes itself matters

Understanding Apple’s Organizational Structure
[Via asymco]

Apple has hired a new VP who will report directly to Tim Cook. Paul Deneve is cited as having responsibility for “special projects” and will report directly to Tim Cook.

The previous roles as a manager in luxury brand companies has led to a great deal of speculation about what new projects Apple could be working on that might also fit this new manager’s background and title.

The most commonly cited speculation is around the iWatch or TV product lines (with some surprised that he will not be heading Retail.)

Although reading “luxury product CEO” and concluding “new luxury products” seems logical, a little knowledge about how Apple is organized dispels this notion. And a little knowledge happens to be about all we have, as Apple’s organization is one of its most closely guarded secrets. Even employees at Apple have little idea of how the company is organized. What we do know is summarized into this org chart:

Screen Shot 2013-07-03 at 7-3-3.37.27 PM



We have heard al ot recently about Microsoft’s new re-organization. They are organizing around function, not devices.

I wonder where they got that idea from?

A 21st century company needs to foster collaboration and that is done by organizing around functions that everyone needs for each product. This ends up creating a lot of purposeful conversations about proper use of resources, etc. that often leads to much greater efficiencies than when things are simply focussed on a product silo.

Aymco is wrong: there are several Apple imitators

apple by A Guy Taking Pictures

Why doesn’t anybody copy Apple?
[Via asymco]

Apple’s products are the envy of the world. They have been spectacularly successful and are widely imitated, if not copied. The expectation that precedes a new Apple product launch is only matched by the expectation of the replication of those products by competitors.

This cycle of product mimicry was succinctly summarized by Marc Andreessen regarding a rumored Apple TV product:

And once the television launches, everyone will scramble to copy it. ”There’s a pattern in our industry, Apple crystallizes the product, and the minute Apple crystallizes it, then everyone knows how to compete.”

This idea that the basis of competition is set by Apple and then the race is on to climb the trajectory of improvement is so well understood that it’s axiomatic: “It’s just the way things are.” Apple releases a product that defines a category or disrupts an industry and it becomes obvious what needs to be built.

But what I wonder is why there isn’t a desire to copy Apple’s product creation process. Why isn’t the catalyst for a new category or disruption put forward by another company? More precisely, why isn’t there another company which consistently re-defines categories and repeatedly, predictably even, re-defines how technology is used.

Put another way: Why is it that everyone wants to copy Apple’s products but nobody wants to copy being Apple?


I would submit that the question is wrong. There are several companies that have copied Apple – at least the Apple of Steve Jobs. Aysmco simply comes at the answer from the wrong view.

I say a few examples of those companies are Facebook, Google, Amazon and Tesla. “Why isn’t there another company which consistently re-defines categories and repeatedly, predictably even, re-defines how technology is used.” Asymco seems to miss the forest for the trees.

He even quotes Tim Cook who does have the answer:

Innovation is deeply embedded in Apple’s culture. The boldness, the ambition, the belief that there are no limits, the desire among our people to not just make good products [but to] make the very best products in the world. It’s in the values. It’s in the DNA of the company.

Read Increasing Returns and the New World of Business published in 1996 in the Harvard Business Review by W. Brian Arthur. You will see he described how to copy Apple while actually missing the changes Apple was making at the time. 

Even he did not see Apple coming, thinking it was MS that would lead. But he hit the nail on the head with how to recognize the leaders.

He says corporate leaders need to ask themselves 4 questions if they hope to lead the new economy:

  • Do I understand the feedbacks in my market?
  • Which ecologies am I in?
  • Do I have the resources to play?
  • What games are coming next? 

Now, there are many answers to these questions but I think there is a really easy rule that all these companies seem to exhibit – the feelings of Wall Street is only slightly material, if at all, to their plans.

Wall Street is useful for getting money to do what they want. But as for advice, well, Wall Street can pound sand for all they care.

The companies I mentioned all understand one thing – Wall Street is not a feedback. They know that their ecologies depend on empowering people, not making Wall Street richer. They generally create their own resources by their own creativity than by relying on Wall Street to provide the know how. And they know what games are coming next because they are creating them.

21st Century Companies, in contrast to normal ones, simply do not care very much about what Wall Street really thinks of them and are generally disdainful of Wall Street. Compare this to the normal CEO who seems tremendously cowed by Wall Street and worries every quarter of what to do to make them happy.

I think this is because these CEOs see their company as only a means to an end, as a way to cash out big time, not as a feeder for innovation.

In fact, the leaders of these Apple-imitating companies do not see cashing out Wall Street style as the next step – something most Wall Street types find confusing as they certainly would cash out if they could. Jobs, Musk, Bezos and others like them see their company as the end in itself and money as a means to that end. 

It is completely backwards from normal CEO worldviews. They have no exit strategy because they never expect to exit.

Apple under Jobs really cared little what Wall Street thought about  what it accomplished. It focussed on the feedback from its customers.

So it hoards billions of dollars and keeps little debt because that allows it to meet the feedback rapidly, even if Wall Street hates it and does not understand. And Wall Street gives Apple a very low PE ratio and Apple does not really care (we shall see how well Tim Cook really understands this lack of Wall Street feedback.)

Amazon barely has a profit and sells its tablets at a loss. In fact, Bezos seems to be quite happy barely making a profit while he increases the computing power of Amazon to eventually provide servers for all. Wall Street again fails to really understand, giving Amazon a PE ratio in the 1000s.

Facebook, while a public company, is still controlled by Zuckerberg not by any other investors. Yep, he took the company public yet still maintains a controlling interest. How in the world did that happen and why did Wall Street agree? I don’t know but Zuck can tell Wall Street to pound sand. He does not care and is free to do whatever he want.

In fact, I would say that the hallmark of a company that has successfully copied Apple is one that could really care less about what Wall Street says. They have created their own economy, their own ecology, that needs little feedback from Wall Street. They are successful in creating a sustainable company without being at the beck and call of Wall Street.

That is how you copy Apple.

Beginning of a new paradigm in health – keeping healthy people healthy


Smartphones May Be the Key to Better Health Care
[Via Apple Hot News]

The best tool to improve and keep track of your health may be in your pocket, says Dr. Eric Topol, a pioneering figure in “wireless medicine” — the practice of using apps and devices in health care. An article from NBC News describes how new apps for iPhone and other devices can measure vital signs and even detect whether someone is having a heart attack. “These days, I’m prescribing a lot more apps than I am medications,” says Dr. Topol. “The smartphone will be the hub of the future of medicine.”


The linked article shows the powerful use of technology to deal with a health emergency. Thanks to the smartphone, people have the equivalent of a supercomputer in their hands, capable of doing amazing things.

At the moment, the health arena is focussed on making sick people healthy. That has been incredibly helpful over the years but is beginning to reach its terminal end. It is simply becoming more and more expensive to gain even small increases in quality of life.

But, in a few short years, each of us will be able to collect huge amounts of data on our own personal health. Medicine will become personal.

Lee Hood – whom I have known since my days at CalTech when he taught me immunology – has been describing his vision of “P4 medicine” for years – predictive, preventative, personalized and participatory.

What happens when everyone has access to their own genetic information? What happens when each of us is wearing a wireless patch, one that constantly records thousands of data points on our personal metabolism and downloads that our computers? What happens when we can measure our own personal prescription drug levels daily, knowing exactly how long a therapeutic dose lasts for multiple drugs rather than rely on the probabilistic  information for a single drug we deal with today?

How much cheaper will it be to catch health problems early? How much cheaper will it be to deal with people whose systems are just beginning to develop problems instead of seeing them long after they are sick?

We now have evidence that we can detect diseases such as the flu days before the symptoms become apparent. What happens when we become able to detect cancer years before symptoms?

The rapidly decreasing price of goods and services seen in the exponential economy will hit current medical practices hard. People will find ways to get the data that they want.

Right now I have a Fitbit to measure my activities and a balance to measure my weight/body fat percentage. Both dump the information to my computer wirelessly. I am creating a database. Throw in a daily log of my exercise/food and I can now track my weight lose/gain based on several measures. All this data is available to me via any digital device I have. I can easily track how my weight and body fat changes based on what I eat and do, not based on what research shows works for a general population.

Things how this will change medicine, especially when people have access to much more information. What this will also mean is that people will need better/different filters to explain and mine the data for them. I expect that we will see the growth of a huge industry to service this data for people.

Current medicine really only deals with biological systems after they begin failing. It can cost a lot to get the systems back in working order. Fixing them before the really become a problem will be the goal of 21st cebtury medicine.

Keeping healthy people healthy.

To survive a shock to the system become an unplanned organization

water ripplesby robin_24

What Happens When We Shock A System? 
[Via Chaotic Ripple]

Have you ever noticed that some things in the world like to be disrupted?  Rogue militant groups set out to garner counter-attacks that distract their opponents while draining their resources.  Viruses encourage multi-cellular organisms to activate their immune systems in attempts to wipe them out.  Teenagers seek the disdain — and occasional wrath— of authority figures in their lives.

These seemingly counter intuitive behaviors are the centerpiece of Nassim Nicholas Taleb’s new book, Antifragile: Things that Gain from Disorder.  They are the “teachable moments” that enable us to truly understand the driving dynamics of systems that undergo shock.  Indeed, there are entire categories of systems that benefit from disruption.

As a first example, consider the wave of new startups that arise in the aftermath of economic collapse.  The entrepreneurs who have long awaited the opportunity to step out from under the constraints of a prior paradigm are free to explore and create anew.  We are seeing this all around us in the exploding field of social entrepreneurship today.  Those companies whose legacy has been to rape and pillage, laying waste to vast ecosystems of the natural and social worlds, held the attention of financiers for decades.  And now that many core institutions of the old world order — particularly the financial ones – have deteriorated to the point of ruin, those among us who strive to create business and have a moral conscience at the same time are able to step in and fill the void.


As a biologist by training, so much of what Joe Brewer describes here is indicative to me of the messiness of biological systems — the ability to deal with fragility in a robust way, to bend without breaking, to deal with shocks in ways necessary to survive, etc. It reminds me of Margret Wheatley’s work on the Unplanned Organization.

I wrote a series about The Synthetic Company a few years ago that incorporate Margaret’s ideas. One aspect that I think is critical for any anti-fragile system is what she calls a leader-full organization.

I also want to emphasize that emergent organizations are leader-full, not leaderless. Leaders emerge and recede as needed. Leadership is a series of behaviors rather than a role for heroes.

Part of what allows these groups to deal with unforeseen shocks in a resilient way is that the appropriate leader can rise up to take control and then become a follower later on when the shock recedes and another type of leadership is needed.

We see this again and again throughout history, as well as in our most entrepreneurial companies: the person who is best suited for dealing with one sort of shock (war, raising capital) is seldom the best for dealing with another shock (peace, shareholders, etc.) Since we cannot know what shocks are in store, nor what is really fragile in an organization, a robust solution to a world of shocks is to create a group of diverse and somewhat redundant talents with leadership dispersed in a way to allow the right talent to rise up when a particular shock hits the system.

Full of leaders who can follow when needed. Full of followers who can lead when required.

And, not too surprisingly, this organizational hierarchy collapses into something that resembles not only the biochemical networks seen in living cells but also the computer networks seen on the Internet. It seems that almost all systems that need to deal with fragility, robustness and the shocks of a rapidly changing world begin to look alike in some ways.


I believe that this is a hallmark of the sorts of organizations that will thrive in the 21st century, that can deal with the shocks of rapid change in ways to advance and grow. 

7 lessons for managing groups in the exponential economy learned from the elections

monster waveby Jeff Rowley Big Wave Surfer

How Team Obama’s tech efficiency left Romney IT in dust
[Via Ars Technica]

Despite running a campaign with about twice the money and twice the staff of Governor Mitt Romney’s presidential bid, President Barack Obama’s campaign under-spent Romney’s on IT products and services by $14.5 million, putting the money instead into building an internal tech team. Based on an Ars analysis of Federal Election Commission filings, the Obama campaign, all-inclusive, spent $9.3 million on technology services and consulting and under $2 million on internal technology-related payroll.

The bottom line is that the Obama campaign’s emphasis on people over capital and use of open-source tools to develop and operate its sophisticated cloud-based infrastructure ended up actually saving the campaign money. As Scott VanDenPlas, lead DevOps for Obama for America put it in an e-mail interview with Ars, “A lesson which we took to heart from 2008 [was that] operational efficiency is an enormous strategic advantage.”

The Romney campaign spent $23.6 million on outside technology services—most of it on outside “digital media” consulting and data management. It outsourced most of its basic IT operations, while the Obama campaign did the opposite—buying hardware and software licenses, and hiring its own IT department. Just how much emphasis the Obama campaign put on IT is demonstrated by the fact that the campaign’s most highly paid staff member was its CIO, Michael Slaby, with an annualized salary of about $130,000.


Failures can be as important as successes in an exponential economy. A useful failure can inform more than some successes. The lower barriers that an exponential economy produces means that failure only presents short term costs that can be rapidly dealt with by longer term successes.

That is, a failure does not necessarily doom an effort, if that failure can be rapidly leveraged to get to success. If you wipe out, but learn from it, then when the next wave comes along, you’ll stay on top of it.

In an exponential economy, there is always another wave to successfully surf.

If, that is, the organization can understand how to manage and utilize the advantages that an exponential economy produces. Here are 7 points to consider.

Interestingly, the Obama campaign hired its IT people internally and used external infrastructure. The Romney campaign hired its IT people externally but created internal infrastructure. That seems to have made a big difference.

The Obama group attracted people interested in  a start-up environment that was also a short-term commitment – it would all be over the day after the election. Romney contracted with data consultants and such in organizations that would live on afterwards.

To one, the election was a one-shot attempt at success while for the others it was just one more notch in their consulting gun.

The former really seemed to attract a disrupter mentality much more, one who really liked finding ways around the limitations that were placed in their way, rather than a type that could just find billable hours.

“Campaigns are serious tests of your creativity and foresight,” VanDenPlas explained. “They are unpredictable, agile, and short—an 18 month, $1 billion, essentially disposable organization. Hackers can thrive in an environment like that, to a point where I’m not sure anyone else really can. Everything is over far too quickly to get boring.”

1) Hire the right type of employees. Do not hire doers when disruptors are needed. And vice versa.

Using Amazon Web Services, instead of building their own servers, allowed the Obama for America group to pay for just the amount of server space they needed, when they needed it. They could expand into servers in different regions of the US in order to reduce loads and latency. Romney had everything route to one location, which crashed.

2) Leverage the exponential economy for services and infrastructure. Better to be smart rather than perfect. Better to seek adaptability over control.

Obama for America put their money into people, not into hardware. They spent twice as much money as Romney but also had twice the staff. They actually underspent Romney on IT services and hardware.

This is what the exponential economy does  – the cost for things becomes cheaper. A smart organization puts the savings into people, which cannot be easily replaced by digital processes.

By finding the right people and paying them for being the right people, Obama for America produced over 200 apps in an 18 month period, using just about every Open Source approach that is around.

3) Use the savings from the exponential economy to pay for the best people, not for the cheapest. 

And they used their community for help:

The human factor in monitoring is huge. There are countless incidents where (OFA User Support Director) Brady Kriss notified us of pending problems derived from community help tickets.”

Romney’s group kept ORCA a secret  – such a secret that no one wants to claim they even worked on it – and did only small amounts of testing  before it was needed. They completely lost the advantage of having crowds to help perfect the apps.

Crowd feedback is important. Lots of testing and resilience is needed to create large numbers of solid apps. The fundraising segment, for example,  was “a multi-region, geolocated, three facility processor capable of a per second transaction count sufficiently high enough that we failed to be able to reach it in load testing. It could also operate if every other dependent service had failed, including its own database and every vendor.”

This complexity can only be reached after actual testing by users.

4) Get your products into the actual hands of actual people as soon as possible. They are best able to find problems.

Redundancy and adaptability go hand in hand. For example, the Obama crew created an app whose only job was to take ‘snaphots’ of the Obama for America website. If a server failed, and the site could no longer dynamically create web pages, the static ‘pictures’ could be used in the interim.

Or, more amazingly, they dealt with Hurricane Sandy, which had severe impacts with people using East Coast server farms, by replicating a complete and functional copy of their whole infrastructure on West Coast servers in 24 hours!

5) Use the benefits of the exponential economy to create resilient and redundant systems. If the price has dropped 5-fold, then you can build two systems and still save money.

The Obama campaign spent over $1 million hosting the website  that was accessible to the world. It gave a quarter of that to Amazon for hosting its own internally developed IT.

Romney’s campaign gave a single IT consulting company over $17 million  and another $16.6 million to another,  Obama for America spent $3.6 million on IT consulting to 36 different  companies.

The Innovator’s Dilemma describes how a $50,000 contract to a small group can produce much more focussed work and innovative solutions than even a $500,000 contract to a large group. They care about it more because it matters more to their bottom line.

6) Spread the work around. It is more likely to produce successful solutions than one big contract. It certainly can cost less.

And finally, 

“This is the difference,” VanDenPlas said, “between a well run professional machine and a gaggle of amateurs, posing in true Rumsfeldian fashion, who ‘don’t know what they don’t know.’ I would be shocked if such a chasm exists next cycle between the parties—these aren’t mistakes to be repeated if you want to do things like win elections.”

Because of the lower barriers to entry, and the rapidity by which successful processes can disseminate throughout society, everyone catches up quickly. You cannot expect that coming up with something first will provide much of a long term advantage.

The way to stay ahead is to have the right mixture of people cranking the DIKW cycle as fast as possible. As long as your organization can move that cycle faster and smarter than others, you will stay on top of the wave.

7)  Continuing rapid cycle development is crucial. Any advantage to accrues to disruptive innovators rapidly disappears, as others follow the path to success.

It is impossible to successfully ride every wave of change. But, creating and managing for the exponential economy can produce an organization scores well when the monster waves arrive.