Innovation Starts With Sensing Future Possibilities

In 2007, a team of MIT professors decided to bet on an impossibility. These were the days when "mobile" still meant "I’m speaking to you but my phone isn’t anchored to a cable," when the vision for mobile advertising still looked like walking past a Starbucks and having a coffee coupon flash up on your screen ("geosensing," they called it). These professors decided to chart a different path.

They began building a database to track little clues your mobile phone spits out whenever you use it—your device code, time of day, location info—so that they could make sense of the information. They figured their quest would be valuable to someone, so someone would pay for it.

The database was practically useless at the time. Mobile phones were not pervasive, there was no central repository to which these clues were sent, and advertisers were not paying for this kind of information.

But they forged ahead, and today their quixotic journey has become Sense Networks, one of the world’s leading providers of predictive analytics, processing more mobile location data points than any company except Facebook and Google. They are sitting at the center of an emerging ecosystem, like an empty hub around which a giant wheel has been built.

I recently spoke to Sense Network’s CEO David Petersen about the journey. What he shared sheds light on a critical secret behind many of today’s most valuable innovations. If we understand this secret, maybe we too can find our way to the center of a movement that will propel us upward.

Behavior, Not Technology
For Sense Networks’ offering to be of real value, they needed a way to tap millions of mobile device data points. Phone carriers won’t share this easily. But luckily for Sense Networks, behavior started shifting when a new standard emerged call "Real Time Bidding" (RTB). When you use your phone, it sends information to a marketplace, similar to a Wall Street trading floor. It does not share your phone number or name, but it sends enough data that bidders can decide if they want to buy advertising on whatever app you are using. While playing with my PicsArt app last week in Puerto Rico, ads popped up that were suddenly relevant to me—boating trips, travel deals—because someone (probably Sense Networks) recognized that my phone is usually on the streets of New York but is now on the white beaches of Puerto Rico.

This marketplace collects information from millions of mobile ad calls and allows advertisers to bid. But for an advertiser to place a smart bid, they need to know more about that phone—where I accessed an app from the day before and the year before that. Sense Networks can tell them that and, better yet, through a well-honed algorithm, automatically calculate how much the advertiser should bid to maximize its return.

All of the technology required to make this possible existed years ago. What was missing were the behaviors—people to set up the marketplace, advertisers starting to bid, phone companies sharing the data, the agreement on a standard protocol.

As David says, you have to "imagine what the future could be like," and play for that future. And that future is determined as much by changes in behavior as by changes in technology. Think about who does this well: Apple is brilliant at predicting how behavioral shifts will make new things possible. Google, too. Followers look primarily at new technologies.

Language: The Leading Indicator
How we talk reveals how we see the world. The name we give something tells us what to do with it. Before BCG invented its famous "BCG Matrix", introducing into the business lexicon terms like "cash cow" and "star," business leaders had no way of describing the concept of measuring their businesses like a portfolio. You’d walk into a board meeting and could not explain succinctly why you invest less in one profitable business and more in an emerging one losing money.

As these terms took up, behaviors started changing. Companies started managing themselves differently.

Today’s meaning of the word "mobile" is radically different than it was 10 years ago. Today when you stand in front of an investor and say you plan to play in "mobile," you open up an entirely new world, industry, field of possibilities.

So pay attention to how language changes, and you can get foresight into how behaviors are changing, how new possibilities are coming to be.

[Image: Flickr user Live4Soccer]

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