Last week's unveiling of the new HTC Dream, the first handset powered by Google's Android platform, represents more than another innovation by the mighty Google. It also marks an important chapter for HTC, the Taiwanese company that manufactured the first Google phone and has quietly built itself into one of the world's leading manufacturers of mobile phones.
How did HTC come to build the first phone powered by Google software?
Andy Rubin (Google's director of mobile platforms) and Peter Chou, our CEO, actually knew each other for years. The collaboration happened very organically. The first step was to create the Android platform. For a mobile phone, it's not only a software effort, nor is it only a hardware effort. It truly took the collaboration of both Google and HTC to create what you see today. Together we had been working on the Android platform and the first Google phone for almost three years now. We had people collaborating with Google engineers on the Google campus. We also had a big team within HTC working on the Google phone.
How would you describe your company's model for innovation and the innovation team known as Magic Labs?
HTC already had innovation DNA for many, many years. About three years ago, I started Magic Labs inside HTC more to formalize the innovation process. Magic Labs today has about 60 magicians.
You really call them magicians?
We actually do. We have business cards that say software magicians, chemical wizard and so on. I'm the chief marketing officer of HTC, but if you look at my business card it says "Chief Innovation Wizard."
Actually business cards are not that important. What is important is that this is the only group within HTC that does not have product ship date deadlines. They are not chartered to ship the product over the Christmas season, but rather to think beyond Christmas, think beyond tomorrow, and basically think about the future.
Inside Magic Labs there are people from a diversity of different backgrounds. We of course have software magicians, hardware magicians, electrical people, people with mechanical engineering backgrounds, graphic designers, usability experts. One of the magicians used to design jewelry in New York. The whole organization is designed to fail.
What do you mean by designed to fail?
The way to get a great idea is to have many ideas. By definition, most of your ideas will fail. You want to be able to generate ideas very fast, very cheaply and fail very often but at very low cost. Magic Labs is optimized for the efficiency of failure. Among the many ideas, there will be great ideas that bubble up and then we will invest R&D efforts to cultivate the great ideas.
Can you describe an example of this process at work?
Let's dial back to about three years ago. This was a time when all the phones were getting more and more features and phones were getting too complicated. Everybody was talking about simplicity, everybody was talking about usability. What did people do? Well, they rearranged the menu and called that improving usability. That's not simplicity, that's rearranging menu items. People added graphics — that's pretty icons, but not simplicity.
Inside Magic Labs we tried to tackle this problem as well. We also tried rearranging menus, making the screen easier to view, so on and so forth. But it did not work. One day, inside Magic Labs, there was an epiphany — that was a day I still remember — and the key can be described in a single word: baby.
We recognized that we had been going about simplicity in the wrong way. This happened in a brainstorming session. The true mission is not to reduce learning, but to eliminate learning. There needs to be zero learning, not very little learning.
The baby is probably the best expression for zero learning because the baby has not learned anything yet. If she wants to see the monkey on the other side of the block, she simply reaches out and turns the cube. I don't think she would read a user menu. There is something that is innate to living beings that you just simply reach out intuitively and turn the object. In HTC Touch, there is a slide out cube and you literally just turn the cube. That design was actually motivated by the recognition that people don't read user manuals, they just want to interact with objects intuitively.
We have been abusing end users for many, many years by forcing people to push the up, down, left and right buttons. That defined the direction of Touch Flo and, subsequently, HTC Touch. On the HTC Touch, when you are viewing a web page to move it around, you just reach out and move a virtual sheet of paper around, just like what a baby would do.
The organization that does not think about engineering problems or design problems, but really tries to think outside the box. Think about babies, think about zero learning. It's about making it beyond simple, so that it's almost innate. That's one example of how Magic Labs operate. It's not very engineering-centric, but very conceptually centric in creating innovation.
What percentage of ideas turn into innovation and what percentage are killed?
Almost all of them are killed — probably more than 99 percent. Magic Labs is an ideation engine. If you are sitting inside in one of the Magic Labs brainstorming rooms, within an hour, probably 200 ideas will be generated all over the wall. The culture is really good at doing that. Every day there are many brainstorming sessions taking place, many prototypes being built and most of them are to demonstrate, prove or disapprove certain concepts. You and I might think this is a great idea, but the moment you touch the prototype and see how it works, you might realize that, hey, it does not feel like the way we envisioned. That's a great achievement, because you just failed very quickly and very cheaply.
What's the lifecycle of these ideas? Days? Weeks?
Among the 200 ideas written on the wall, by the time the meeting is over, most of them are just put away. Their life cycle is extremely short, measured in seconds. When you turn off the lights, they're gone. But a few of them actually will be promising so people will use them as seeds for other brainstorming sessions. There might be some sketches over a couple of days. The team might conclude that this is no good, and it dies. Among them, fewer yet would be worthwhile. You might have some screenshots, graphic representations. The next step is to make a prototype. In Magic Labs, the mechanical magician is just sitting behind you and the software wizard is right across the table, so you can quickly gather a couple of people and decide, "Hey, let's go make a prototype." That could be made within a week or two and you could try out the idea. If the idea is just mediocre, it might get killed at that moment. If a concept proves to be excellent and you get a lot of positive feedback, then we start to develop it further. Eventually some ideas, very few, will become innovations like Touch Flo.
For many years, HTC was content to build phones for other brands but recently the company's own brand has become more prominent. What happened?
The transition was not like flipping on a switch. It actually happened gradually. Even three, four or five years ago, HTC did not put its logo on the phone. If you go online, there are a lot of communities talking about HTC phones. The HTC brand was already there among its users. A few years ago we started to put the HTC logo on the phones. We basically formalized the brand recognition on the physical product.
Let me share with you how we think about brand. There is a very important difference between brand value and brand recognition. Brand value means something to the end user. Brand recognition, all it means is a bunch of advertising to make people recognize the brand name. At HTC we care about brand value, not brand recognition. Building brand value is like earning respect; you have to earn respect, you cannot buy respect. And the way to earn respect is by continuing to deliver innovative products and creating value for the market, and that has to be done time after time again. It is a journey.
How does the release of the Dream phone contribute to that journey of building brand value?
It's another example of HTC innovation. It's the world's first Google phone. We have been investing and innovating side by side with Google for close to three years. That's not the first or last time we're going to do that.
What can your company teach the business world?
AT HTC every day we think about doing the right thing for our customers. We don't spend a lot of time worrying about promoting the HTC brand or trying to get people to know about HTC. HTC is fairly humble and we are very focused on doing what we think is the right thing for our customers.