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Standing on the Shoulders of Giants: Understanding How Progress Happens and Creating a Culture of Creativity

Manifesting Ideas Into Reality From Florentine Bottegas to Studios, Labs and R&D

Image of ‘Tony Stark’ in the Iron Man (2008), by Marvel

Image of ‘Tony Stark’ in the Iron Man (2008), by Marvel

Next to a roaring furnace, a tall and muscular man is hard at work. His face is sweaty and his brow is furrowed in concentration as he pounds hot metal pulled out of his forge with large tongs. Sparks fly off the metal that glows bright orange and fiery red. Occasionally, a spark will touch his skin, but he does not flinch. Every muscle in his arms is put to work. With precision, he warms wrought iron pieces to almost a white heat and then hammers them together, welding them fast into one indistinguishable piece. Again and again, he repeats the process until he has fifty matching railings, all exquisite in their design and craftsmanship. As he lays each final piece down on a rack to cool, the blacksmith however, shakes his head, unsatisfied. Each piece, the same in length, has a slightly different weight. The hours pass by as he labor away, and finally produces a batch of final implements that meet his discerning eye.

Image via StatueCrafts

Image via StatueCrafts

Supreme craftsmanship in creating powerful yet exquisite tools defined the blacksmith of old. It was no wonder that around such skill and talent, myths and legends sprouted in abundance. Heralded as the artisan of the gods in Greek and Roman mythology, Hephaestus was a blacksmith whose forge was a volcano. In Germanic myths, Völundr was a heroic blacksmith who forged gorgeous gold rings inlaid with sparkling gems. Captured by a cruel king and sequestered on an island, Völundr exacted his revenge by killing the king’s sons, seducing his daughter and escaping on wings that he had forged. In ancient Japan, Masamune was a legendary blacksmith and swords with who not only constructed powerful weapons for samurais, but also taught his students the ways of warfare.

In times of war, having experienced blacksmiths that could create forge-welded axes, chisels, knives and spears, was indispensable. The blacksmith’s trade was not only exquisite to behold, but was also essential for survival.

With just a few tools available to him, such as bronze and later wrought iron and steel, the blacksmith, toiling for hours in his studio next to a blazing fire of charcoal, produced powerful tools for both agriculture and warfare. Creating a consistent temperature that was hot enough to weld the metal pieces, required a precise hand. Everything he did was dependent upon his expertise and careful craftsmanship. Replicating his work was not an easy task. It would take several centuries before the medieval blacksmith’s elegant work could ever be duplicated.

With the advent of the Industrial Revolution, the creation of more sophisticated tools and the availability of a larger labor force, the blacksmith could now create tools and implements much faster and replicate his work more easily. A craft once defined by a sole individual, can now be shared with a team. He also benefits from the modern assembly line and the ability to automate some work processes. Henry Ford’s remarkable invention of the everyday consumer’s automobile, the model T, building upon the original car developed by Carl Benz and founder of Daimler AG, is almost eclipsed by his creation of the modern assembly line — a methodology that surpassed all previous manufacturing up till that point in time.

Image of ‘Tony Stark’ in the Iron Man (2008), by Marvel

Image of ‘Tony Stark’ in the Iron Man (2008), by Marvel

The blacksmith of today is not limited by the same parameters of time or location. Modern advancements free him up to do what he loves best: to create. In many ways, he is right back at the drawing board, whether it is in his mind or conceptually laid out on paper or a computer screen, giving him the opportunity to create works that match his vision entirely.


Drawing Inspiration from Centuries of Craftsmanship

The word ‘create’ has long been associated with artisans, artistic endeavor and spiritual pursuits for eons. In terms of artisans, creating typically means building works of arts from scratch, that can be used for practical purposes such as pottery, wood frames and furniture. Artistic endeavor that does not fulfill a tangible, practical purpose, but an aesthetic one that inspires you, also falls under this description and is primarily attributed to works of art such as music, dance, sculpture and painting. In the Book of Genesis, in the Old Testament in the Bible, it says:

“Then God said, ‘Let us make man in our image, after our likeness; and let them have dominion over the fish of the sea, and over the birds of the air, and over the cattle, and over the earth, and over ever creeping thing that creeps upon the earth.’ So God created man is his own image, in the image of God he created him; male and female he created them.”
— Genesis 1:26-27, 2:22025
Michelangelo, Creation scenes, Sistine Chapel Ceiling, 1508-12, fresco (Vatican City, Rome)

Michelangelo, Creation scenes, Sistine Chapel Ceiling, 1508-12, fresco (Vatican City, Rome)

Creating is thus attributed to a divine act of God and thus a human being, when he or she creates, is thus imitating the will of God. During the height of the Renaissance movement in Europe, artistic creativity was at its peak. Artwork reflected a synthesis of these beliefs, with sculptures created idealistically to represent the best of humanity in the likeliness of God, while also revealing the artist’s hand.

Close up: Michelangelo, Delphic Sibyl, Sistine Chapel Ceiling, 1508-12, fresco (Vatican City, Rome)

Close up: Michelangelo, Delphic Sibyl, Sistine Chapel Ceiling, 1508-12, fresco (Vatican City, Rome)

Turning down one of Florence’s many winding streets today, you can see the descendants of ancient Etruscans who work with their hands to create individual works of art. The home of Leonardo da Vinci and Michelangelo, the city of Florence was once the heart of the Renaissance art movement. While Italy has changed dramatically, the Florentine bottega or workshop, even today reveals an atmosphere of passion and creativity, fueled by work by hand. These studios are often filled with ceramics, cameos, wood paintings and furniture today by amateur artists and antique restoration artists.

The difference today from our collective past is the opportunity at hand. The restrictions that previously limited creative growth are now lifted. An artist in Florence can continue to make wood paintings or sculptures in the tradition of old, while harnessing a new set of tools available through the web and via powerful software and computer systems.

1552059308-striscia ceramica.jpg
Workshop of La Vecchia Faenza where artisans use techniques and patterns from the 15th century. Photo by Andrea Piffari, Collezione Maramotti, Italy

Workshop of La Vecchia Faenza where artisans use techniques and patterns from the 15th century. Photo by Andrea Piffari, Collezione Maramotti, Italy


In the Last 150 Years: Accelerated Connectivity and Expanded Market Opportunities

In 1846, a twenty-seven year old man by the name of Elias Howe devised the first fully functioning sewing machine, available to the public. With that single invention, Howe revolutionized the clothing industry, giving birth to mass production of clothing quickly and lowering the barrier to entry. Later in 1884, after an embargo was imposed upon English clothing, Isaac M. Singer revised and produced the first electric sewing machine for personal use. A woman who used to make clothes for her family via the old-fashioned method of needle and thread and painstaking labor, could now set up her own shop and earn an income. The expansion of railroad lines all across the country, through the heartland, and into the frontier regions, offered larger opportunities where a tailor could ship goods from New York City to the West coast, thereby increasing market share substantially and earning a comfortable income.

One hundred and fifty years later, another invention would dramatically alter the course of human history, shaping social, cultural and economic dynamics. The personal computer, fully functional by 1976, changed the way people could communicate not only for work, but also for pleasure. The arrival and spreading of bandwidth on the Internet is akin to the expansion of the railroad, allowing the communication of information instantaneously. Just like the railroad enabled merchants to distribute clothing and other products to markets all over the country, dramatically increasing both market supply and demand with lower barriers to entry, bandwidth and wireless connectivity has enabled businesses to connect with consumers all over the world at a fraction of the previous cost, immediately. From a world of only tangible products with limited distribution, the economy has now evolved to where an individual located in a small town can reach a global audience.

The Gutenberg press for example, revolutionized the world of printing as monks no longer had to write out each word slowly through painstaking calligraphy. With the proliferation of presses, words could be reproduced in greater numbers and hence ideas of the world could be spread quickly, inexpensively and efficiently with greater larger areas of distribution and consistency. The Internet has further built upon and expanded upon these opportunities, enabling you to distribute your product or service beyond the confines of your town or city to national and international customers. The advent of such technologies, lowered barriers to entry and a seamless shortening of the innovation cycle, has enabled getting products and services out the door, faster than ever before.

“The central actor now is the consumer as the creator of his or her own world, and business better recognize that fast.”
— Peter Day, BBC's In Business reporter

A Need for Progress Studies and Pathways for Creativity

Looking at the course descriptions of university syllabi over the last twenty years, particularly in the last five years, you can see a remarkable difference. There is an increasing demand by students and changes made by younger faculty for courses that offer the ability to actually create. Only a few universities and colleges aim to answer this in any feasible way. Most formal education repeats the knowledge of the past, which is important to have. However, in order to understand how progress actually happens and how invention occurs, we need some methods of studying progress. How do we measure progress? How long does progress take? What accelerates progress? What holds progress back? What systems and practices exist today to nurture this?

Creativity is not something you can automate. However, we can nurture methods that foster creativity. What methods can be put together to encourage a culture of creativity and to facilitate the birth of new ideas? The importance of design-led culture and thus creativity through design, has gained traction in many high-performing companies. Patrick Collison, the founder of Stripe, a software infrastructure and payments company, and Tyler Cowen, an economics professor at George Mason University , examine this need for Progress Studies in this compelling article in The Atlantic.


What Does It Mean to Create Today?

In modern times, ‘to create’ means to bring something into existence. The word ‘create’ comes from the Latin verb creare, which means to produce. In Old English, the word create signifies forming out of nothing. What then does it mean to be a creator? A creator is thus someone who produces something new out of nothing. This can be anything — from traditional artistic media such as crafts, visual arts, music, poetry and architecture to a tangible or intangible (software for example) product or service or method of communication.

Creation of new ideas, technologies, systems and products have dramatically altered the way we communicate and work. They have radically improved our collective quality of life as human beings, as individuals and in relationship to one another. We build upon these strengths. We stand upon the shoulders of giants. We are free to pursue creative ideas because these inventions, systems and processes are available to us.


The 21st Century Makes Creation Easier, Faster and Builds Upon Centuries of Achievement

“Creators are in people in all of us whenever we go online.”
— Paul Saffo, of the Institute for the Future,

Over the last forty years, the Internet has spawned a global connectivity that has transformed the ways we do business, the ways we live and the ways we connect with each other. Each breakthrough has paved the way for new inventions and opportunities, big and small. Today we can harness sophisticated technology tools that alter our perceptions of time, location and connectivity. Many barriers to entry have also been lifted and as the innovation cycle shortens, it has become easier to take an idea from conception to execution than before. That does not deny the tremendous amount of effort required, but it does point to a change in how long it takes to execute an idea. The opportunity to engage in a global marketplace is unprecedented in its accessibility.

It took 100 years for electricity to be adopted by 60 million people worldwide. It took television thirteen years. It took Apple’s App Store just 13 months to reach that milestone. If the Industrial Revolution was transformative, consider how much the App economy has changed the world.

This is the opportunity inherent in today’s creator economy. This vast opportunity comes with its own challenges, but attracts individuals with ambition and a deep desire to create, whether it is on their own or with a company or a team united in purpose. Will you seize it?

 
tags: industry insight, creativity, craftsmanship, Isaac Singer, Hephaetus, blacksmith, art, invention, creativity online, creation, progress
categories: Industry Insight
Sunday 11.15.20
Posted by Elf
 

Amazon Is Opening Its Own Grocery Stores All Over the Country

Change is on its way, as Amazon plans to open its first grocery store in Los Angeles this year, with two more for early next year.

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Amazon is also considering launching grocery stores in several cities such as San Francisco, Seattle, Chicago, Washington, D.C., and Philadelphia, according to reporting by the Wall Street Journal. The new grocery stores would be separate from Amazon’s Whole Foods Market chain. Amazon’s acquisition of Whole Foods back in August 2017, its largest purchase to date, revealed the Internet giant’s ambition to expand into the lucrative grocery retail market.

161206-amazon-go-job-killer-feature.jpg

The new purchase would enable Amazon to further establish its growing physical grocery store chain -something which the company has expressed interest in previously. Amazon is expected to open new Amazon 4-star stores and 3,000 new Amazon Go stores by 2021, its chain of grocery store without cashiers or checkout lanes.

The company is trying different grocery store models and options, while possibly buying new regional grocery chains. Amazon has signed leases in several locations but this does not guarantee immediate store openings. The Internet giant has expanded from its humble origins selling books online to music, products, equipment and more. Amazon has grown into a cloud computing service provider via Amazon Web Services (AWS), launching its own original Amazon TV series and movies via Amazon Studios, self-publishing options via Amazon Kindle, logistics services, digital advertising and even efforts in finance and health care. In September 2018, digital marketing research firm eMarketer reported that Amazon’s advertising platform is now the third largest behind Facebook and Google.

Whole-Foods-Market.jpg

While a brand name for the new stores has yet to be announced, the stores are not meant to compete with Whole Food stores, which are considered more upscale and does not sell any products with artificial flavors, preservatives and the like. The new grocery stores will offer a variety of products at lower prices, similar to conventional grocery stores.

Amazon continues to experiment with food delivery services such as Prime Now and different sizes of grocery stores. Prime Now is a two-hour delivery option that Prime members can receive in over 60 cities. There is also online grocery pickup from Whole Foods stores in just 30 minutes for nearly 30 cities. Amazon intends to keep growing its Whole Food store footprint and also to encourage Prime members to shop at Whole Foods more.

Image via WSJ utilizing Cowen data

Image via WSJ utilizing Cowen data

The company aims to learn more about grocery shoppers and better serve them by offering better delivery and pickup options. Several supermarket giants such as Walmart and Kroger have already started to emulate this with their own options.

When the Wall Street Journal reported news about Amazon’s plans yesterday, share prices of supermarket companies immediately plunged. Kroger lost 4.5% of its value while Walmart went down 1.1%. Amazon shares on the other hand, rose 2% on the day.

Amazon is expected to choose a variety of options for grocery stores, ranging from new developments to stores currently occupied with leases that are ending soon. The stores are expected to be roughly 35,000 square feet in size, almost half the size of a standard 60,000-square-foot supermarket.

In addition, Amazon aims to sell different products at its stores beyond groceries such as health and beauty. This differs from traditional grocery store leases in shopping areas that tend to restrict the sale of some health and beauty products.

While Amazon’s final strategy remains unknown, many analysts estimate that the company will offer physical store sales in combination with e-commerce options for customers, with convenience for customers a top priority. Founder and CEO Jeff Bezos has always emphasized customer service as the company’s top priority.

Amazon’s plans for expansion in New York City with a new East Coast headquarters in Queens, has come under fire from some vocal members of the community. The company was courted by New York governor Andrew Cuomo who offered large incentives to the company. In mid February, Amazon withdrew its proposal to build a center in New York, while continuing to set up its center in Arlington, Virginia. According to the New York Times, Cuomo is continuing discussions with the e-commerce giant in attempts to win the company back, aiming to remove obstacles and showing unison with a signed letter from over 70 unions. A full page ad even appeared in the publication, with an open letter to Jeff Bezos, asking for a second chance to bring the jobs and HQ back to New York City.


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tags: Amazon, grocery store, Whole Foods, Walmart, Kroger, innovation, vertical integration, disruption, industry insight
categories: Industry Insight
Saturday 03.02.19
Posted by Elf
 

Spotify Buys Gimlet Media and Anchor - Two of the Largest Acquisitions in Podcast History

The Swedish audio streaming company cemented its presence in the podcasting world by its purchase of Gimlet Media, the content creators for Startup and ReplyAll podcasts, and Anchor, the production and distribution platform

Image via Spotify

Image via Spotify

Spotify’s acquisitions came as a surprise to the industry as Spotify has never bought a company focused on creating content such as Gimlet Media nor has it previously expressed interest in the podcast space. Podcasting has however been attracting increasing investment from advertisers, raking in over $314 million in 2017 in the U.S. alone. Spotify’s purchase of Gimlet Media at $230 million, the content creators behind the Startup and ReplyAll podcasts, is the largest acquisition in podcast history. Spotify’s second purchase of Anchor, the production and distribution platform for podcast creators, was for an undisclosed sum. Spotify’s announcement signals the company’s keen interest in the podcast market. Spotify has also shared that the company intends to invest up to $500 million this year alone in the podcasting space.

Spotify has dominated the audio streaming industry, reporting 96 million subscribers and posting its first profit this past quarter of $107 million (€94 million), less than one year after the Stockholm-based company launched its IPO on the NYSE on April 3, 2018.

“For the first time in company history, operating income, net income, and free cash flow were all positive.”
— Spotify, Q4 Shareholder Letter

Spotify has been the industry giant for a long time in terms of subscriber loyalty, although Apple Music has been playing catch up. Apple announced that it had reached 56 million subscribers this past November. Apple has been closing the gap, though Spotify still dominates the market comfortably with a 40 million lead. Nonetheless, the Cupertino giant has three advantages - offering bundling options, thus achieving a conversion rate of 0.64% (as compared to Spotify’s stable 0.24%), paying artists a higher percentage than Spotify and not needing streaming to be profitable.

The two companies have also vastly different approaches to playlists - Spotify’s playlists are driven by algorithms, while Apple’s have what CEO Tim Cook calls “the human touch.” Nonetheless, consumers, by a large majority, have preferred Spotify’s playlists.

Cook insists that playlists generated by computers are lacking. In an interview with Fast Company, Cook explained that a streaming music platform has the potential to offer a sublime music experience.

“Music inspires, it motivates. It’s also the thing at night that helps quiet me.  I think it’s better than any medicine.”
— Tim Cook, Apple CEO

In an interview last year with Fast Company, Spotify’s CEO Daniel Ek said that he was confident that the company’s computer-generated playlists, which he calls the company’s “key differentiator” will “defy all the skeptics” in the long run.

“Music is everything we do all day, all night, and that clarity is the difference between the average and the really, really good.”
— Daniel Ek, Spotify CEO

Arguably, Spotify has already won with this strategy, given the popularity of the platform’s playlists. Even its most vocal critics such as Taylor Swift and Jay-Z have returned to Spotify and uploaded their music once again to its platform.

Why Podcasts?

The word “podcast” is literally derived from the iPod. Apple redesigned the Podcasts app and offered more in-depth analytics in 2017. Spotify did not actually consider podcasts a good investment initially given the “poor user experience” as Chief R&D Officer Gustav Söderström said in an interview with TechCrunch.

“The user experience was really poor. There was no 15-second skip. In spite of that, we saw a lot of users listening to podcasts. It was kind of unexpected, and we didn’t really understand why. It turned out people really wanted to have podcasts in Spotify with their music. If you look at radio, it’s not that surprising.”
— Gustav Söderström, Spotify's Chief R&D Officer

However, podcasting’s striking similarity to radio makes it compelling for the company. Spotify CEO Daniel Ek recognized this.

“...people still spend over two hours a day listening to radio—and we want to bring that radio listening to Spotify, where we can deepen engagement and create value in new ways.”
— Daniel Ek, Spotify CEO

Spotify aims to create an avenue where consumers can discover new audio and play it. This includes popular podcasts such as the ones created by Gimlet Media and also producing its own original content using Anchor. Thus Spotify would offer a mix of radio and Netflix-like original content. Now if Spotify can successfully achieve this, the company would become the de facto platform for consumers to discover and produce original audio, thereby attracting and retaining both listeners and creators.

Gimlet Media is a podcast studio with $28.5 million funding, based in New York that is known for its original podcasts such as “Homecoming,” which has now been adapted from a podcast to video for Amazon Prime and for “Reply All” about Internet culture.. Anchor is a podcasting startup that helps anyone record their audio on the go and distribute that audio right from an app on their smartphone or tablet. Anchor raised $15 million in funding, of which $10 million came from GV, Alphabet’s investment branch. After a redesign of their platform last year, Anchor has enabled podcasters to distribute their recordings straight to Spotify, along with other streaming services. Apparently, Anchor has enabled the production of 15 billion hours of content listening on Spotify just in the fourth quarter of 2018 alone.

Spotify’s two large acquisitions - original podcasts and assisting podcasters in creating and launching their podcasts, signal the company’s strong interest in the podcasting world. The ‘Netflix’ model of creating and locking down original content would help in the company’s bottom line instead of having to negotiate royalties and deals with labels. Gimlet Media brings Spotify talent, technology and proven popular podcast models for original content, while Anchor provides hosting and monetization methods. Spotify’s CEO Daniel Elk shared his company’s goals in a press release.

“These acquisitions will meaningfully accelerate our path to becoming the world’s leading audio platform, give users around the world access to the best podcast content, and improve the quality of our listening experience, as well as enhance the Spotify brand.”
— Daniel Ek, Spotify CEO

In 2018, an Edison Research Infinite Dial report on podcast listening trends shared that 26 percent of people in the U.S. listen to at least one podcast each month and that listeners tune into seven podcasts a week on average. Spotify’s CEO Daniel Ek shared in the public announcement of the two acquisitions, that his company would apply “better discovery, data, and monetization to creators.”

“These companies are best-in-class and together we will offer differentiated and original content. Gimlet and Anchor will position us to become the leading platform for podcast creators around the world and the leading producer of podcasts.”
— Daniel Ek, Spotify CEO


Spotify is clear on its ambitions to be the world’s largest and most popular audio streaming company for both music and non-music audiences. The company intends to spend up to $500 million for similar acquisitions in 2019, as shared in its Q4 shareholder letter.

“Based on radio industry data, we believe it is a safe assumption that, over time, more than 20 percent of all Spotify listening will be non-music content.”
— Daniel Ek, Spotify CEO

Podcasting Attracts Strong Investments

Podcasting has been attracting strong investments in recent years. Betaworks Ventures, an early venture capital firm, invested in both Gimlet Media in 2014 and Anchor in 2015. Betaworks Ventures partner Matt Hartman explained in a blog post why he considered podcasting a lucrative investment.

“We saw early data around podcasts having a bit of a resurgence before Serial  (a popular podcast) launched. That data, combined with the increasing battery life of iPhones and an increasing amount of connected cars on the road, led us to think there was an opportunity for internet-powered audio. This, combined with the quick growth of smart speakers, solidified our conviction that people would consume more and more audio content.”
— Matt Hartman, BetaWorks Ventures Partner

In 2015, Scripps media company bought Midroll Media, the digital media company in Los Angeles known for its original podcasting and ad network. Midroll also acquired Stitcher, the popular audio hosting platform. Last year in the fall, iHeartMedia purchased Stuff Media, a podcast content company. Apple reportedly was in talks to purchase iHeartMedia in December.

These acquisitions reveal that the demand for podcasting is only growing. With Spotify’s two acquisitions, the company now has a complete podcasting solution from discovery to creation, distribution and monetization. This bold move demonstrates the company’s ambition to become the world’s most popular audio platform from music to on-demand audio for listeners, podcasters and advertisers.

In its Q4 shareholder letter, Spotify revealed that it was ready to spend up to $500 million for similar podcasting M&A activity in 2019.

“Growing podcast listening on Spotify is an important strategy for driving top of funnel growth, increased user engagement, lower churn, faster revenue growth, and higher margins.

We intend to lean into this strategy in 2019, both to acquire exclusive content and to increase investment in the production of content in-house. The more successful we are, the more we’ll lean into the strategy to accelerate our growth, in which case we would update guidance accordingly.”
— Spotify, Q4 Shareholder Letter

Spotify, without a doubt, has some serious podcasting ambitions.

tags: Spotify, Gimlet Media, Anchor, Apple Music, radio, Netflix, growth, content, podcasters, music, non-music, listeners, mainstream, industry insight, audio
categories: Industry Insight
Friday 02.08.19
Posted by Elf
 
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