5by5 | The Critical Path #13: The Innovation Anomalies

The Innovation Anomalies

Episode #13 • November 16, 2011 at 11:00am

Dan and Horace talk about innovations in emerging economies related to mobile service and how they might foreshadow changes in the developed world. We also discuss why some industries seem to be exempt from disruptive innovation and suggest that there are boundaries societies set to how value can be re-defined.

This show pushes beyond the boundaries of company and industry analysis and touches on the limits or “sound barrier” of innovation itself.

  • Boyd Waters

    Loved your podcast, as always.

    FWIW I have a student pilot license, owned a little airplane for a while about 10 years ago. At that time I also held an informal (non-government) certificate for CPR and the use of an automatic defibrillator device.

    We are attempting to disrupt air travel, as well as medical care. I suspect that the USA has a looser government regulatory environment than Europe or Scandinavia. But our torts system (suing for liability) has inflated the cost of entry into air travel, or medical-device manufacture. My Cessna 172 used to cost about $16,000 new in 1965. A similar aircraft today, the base-model 172, is about $300,000.

    The wilderness of the American West, most of Canada – Alaska, and Australia — these areas need cheap air travel. Sport-pilot certification has been pushed through, but the tiny aircraft are prohibitively expensive.

  • Shawn Petriw

    Link to the podcast:

  • Hi Horace,

    I found this episode as informative as its predecessors in this series. Thanks for sharing your insights with the rest of us.
    I’ve been thinking more about how the $1T cellular industry may be disrupted. Have you been following the birth of Republic Wireless? They are launching a new WiFi-centric mobile service which leverages their corporate parent’s,, expertise in delivering hosted IP PBX service to the SMB market. They’re going to provide a similar service with an LG handset over WiFi that has the ability to fallback to Sprint’s network when WiFi is not available. The service is $19/month, with an upfront cost of $199 for the phone (no contract). They are advertising it as unlimited voice/data/text, which is certainly the case over WiFi. They will use a Cellular Usage Index (CUI) to determine how much cellular usage is permissible based on the WiFi usage of the customer.
    It certainly has the potential to be a major disruption to the MNO industry. I thought it was interesting that you also mentioned the unlicensed spectrum as one area in which the mobile market might be disrupted.


    • SF

      I’d be interested in hearing Horace’s thoughts on Republic Wireless as well! Seems like a creative way to enter the market at the low-end for data service. Of course, they are still dependent on the traditional carrier (Sprint) so that’s a rather tenuous position… a little bit like Netflix I would say, and their dependence on content deals.

  • As someone who lives in Finland (hey neighbor!) who has been writing for a website trafficked primarily by Americans, let me tell you that people don’t care about the business models happening in other parts of the world. I’ve tried to tell people about how data is priced in Finland (by speed, not by bucket), how text messages are priced in South Africa (for every X amount of texts your send you get Y free), how India is leading the multiple SIM card revolution … no one cares.

    Look up articles about Apple’s patent for virtual SIM cards and the push back they got from operators. That stupid little piece of plastic is what American operators use to own you by the balls. Then there’s sheer ignorance. People in Brazil, China, India, they know an iPhone 4 starts at $600 whereas an American thinks it’s $200.

    What has to happen in America and Europe to get business models to change? Besides government intervention, I just can’t see anything else that’ll get the ball rolling.

    Perhaps wholesale network suppliers like LightSquared? Or hopefully the FCC will give Dish Network permission to build a network?

    Curious to have a discussion about this. We never did have that coffee, and that’s my fault for not following up.

  • Pauldcamp1


    Great discussion on industries that resist disruption. Do you think that this resistive effect is related to the risks to the user that are inherent in the industry? For example, in healthcare the consequence of poor practice may be severe on the user. In the transport industries, as you alluded, the amount of kinetic energy may drive high risk to the consumer if the means are not extremely reliable. I see these as very different from telecomm, where risk to the consumer is much less in terms of its most severe consequence.


    • It’s a matter of risk to users but risk management and mitigation is what business does best. Automobiles are very dangerous and motorcycles most dangerous but we tolerate them. I sometimes wonder whether cars would even be permitted to be used today if they had only just been invented.