On growth of digital ledger and blockchain technology (spring 2020)

Digital Ledger Technology (DLT) and blockchain technology has very much suffered a slower growth over the last year and a half. Here are a few reasons:

1. Integration of DLT is expensive because the integration needs to be deep to be robust to failure.
2. Given the depth of integration, the DLT owns much of the future, not the companies that integrate the DLT. This happens also with cloud and AI migrations, yet with blockchain this dependency is much more absolute. To alleviate this, DLT users may become partners in the DLT system, yet with additional risks and costs.
3. Cryptocurrencies are killing the growth of broader DLT technology. In effect the equivalent of >200 billion $ of cryptocurrencies are digging their feet in the ground (1.7 trillion $ in March 2022), and all saying "not without me", with almost an infinite marketing budget to fight other forms of tokens that would cut them out, such as tokens of trustful processes.
4. The cycle of innovation in blockchain is extremely fast because it is mostly just math, and math will progress, ensuring a quick obsolescence of each generation of blockchain technology. While obsolescence of technology is normal, blockchain is very much a space where theory progresses faster than implementation. And that is a tricky space to invest in.

Interestingly, in 2015, I founded a decently sophisticated DLT technology company (Elevence, then acquired by Digital Asset). I wanted to build a very formal, "pure thought" like, software company, with the goal of developing a smart contract product, and was lucky to hire a great team that delivered a blockchain based smart contract language in less than six months.

All original content copyright James Litsios, 2020.

Search and Vision for Systematic Innovation

How to be productive in innovation?

The simple answer is "work hard", "be systematic", "believe in a larger vision".

Best to illustrate this:

I am writing a python program to do something new. I know that to be innovative I need to be "one level above" what was previously done. So I include a construction which I know enables this "newness". The problem is that this construction does not fit with "the normal code".  I notice this only after my first attempt to put things together, when on the way to a design, I cannot find a way to bring back in the requirements I have dropped. Let's call this first attempt design A. 

When you fail, you try again. I pivot my design, now to focus on B. Same result, design fails to bring in all requirements. I try again, now focusing on C. Same result, the design does not fit. A this point I start worrying. I step back. I explain to my daughter: "tricky, but I have got it! What we need is to go a level above and dynamically bring in A, B, and C concepts in a pre-sorted meta-design that depends on the input data". This new design, let's call it sorted ABC is not easy... and it also fails! Now I am seriously worried.  

I try again. Yet this time, knowing that A, B, C have failed, as did sorted ABC, I step back further. I go all the way to the "one level above" concept, which I take out, and put back in, in a complementary way. In two days, I have the design, and in a week I have all the requirements in it.

Innovation is just a "search algorithm". Edison knew this. The pharmaceutical industry has scaled this to the extreme. What is a little bit tricky in computer science, and similar technology domains, is that innovation is a mental game. The result is that failure within a search effort impacts moral and motivation.  The fact is, if you have not prepared yourself, it is not possible to invest yourself, and not feel the pain of failure.

The effort I described above took me more than a month. I might mention that I was getting seriously upset with my repeated failures. Yet the trick is that failures that are progress within a bigger vision are acceptable. They are painful, they make you lose time, but they are still ok if they bring you closer to your vision. Therefore the simple rule in innovation is that your need that larger vision before you start! And in fact no work should be done without that larger vision, and that larger vision needs to be a real concept of delivery of a real product with real innovative advantages.

A key ingredient to this process is that failure must reduce the search space towards your innovative vision. As a leader or in advisory roles, I find myself repeating and emphasising this more than anything else. Because this is the "crux" of productivity in innovation. Again: FAILURES MUST BRING YOU CLOSER TO YOUR VISION!

Finally, if your failures are not bringing you closer to your vision, then you have placed the bar "too high" and you need to diminish your expectations, and reduce the scope of your vision.


All original content copyright James Litsios, 2020.