Innovation, Table Stakes and Dev Ops
Tech and investment are deeply intertwined. Whether it’s Venture Capital or just a business “reinvesting” in itself, the idea that investing in tech is investing in innovation. New opportunities are driven by new technologies, and opportunities should equate to profits.
But not all tech projects are the same. I basically break the idea of developing tech into three areas.
- Basic IT/DevOps
- Table Stakes
The problem as I see it is that we (sometimes intentionally) treat the basic work of IT as new and innovative, and we also (usually unintentionally) forget that without the basics, innovation is going to fail.
To help understand why these things are different, and why they’re all important, let me try to explain what I mean by each of these areas and what makes them unique.
Information Technology/Dev Ops
The IT team is often treated like plumbers. As long as we don’t see them we know everything is okay, but if we do see them it’s because there’s a mess. Keeping your basic infrastructure running and up to date is complicated requiring constant monitoring and adjustment and making sure your work is unnoticed – we don’t want to see a big “503: Service Unavailable” because someone is adding a security patch, we just want to use the app.
Because a good IT team is an invisible team, it’s not considered sexy. It’s dull, boring, grunt work, and you know… grunts probably don’t need the same kind of incentives as the real innovators… in fact, you can probably not only underpay these folks, you can understaff and pretty much ignore what they are doing. Well, you do that until something backs up and there’s a mess to clean up, then everyone asks, “how did this happen?”
One way companies get around the underfunded, invisible team is to create “modernization initiatives.” This is where we dump a bunch of money into a team that’s going to turn it all around and make the company more competitive by adopting technologies that are common in the new, innovative companies. Of course, the modernization initiatives usually fail because we treat it like a one-time thing. We bring people in from outside the IT team to set standards and to tell the IT team what they’ve been doing wrong and then wonder why there’s all this friction between the modernization team and the IT team.
My personal opinion is that modernization is an ongoing process – you have to make changes constantly, you have to make reviewing current systems and processes. We have to look at how people use the tech or even look at the people who don’t use the tech to decide if the current tech is working and then we need to change our tech steadily and constantly.
For example, I live in a house built in 1910. It has a modern 200 amp electrical panel, romex wiring, a gas fireplace, an on-demand hot water heater, low-flush toilets, pex tubing for the plumbing… the list goes on for the upgrades we, and previous owners have made. These were almost all incremental changes -- we didn’t one day rip out all the walls, replace the electrical and plumbing while deciding on a new floorplan for the bedroom. Every improvement took into account the house as it stood at the time, and, for the most part, the improvements were done quietly and as unobtrusively as possible.
IT shouldn’t be run like a brand new project, because, back to my house metaphor, if you gut the house, it’s not the same house anymore. You lose what makes it special, and often, you lose the value. But if you improve it incrementally then there isn’t much to do when you want to sell it, or, better yet, keep living in it.
Table Stakes in Tech
When I talk about the challenge of money in tech, I think the phrase “Table Stakes” is telling – it's a gambling term that refers to the things you need just to join the game. Of course, there are different games with different table stakes, but if you try to play the game and you don’t have enough money for the ante, you’ll just get removed, sometimes with a laugh, more often with a shove.
In tech, table stakes are things we just expect a company to have. If you were choosing a bank, and they didn’t have a mobile app to let you check your balance, you might think they don’t have their crap together in general. A social media platform is going to let you manage your profile, you’d be surprised if you couldn’t add a photo or set your display name.
Some of these table stakes are the IT things I mentioned before – you don’t expect the application to be down for a week while the tech team updates it. You, honestly, don’t expect it to be down anytime – 24/7, four nines of uptime is just… table stakes. Some of these things are unique to your industry and understanding what other people are doing in your industry is a basic form of business table stakes you need before you get to tech table stakes.
It’s amazing to me how many individuals and companies ignore the basics because they have an innovative idea. “We’ll cross that bridge when we come to it,” really is saying “Don’t know. Don’t care.” Even if I showed up to a high stakes poker game with the Koh-I-Noor diamond, if I don’t have any €1,000 chips, I’m not going to be able to join the game. And I don’t have a way of selling the diamond, I can’t even get any chips. There is no bridge to cross.
Without the basics covered, the innovative idea isn’t worth anything other than being an idea. It’s not as exciting to make sure you have an online support ticketing system or a basic identity service, but if you don’t have the basics, you will lose not only customers but even the opportunity to get customers in the first place evaporates.
Something truly innovative isn’t something you can just pay someone to do. Innovation requires a lot of factors – the right people for sure, but it’s not just tech, it’s understanding gaps in the market where something different is needed, something your team sees that no one else sees. Innovation doesn’t have to be Henry Ford’s assembly line or Steve Jobs’ iPhone, but if you take those examples as the bar you need to reach, it’s a pretty high bar.
Innovation also doesn’t happen in a vacuum. Galileo read Ibn al-Haytham. Einstein read Maxwell. Henry Ford was inspired by meat packing plants. Steve Jobs pretty much got the idea for the Mac from Xerox. The basic tech was done before these innovations. Doing research was part of the table stakes.
Facebook wasn’t innovative because it invented social media -- Friendster came before Myspace which came before Facebook. Facebook was innovative because it could scale and make money. That “scale” thing is a bridge a lot of companies say they’ll cross when they get to it but, honestly, if you’re experiencing exponential growth and your IT team doesn’t know how to make changes to your infrastructure, your growth will stall and drop like a jet without fuel. Or maybe like a jet struck by a meteor… either way it’s going to crash.
So, while funding innovation seems like the best way to make money (“He’s like the next Steve Jobs!”), if you don’t have your basic IT covered, if you don’t understand the basic table stakes you need to show up at the game, innovation is pretty much what I call product theater – it has all the trappings of a business, but it will fall flat as soon as you cut the wires holding it up.