PIVOT NEWSROOM

Pivot Factory Podcast - Episode 6 - Pascal Finette

Mar 28, 2019 10:36:06 AM / by Pivot Factory

For all the talk about Amazon’s retail domination, its recent foray into the supermarket industry and the billions it spends on original content exclusively for Prime members, it's the Seattle-based company’s cloud-computing business that’s become its biggest revenue stream. In 2018, Amazon Web Services (AWS) generated $25.7 billion in revenue—an astonishing sum that was even greater than the revenue brought in by McDonald’s ($21 billion) as a whole, according to Quartz.

That comparison is especially relevant given the nature of business in 2019, with more and more companies operating digitally or using technology to augment more traditional services.

“Every business is by its nature digital,” Pascal Finette, a global thought leader on innovation, founder of various startups and nonprofits and chair of entrepreneurship at Singularity University, tells Pivot Factory CEO and Founder Michael Leadbetter in the latest episode of Pivot Factory Podcast. “Meaning that every business also needs to have a digital strategy. They need to figure out what does it actually mean for me to be digital, even if I’m not a digitally native business.”

In this episode, Finette talks in depth about digitization, the concept of decentralized innovation and how blockchain and cryptocurrencies are removing the “trust” factor that most financial transactions are built upon. To learn more about what Finette had to say, listen to the podcast in full on our site or your preferred podcast app.

DIGITIZATION

Finette says it was only about five years ago that people still distinguished between digital businesses—Facebook and Google, for example—and analogue business. The latter consists of everything from mom and pop shops, retail, food and beverage establishments, and companies pitching a service.

“The world around you moves on an exponential curve, so you better get on with the times and adopt and adapt,” he says.

He sees no such differentiation anymore.

In fact, digitization has become so entrenched that some businesses may not even realize they’re operating on a digital platform.

“In the olden days we thought of digital business [as] the ones that are digitally native, which have been born on the internet,” Finette says. “So anything from music streaming services to the replacement of printed news with online news, etc.”

Even for the firms that don’t sell products or a service online, it’s very much possible that the backend of their business is already running on a digital platform. That could mean anything from cloud infrastructure or software as a service, he says.

“That means you as a business better understand what the rules of this game is and how do you best implement this in your strategy,” Finette advises.

Finette explains that it’s important for all business to acknowledge the effect digitization and technology has on their operations because of the increased pace of innovation across all industries.

“The world around you moves on an exponential curve, so you better get on with the times and adopt and adapt,” he says.

decentralized innovation

In essence, decentralized innovation is the practice of leveraging outside sources — crowdsourcing, for example — to solve a specific problem within an organization.

The idea of innovation occurring because of the work of “the lone genius in the lab”—such as Edison—does not align with today’s way of problem solving.

This concept, and Finette’s view of technological advancements, may reveal a disconnect with how general society imagines how innovation occurs. Consider Finette’s example of Thomas Edison. The inventor, he says, famously experimented with the light bulb and conducted a number of experiments until he found the right filament for a bulb.

The idea of innovation occurring because of the work of “the lone genius in the lab”—such as Edison—does not align with today’s way of problem solving, Finette notes.

“That, I think, is not true anymore,” he adds, “simply because the world is A) too complex for this and B) moving too fast. So the idea is then, if you look at innovation outcomes, they kind of feel like... a typical bell curve, so there’s a few ideas which are stupid and there’s a whole bunch of ideas which are okay and then there’s a few ideas which are really brilliant. And of course, as an organization your aim is to find those brilliant ideas.”

While companies hire talented people to fill vital positions, the internal workforce may not have the skill set to solve a particular problem. Most companies will turn to outside experts for advice, which is one way of coming to a solution. Another possibility is by taking advantage of the talent pool outside your own ecosystem.

Inevitably, there will be companies that are averse to such methods because of concerns over intellectual property. In other cases, it might be what ExO Co-Founder and best-selling author Salim Ismail calls the “immune system response”—meaning the natural impulse to diverge from the status quo.

Finette has a solution.

“The simple answer is you can build open innovation systems and decentralized innovation systems, which take that into account and allow you to keep full control over your IP, [and] to keep NDAs in tact,” he says.

blockchain

This is portion of the episode in which Finette takes most of us to school. That being said, it’s probably best you listen to his explanation in its entirety to really digest the meaning of blockchain and the sometimes convoluted world of cryptocurrencies.

But there a few nuggets worth fleshing out.

First, let’s discuss “trust.” As Finette explains, the foundation of any transaction is the belief that the parties involved are acting in good faith. In some parts of the world, populations may be skeptical of a government or private person’s intentions. This is where blockchain can help. In effect, blockchains create a record of transactions that is accessible to anyone in that network.

“If you don’t trust your government... if you put this on this public blockchain, you can solve these issues” of trust, says Finette.

Interestingly, blockchain, while still uncommon in most aspects of society, is being used by humanitarian groups to assist people in refugee camps. One example of this is inside a Jordan refugee camp where the United Nations’ World Food Programme is using blockchain to funnel digital currency to Syrians fleeing civil war and unrest in their home country.

According to Technology Review:

“Started in early 2017, Building Blocks, as the program is known, helps the WFP distribute cash-for-food aid to over 100,000 Syrian refugees in Jordan. By the end of this year, the program will cover all 500,000 refugees in the country. If the project succeeds, it could eventually speed the adoption of blockchain technologies at sister UN agencies and beyond.”

TAKEAWAY

Leadbetter’s conversation with Finette covers a lot of bases in a short time. Clearly, Finette believes digitization is everywhere, and will only become more embedded within businesses as the years go on. Also, the idea that digital currency can eliminate the “trust” factor and make transactions more transparent could have serious implications for many people in nations with a history of corruption and government malfeasance.

 


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The Pivot Factory Podcast is a Morey Creative Studios production.

The Pivot Factory Podcast is hosted by Michael Leadbetter, and engineered and produced by Michael Conforti, Rashed Mian and Christopher Twarowski. Jed Morey is the executive producer.