Innovation and adaptation: A123 Systems and Plan B – B123 Systems?
One of the things that I find fascinating about innovation in high-tech is the demand for adaptation. This is beautifully illustrated by a posting by Howard Anderson about A123Systems (who was good enough to come into my MIT class with Yet-Ming Chang, the company’s founder and author of the paper mentioned below):
I was never more aware of [the] truism [that strategy is what you said was your plan after you blundered and lucked your way to a win] than at the recent IPO for A123 Systems, a new-age battery company that a few of us backed seven-and-a-half years ago. The original idea: Build lithium ion batteries for cell phones and laptops. Who wouldn’t want a cell phone that you charge once a week or a laptop that you charge once a month?
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One problem: The technical hurdles weren’t so easy to fix. The original technology we licensed from MIT was world class, so there really wasn’t anything else to do but keep a lid on spending and hope for technology breakthroughs.
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Today, the investors look like geniuses because we invested in “alternative energy” before it was cool. Really, we did nothing of the sort. We invested in an academic paper in material science that was attempting to take a process and turn it into a product.
On Wednesday I taught the A123 Systems case (along with E Ink) to open my New Technology Ventures program at London Business School, and I illustrated this shift with an earlier and later image from the website:
A123 Systems early focus on power density
Compare and contrast this with the subsequent shift to focus on power, safety and life:
A123 Systems later focus on power, safety and life
Talking of safety, I use the following video to try and provide a powerful meme:
[youtube=http://www.youtube.com/watch?v=YV8_meso6kU&hl=en&fs=1&]
