This is a repost of Steve Faktor’s original Forbes article
My business is helping companies speed up innovation – often by partnering with tech startups. A wilder ride compared to my days leading innovation at Fortune 100 companies. But lately, I’ve experienced enough déjà vu to get a platinum medical marijuana card. Maybe you’ve heard of “multiple discovery”. The theory says that similar inventions happen simultaneously because of converging technologies and common problems. Among mobile payments and loyalty startups, easy money is fueling what I call “marginal discovery” – slight variations on similar ideas. For every truly outstanding startup, five or six have a faulty premise, fail to solve a problem, or choose “cool” over simple. To protect the innocent, I’ve turned my list of frustrations into a set of “rules” to help budding entrepreneurs and experienced executives steer clear of the weed dispensary…
Having led innovation at Amex, MasterCard and Citi, I know where the bodies are buried. I also know that payment wars aren’t just about fees anymore. That’s so 1990′s. Years ago, when Walmart threatened to enter payments and banking, incumbents nearly soiled their Hanes. After a little sword-fighting, providers slashed their margins so thin, big merchants had no incentive to do their own thing. This time it’s different. Payments companies are not the real threat.
Today’s war is about data and its power to shift loyalties. In the arms race to probe customers’ deepest, darkest desires, card companies and merchants find themselves bringing spitballs to a gunfight. So, I’m not surprised to see Walmart, Target and others are starting their own 99% movement. Big retailers are launching their own mobile payments system. This is the first of many moves you can expect by merchants to liberate themselves of increasingly omnipotent middlemen. Below are three reasons retailers’ strategy makes sense
Hyper-connected tech blogger Robert Scoble, recently wrote about treating startups more critically. Robert found himself meeting with lots of crappy, over-funded, digital startups that desperately need more time in the oven, an intervention by Dr. Drew, or more likely, Dr. Kevorkian. (My words, not Robert’s.) Not only am I seeing the same things, but I’d take it a step further. I believe this current crop of entrepreneurs might actually be hurting America - and perverting the very idea of innovation in the same way Beyonce’s Run The World is like kicking Aretha Franklin in the ribs…repeatedly. All is not lost. There are ways to take advantage of this situation, though it’s way too late to save this song:
It wasn’t long ago that bashing Microsoft was as cool as Hootie and the Blowfish and Blossom. There was no shortage of material – mangled pasting in Office, hideous mobile apps, and spooky Windows error messages that made you build a panic room. Even governments got in on it. The EU forced Microsoft to remove anti-competitive features from Windows. I think they even made Bill Gates perform The Nutcracker at a Belgian waffle house. Things have changed. Google and Apple now make Microsoft seem downright cuddly and lovable. Rather than send CEO Steve Ballmer a teddy bear to celebrate this budding bromance, I thought I’d give him something far more practical – an iPhone. I’m joking. I’d like to propose a way to revive Windows Phone 7, the company’s creative, but struggling new mobile operating system. Sadly, these advanced phones are already sharing a discount rack with rotary dial Nokias and the Motorola RAZR MC Hammer Edition.
These are triumphant times for humans. We are decisive winners of Darwin’s game. Sure, an occasional rhino might trample your safari group, or a Xanax-addled chimp might not like your friend’s new hair cut. But in most situations, the human is king. Like prepping Alec Baldwin for a love scene, we can shave down any forest, barbecue any animal, even send a bullet-proof Pope to The Bronx. We are invincible! With all natural threats eliminated, what’s a conqueror to do? Wait for the aliens? No. We create our own enemies. I’m not talking about dirty bombs, Terminators, or Chinese milk. I’m referring to the weapon of doom in your pants right now – your cell phone.
This week, Google was sued for $100K when a woman got hit by a car after following Google Maps to the bitter end. She lived…and will likely procreate. Sadly, she is not alone. In New York, we’re surrounded by people who listen to music, operate iPhones, read Kindles, or craft winkey faces to their mistresses – as they CROSS THE STREET!
Last Saturday, my father gave me a ride from Brooklyn to Manhattan. Not only was this a great way to get a life lecture from an all-knowing immigrant while trapped in his car, it was also a lesson in price inefficiency. Driving is a series of small decisions. The biggest one on this trip was whether to take the Brooklyn Bridge (free) or the Battery Tunnel ($5.50 toll). Hundreds of other drivers were making that same choice. Guess which one had unbearable gridlock? Yes, the free one. An indicator that the toll was mis-priced, at least for that time or group of drivers.