Exponential Trends of the Past

The ‘Victorian Internet‘, better known as the telegraph, had at the start of 1846 an experimental 40-mile line (64 kilometer) between Washington D.C. and Baltimore. By 1850, it had grown to 12,000 miles (19,200 kilometers). In 1858 the first transatlantic cable had entered service.

The first postcard was sent in 1871. By 1873, more than 72 million had been sent and received.

In 1896, Thomas Edison projected the first motion pictures in a New York music hall. By 1910 the still nascient motion picture industry churned out 200 reels per week. And this despite the best efforts of Edison’s lawyers to stop them from infringing on his patents.

The Great Acceleration

We talk about exponential trends, as if this were a thing of our times, while our great-grandparents and their grandparents already experienced exponential growth. And in fact, back then concerns about those new technologies were a matter of heated public discussions. A reason why so many more people today are concerned is the acceleration of change. It’s not a change in the form of a continuation, but change is accelerating. Acceleration is inherent of exponential trends. At the beginning of a trend we may not even be able to notice it. After all a doubling from one to two seems slow. Another doubling from two to four is still hardly noticeable. This can go on for some time, until we reach, let’s say, something like a billion. And then doubling from one billion to two, from two to four and so on hits us like an unexpected flashlight.

Exponential Adoption (C) Enterprise Garage

Der Mensch ist auf lineare Veränderungen eingestellt. Das Problem mit unserem Verstand beginnt, Humans are tuned for linear change. The trouble with our mind starts when we need to imagine exponential changes. The chess and rice problem from the Arab world a thousand years ago describes that in vivid pictures. According to legend, the inventor of chess asked for a seemingly humble gift as prize from the ruler for inventing the game. A rice corn on the first chess field, two on the second field, four on the third field, and so on. With 64 fields this quickly would outstrip the world’s resources in rice. If the legend is to be believed, the request didn’t end well. The ruler ordered the inventor to be beheaded.

Detecting Exponential When It’s Not Yet Detectable?

Exponential trends do not come undetectable. They are only creeping stealthily on those that don’t pay attention and forget to learn the lessons from the past. The signals are visible, but they may be spread across different disciplines. Take Kodak and film. Kodak’s motto of the day was “The Kodak Moment” with the believe that humans always want to print their pictures and keep them like this. An estimate sets the numbers of pictures taken today at 10 trillion(!) photos annually. Compare that to roughly 10 billion in 1960 and 25 billion in 1980. Just the simple act of printing all the pictures taken this year would deplete all of our forests within a few days.

The irony of the story is that the digital camera was invented by a Kodak engineer. But management could not imagine any use beyond the narrow view of film paper. Kodak after all owned 85% of the film paper market. And Kodak’s competitor Polaroid suffered the same fate.

One element in the art of detecting trends is by going beyond your own discipline and monitoring seemingly unrelated fields. In Kodak’s case this would have been computer software, electronics, but also shifts in behaviors and business models. A trend is not just formed by technology. It comes in a combination of multiple types of innovation.

Larry Keeley; Ten Types of Innovation: The Discipline of Building Breakthroughs; Wiley, 2013

Steve Ballmer, former CEO of Microsoft, famously dismissed the iPhone in 2007:

Now we’ll get a chance to go through this again in phones and music players. There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get.

But he had something else in mind, that lead him to this assessment, and it was that he couldn’t imagine another type of innovation that came with the iPhone. Namely one that introduced a new business model to the telecommunications industry. And today he regrets his quote from 2007:

“I wish I’d thought about the model of subsidizing phones through the operators,” he said. “You know, people like to point to this quote where I said iPhones will never sell because the price at $600 or $700 was too high. And there was business model innovation by Apple to get it essentially built into the monthly cell phone bill.”

The Role of Foresight Thinking™

Foresight Thinking™ now is a methodology that includes signal detection from multiple disciplines. An isolated signal in your field or in a technology may be easy to miss. But expanding the dragnet to other disciplines and types of innovation suddenly turns weak signals into alarming beacons.

I will talk about applying this and other steps to Foresight Thinking™ in the next articles.

Leave a Reply