best buy micro-innovation and fidel castro

One manager of a Best Buy store, who resembles Fidel Castro, leveraged this “asset” turning his store into the best performer. How? Revolutionary mode (called his store “La Revolucion,” posted “Declaracion de Revolucion” in the break room, made store supervisors wear army fatigues,…) and encouragement to whistle when employees do good things.

In Cuba, considered “Internet enemy” by Freedom House, Internet has only 14% penetration, served much like rationned food.

In 2010, Castro admitted he admired Internet and WikiLeaks’ influence on American government and agreed to have a Cuba-Jamaica-Venezuela fiber-optic line, increasing its connectivity 3000 times, but not for ordinary citizens.

Some historic fails of science and technology

Historically, science and technology have gone along many routes which turned out to be dead-ends.

Science has many discredited theories and obsolete paradigms such as alchemy, phlogiston, universal ether, and more. They failed the reality test and were cast aside, occasionally turning up in fantasy stories and crackpot websites. Some scientists use science to explain/interpret social and cultural phenomena. Sam Harris, for example, says (completely ignoring the spiritual, cultural and social aspects) the religion “is indeed failed science” and expresses hope that information, education and science will rectify this situation. In the modern world even renowned scientists are prone to making claims and predictions, which cannot be substantiated. An interesting case in point is Paul Ehrlich, a world-renowned entomologist whose failed predictions about environment (for example “There is no evidence that global warming is real“) are still resoundingly discrediting relevant scientific research and available empirical data. There are even cases (controversy surrounding discovery of element 118) when scientists deliberately fabricate fake data to support their theories and claims.

Technology has a bit more wiggle room but is still full of false/failed predictions and intentions. Some technologies were perfectly viable from an engineering standpoint, but either couldn’t compete economically or never really had a market. The canonical example is airships. With abandoned technologies there’s always the suspicion that if things had turned out differently we might be driving atomic cars or be regular tourists on the spacecraft Cycler commuting between Mars and the Earth or some other high-end, futuristic sci-fi-inspired gig. Douglas Self‘s Museum of Retro Technology contains information on dozens of devices, which existed, but never became part of everyday life.

Failed technologies are different from completely bogus technology. We’ll never get power from a Keely Motor and we will most probably be unable to make mainstream steam-powered airplanes because they either had high costs related to manufacturing or unprepared markets or could simply not compete with more conventional designs.

But all these false roads and blank directions were not taken in vain. If you take a look at major inventions and discoveries in science and technology you will see that most, if not all, happened by merry happenstance (radioactivity theory by Marie Curie), unanticipated development (Arpanet and Internet) or in the course of pursuing a plainly different objective (serendipitous case of discovering penicillin by Alexander Fleming).

Prodigy Communications rises high and falls low

Consider the case of Prodigy Communications Corporation. Prodigy was founded in 1984 as a joint venture among IBM, Sears, and CBS to offer “videotex” services, such as news, advertisements, shopping, and communication, from a PC. With the initial low penetration rates of PCs and modems in homes, however, it was not until 1989 that Prodigy services were first marketed. By that time many of the services we know today were already available, including email and, in 1994, access to the World Wide Web by pioneering sales of “dial-up” connections to the net. Indeed, when Prodigy first went online, it was praised as the network of the future.

At its height in 1994, Prodigy had 2 million subscribers and innovative services. Yet this first mover that could fairly be credited with creating primary demand for online services fell to a distant third behind AOL and CompuServe just two years later. Why did the front-running Prodigy fall from grace? The company made a series of operational and organizational mistakes from which they could not recover. For example, when customer usage of email accelerated in 1993 the company imposed a 25 cents charge for each email above the 30-email limit each month. Customer reaction was swift – complaints surfaced on Prodigy bulletin boards and 18,000 customers joined the “Cooperative Defense Committee” to protest the user fees. Prodigy responded by abruptly closing some customer accounts without explanation or prior notification. The company did not do much better in managing customer expectations of online chat rooms, banning discussions of any sex-related topic, including AIDS.

With Windows becoming the standard operating system for PCs, Prodigy focused on developing their own non-Windows compatible proprietary interface. Prodigy also suffered from the bureaucratic and political headaches of operating under two large, established corporate parents (CBS had dropped out in 1986), who were often in disagreement on strategy. This became particularly evident after AOL began their “free trial” marketing campaign that saw them send millions of diskettes to potential customers. Prodigy’s response was hampered by the continuing efforts of IBM and Sears to extricate themselves from the business, one in which they had invested some $1.2 billion by the time they sold the company to a group of investors in 1996. Internally, conflict between senior executives with large-company perspectives and younger employees driven by technology and entrepreneurship created havoc.

In the end a company that was first to see, and capitalize on, the huge opportunity that became the Internet changed hands and wound up being part of the AT&T empire. As of now, there is still a small group of former Prodigy employees in AT&T.

Source: Journal of Business Strategy, July/August, 2001.