Innovation Thwarted (by stupid governments and nasty neighbors)

Last week, a friend sent me a link to an Innovate UK grant scheme soliciting applications for innovative ideas to assist British businesses during COVID-19. I’m always looking for a pretext to brainstorm healthy business disruption, so I welcomed the time pressure (deadline: FRIDAY, April 17) and the competitive nature of the grant scheme, “Business-led innovation in response to global disruption (de minimis).”

I spent a few days mulling and researching potential business ideas, based on my actual experience of living in the rural countryside during COVID-19, a totally unwonted exercise (since I spend most of my life in cities, whether my body is there or not). I began by identifying the small frictions in my daily routine caused by COVID-19. First among them: try as I might, I could never manage to do a perfectly complete grocery shop sufficient to cover all of our household’s needs for the week, despite military-style meal-planning and jotting down items the moment they ran out. Fortunately, two friends come over to play tennis every day and one of them can usually bring over missing bits and bobs — a matchless household convenience which got me thinking, what if we could consolidate errand running by pooling the resources of our immediate neighbors? (To a city dweller, that might sound like a silly idea — because everything is located within three blocks from home — but running an errand in the countryside, let alone queuing to get into Waitrose during COVID-19, takes at least twenty minutes on each occasion. Residents of rural areas are often like me, retired or self-employed. Far from keeping calendars like Tetris, we don’t mind running highly inefficient errands to purchase single units of, say, firelighters or dishwashing liquid, despite the adverse environmental impact, not to mention sheer time wasted, by such behavior. COVID-19, with its restrictions on movement and gathering, shines a klieg light on this extremely inefficient allocation of time and resources — careless habits of MIND more than anything else. (On the other hand, maybe there’s so little to do in the country that we welcome these trivial excursions as a way to spice up the day?)

During lockdown, errand-running for “necessities” probably accounts for 10–15% of traffic and interpersonal interaction, undoubtedly increasing vectors for infection — all without life-or-death justification. Thus, I decided that this was a fruitful starting point for business innovation, specifically, an app. Besides reducing trips outside of the house during COVID-19, an app that could batch-consolidate errand-running for neighbors living in the same small geographical catchment could reduce the carbon footprint of rural village life in the long run.

I called my friend, a successful app developer and UX expert based in Singapore, to pick his brain and make sure that my idea wasn’t crazy. (He designed the original version of Siri acquired by Apple.) His immediate reaction: before you consider building ANY app, you have to find some way to simulate your desired dynamic with existing technology. How about Whatsapp or Nextdoor?

I don’t have much of a local Rolodex, so Whatsapp, which requires you to know someone before messaging them, didn’t make sense. Instead, I downloaded Nextdoor hoping to plug into a network of like-minded neighbors. (Nextdoor is a social media app resembling Facebook except shrunk down and stripped back to serve geographically circumscribed communities, like a village or small town. Not surprisingly, downloads of Nextdoor have exploded during COVID-19.) WOW, what a shocking disappointment — not because the app sucks. (No no no. The app has gigantic potential to do good.) But because of all the righteous tut-tutting that goes on there! Here are a few posts which give you an idea of what Facebook would look like if it was remade in the image of embittered sixty-year old shut-ins.

Look at what happened to this poor man in a neighboring village who announced on Nextdoor that he had contracted COVID-19. Instead of solicitude, he got a a tongue-lashing:

It should come as no surprise that I scotched my plan to conduct a micro-pilot with the neighbors. The fact that Nextdoor has no API for third party developers cemented my decision. (To create the functionality I wanted as a freestanding app would require push notifications, in-app payments and peer-to-peer messaging, an impossible set of specs to fulfill for £50k or less!)

Obviously, neighborliness and mutual succor were not a good starting point — its own kind of awful epiphany.

So I turned my attention to the B2B space. What were all the farmers and local producers of foodstuffs like preserves, bacon, cheese, honey, butter, etc., doing with their inventory during COVID-19? How were they surviving even, when all their usual customers — restaurants, farm shops and butchers — were either closed or working under extenuating conditions? Surely, farmers needed to bypass wholesale during times like these and sell directly to the public. It’s better than letting their inventory rot. But farmers are neither in the business of merchanting nor delivering goods to individual consumers. (By the same token, was I, a typical consumer, prepared to buy one wheel of cheese or one slab of bacon from one farmer at a time?) Only a business model consolidating demand and streamlining delivery could justify the economics of direct-to-consumer operations. Thus, how could we get farmers in the same vicinity to consolidate their deliveries so that a single truck could deliver to one village? By coordinating the marketing of their products to the public of course! And that’s how I thought of building a self-service ecommerce platform that could allow several farmers (from the same area) to band together under a single shingle to sell their products to the public: a virtual farm shop platform in other words. That way, I could buy the wheel of cheese and slab of bacon at the same time. And farmers and local food producers could achieve decent economies of scale. Such a platform would benefit rural agricultural and food producers long after COVID-19, giving them a permanent and direct share of retail margins to supplement (or, in a crisis, replace) their usual wholesale income.

Finally, I was ready to write my grant application. But when I read this section of the application, my heart sank:

“You should include in your answer a description of …. the nature of your current business explaining how this project will add value to it….”

There were other questions that made it clear that the government expected the applicants to be businesses directly impacted by COVID-19 ONLY, in my case, farmers and makers of prepared foodstuffs, rather than start-up entrepreneurs or tech professionals.

Until that moment, I had focused all my attention on the requirements of the business innovation proposal, rather than eligibility criteria, assuming that the latter would be reasonably broad to elicit a large volume of high quality applications. But NO. Moreover, “Sole traders [were] not eligible to apply for this competition,” and I’m a sole trader.

HOW STUPID to limit the applicant pool to businesses directly affected by the virus — not that it’s impossible for farmers, restauranteurs, retailers or food processers to come up with revolutionary disruption, just incredibly unlikely. Most of the time, business owners, especially in rural areas, are just too busy dealing with the day-to-day of their operations to experience Eureka-style epiphanies, the sort which spark start-up disruption.

The next reason this is a silly and unrealistic startup competition is because any genuinely disruptive business built during a pandemic MUST, by definition, depend on ONLINE technology. COVID-19 necessitates severe restrictions on physical movement and gathering. If businesses cannot make stuff (because there are no employees coming to work) or serve customers (because non-essential interpersonal interaction is verboten), those functions MUST be fulfilled, extended or replaced by technology. I’m not much good at tinkering with real world widgets but, try as I might, I could not imagine any business innovation that could help affected industries which did NOT require major software development. CAN YOU? Let’s take a relatively unambitious innovation: Say I was a pub owner and wanted to convert my operation into a take-out or delivery service during COVID-19, how could I possibly propose a scaleable, nationwide solution without creating some sort of online platform? Similarly, let’s say I owned a courier company and wanted to propose consolidated drop-off/delivery points for villages in rural England (a sort of click-and-collect for the countryside), in order to streamline delivery routes to meet increased order volume. That also entails major software development costing far more than £50k. (Email me PLEASE at joanne@culturevlog.com! if a big category of low-cost disruption has eluded me. Maybe it’s sitting under my nose but I’m too tech-centric to see it.)

After I scratched beneath the surface, I concluded that this grant scheme was more about GOVERNMENT PR than anything else! Why else conduct an underfunded start-up competition and solicit ideas from the stakeholders least likely to come up with disruptive ideas? In the best of times, small businesses are trying to succeed within the existing legacy frameworks of their industries. Right now, they’re fighting for survival and trying to stave off bankruptcy.

More broadly, this experience highlights some of the reasons why innovation doesn’t happen:

• Because there’s not enough money.
• Because the right people aren’t invited to think about it in the first place.
• Because unconscious psychological lock-in or allegiance to legacy business models is natural.

It takes two to tango, usually, an insider PLUS an outsider. The former should be an industry veteran with years of hands-on, archetypal experience in sales and operations while the latter is someone from the outside looking in. The outsider should be conversant in tech, consumerism and business models.

To put it another way, if you ask fashion people to think about how to disrupt the fashion industry, they can’t. That’s because all they know how to do is make clothes. And though the lion’s share of value creation in today’s economy is NOT making stuff but information, they can’t really wrap their head around that and always go back to the starting point of making clothes.

Most people are not predisposed to thinking about industry in the aggregate and how, most of the time, their own industry is extremely f — — ed up. For that matter, most people do not think of information (or access to it) as the principle component of product value — not yet anyway — even though, at this point, it’s an obvious home truth. (Brands are information; marketplaces are information; apps are information. Ninety percent of all products are fungible commodities. This topic is waaaaay too big to begin addressing here. But it is one of the main reasons that widgetmakers have enormous trouble thinking disruptively.)

Imagine if the grant scheme had been conceived in a way that WOULD have funded some of these obvious disruptions. Imagine how much we could achieve during COVID-19 if incentives, funding and stakeholders could be aligned — properly.

The fact that The Virus is here to stay for two years (see below) telescopes the window of opportunity for vital and permanent disruption. Will governments — or at least the tech industry — be able to seize this crucial, extraordinary moment?