Get a few bucks in the bank and your name in a magazine or two, and solicitations for "angel" investors come at you faster than you can pretend to read them. Another prospectus arrived today, and there's a lot more wrong with this one than the fact that its covers are too far apart. The gold rush is never over, I guess. It's kept alive and kicking by rich/bored entrepreneurs who were smart enough to cash out of the dotcom rush early, poor/determined ones who weren't and the ever-hopefuls who missed the last wave completely. A few good ideas and lots of bad ones. The worst ideas feature all the untested assumptions (and promise to repeat all the mistakes) that made the dotcom crash so inevitable. The big difference now, of course, is that it's OK for investors to ask the hard questions without being accused of not "getting it."
My current favorite for fastest way to lose a fortune involves a startup in New England that wants computer-repair technicians to get their parts from unmanned depots, dispensed from what amounts to a vending machine (a very big vending machine). No cost-benefit analysis, no customers, a few hundred loose ends around the logistics -- but the hook, the killer app here worth throwing money at, is that the vending machines will call home via the Internet to report inventory. Jeez!
Listening to nonsense like that and watching my investments being ground to a fine powder got me wondering about whether things might have turned out better for the economy and investors had CIOs been more integral in the spending and development decisions made during the past 10 years. And I'm not just talking about technology decisions. I wonder how many bad ideas might never have been funded or how many good ideas might have been rescued from incompetent management or bad execution. Oh sure, CIOs are members of senior management, and a few are even showing up on the boards of high-tech companies, but how many CIOs or ex-CIOs are there on the boards of the Fortune 500? Are there many CIOs among the partners at venture capital firms, or is it always just about the IPO? The answers are: not many, no and yes!
Hang around long enough and it hits you that the notion of progress and innovation as a continuum is nonsense. Time doesn't flow, it ticks, and between the punctuations of life and process-changing inventions, recycled ideas and gadgets rush in to fill the gap and keep us occupied. For example, Microsoft and the companies that will eventually manufacture the product have set Nov. 7 for the introduction of a device you won't want to miss—the Tablet PC, billed as a powerful, pen-based computer unfettered by a keyboard. This caps a two-year effort by Microsoft and others to generate excitement about handwriting recognition and digital ink.
I got my most recent reintroduction to tablet PCs right here in Austin, Texas, from some ex-Dell Computer Corp. executives who founded Motion Computing, one of the dozen or so companies (including Fujitsu Ltd., Hewlett-Packard Co., Toshiba Corp. and other powerhouses) that will design and manufacture these devices and compete for your tablet PC dollars. Unlike most of its future rivals, Motion's offering will be a pure tablet, as in no keyboard at all (although one can be attached). Others have chosen to hedge their bets by taking pretty standard laptop designs and modifying them into hybrids whose keyboards can be maneuvered out of the way. The average price will be about $2,500, or roughly $800 more than a pretty good laptop and a PDA.
I know most of the founders, investors and management team of Motion Computing, and they're some of the smartest, most able people in this industry. But as I watched the demonstrations and listened to the development and marketing plans, I became concerned that they had overlooked the lessons of the past. Missing, not surprisingly, from Motion's executive team and board of directors is the participation of an experienced CIO, vital not only for her input as target audience but also as reference for why tablet PCs have failed in the past.
The first tablet I ever looked at was the GridPad around 1989 or 1990, while I was at Pepsi. At the time we thought it might have potential for a broad range of applications. Though it had only an 8088 chip, the pen demo programs were great, and the handwriting recognition, while not perfect, was good enough and would, I figured, get better over time. After months of development and testing, we decided the drawbacks outweighed the benefits and didn't deploy. The same went for the second-generation tablets from companies like Go Corp. and Toshiba's Dynabook. That the latest offerings haven't solved the problems of the ones that came before ought to be of great concern to anyone thinking of investing in this technology.
One reason you may have heard for past failures was that handwriting recognition was unreliable. That wasn't the real problem. You could get recognition to work most of the time if you trained your hand to write like the software wanted you to. From what I've seen, improvements in handwriting recognition have come along at about the same speed as voice recognition -- slowly and with no step function improvements.
Here are the actual reasons for past failures (which any CIO responsible for making technology buying decisions would tell tablet PC manufacturers to consider before investing millions):
-- I type faster than I can write, and I can't read my own handwriting.
-- I don't have to boot up a pad of paper or recharge the battery in my pencil.
-- For casual data entry and retrieval and wireless e-mail, I have a US$300 PDA.
-- Budgets what they are, I'm not sure my company should invest an extra $800 per laptop, and...
-- People drop things!
Here's a prediction: Tablet PCs won't be a hit. Most companies will stick with the more rugged "brick" devices for workers who have to move around a lot, consumers won't pay the extra bucks, and handheld computers are a serious competitive threat as they migrate up market. Every CIO I've talked to agrees, which makes me wonder, who are the tablet makers talking to? Who do their boards depend on for advice when considering massive R&D investments like this?
If you look at the composition of most boards, they're a collection of active and ex-CEOs, a consulting partner or two, somebody with connections in government, a CFO to chair the audit committee, and this or that professional board member to fill this or that special need. Scary, because these days, every significant investment decision made by a board has a technology or process component, recommended by a management team that may or may not have either the expertise or the objectivity to provide a full and fair assessment of its value or risk. Who on the average board has the technical expertise and battle-tested experience to protect the shareholders' interests? If there's no CIO on the board, the answer is probably no one.
Information technology has come to be the golem of many CEOs and boards: a lumbering, poorly defined servant too ugly to love and too big and important to ignore. Time to give the IT golem the respect it deserves and the attention shareholders and investors should demand. Time to make room for one more seat on the board.
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