Tech Scouts — In Search of Disruptive Technologies

Which Way Is The Future?

A friend and customer from a major telco had a last-minute emergency and asked me to stand in for him to speak to a group of Fortune 100 technology scouts at their annual meeting. I did not know there was such a thing as a tech scout but apparently, there is such a job and from what I heard, they are out in search of disruptive technologies.

Since I am no tech scout, I presented how hard it is to bring a disruptive technology to large corporate accounts. Several attendees subsequently called saying they found it valuable to hear from the “sell side.”

Key points:

By its very definition, a disruptive technology has no antecedent. It has no parent. Nobody has ever seen it—thus, how can a tech scout go and look for it? Searching for a disruptive technology is impossible—one does not know what one is looking for. Tech scouts find better ways to do known things, they cannot look for something they cannot describe.

Corporations do not want to be disrupted. Most corporate citizens are just fine going to work every day and getting a paycheck. Then there is the kids’ soccer practice after work. A disruptive technology can change everything. Change is perilous and corporate middle management does not want peril. If you have a disruptive technology, skip the middle management and find the company who is second or third in a market, losing market share and find an executive there who needs a winning hand or he loses his or her job. That is the only landing zone.

If you want to bring a disruptive technology to market, its application may not be what you think. A CEO friend built a database system that daily runs more transactions than all the credit card companies in the world combined, and he runs it on less than $50,000 in hardware. He took it to several CIOs and showed them he could eliminate entire data centers—

Surprise! They were not interested.

He then met with a company who is struggling in its market, losing market share, and they immediately saw its potential. But, the potential was not as a database engine, it was the ability to take apps written in tens of millions of lines of code and run them in less than 10,000 lines of code. Thus, legacy apps costing millions of dollars to support can now be rewritten in less than 30 days, run faster, and need only a few thousand dollars a year to support. The value of the technology was not what its inventor first saw.

Do not let a crisis go to waste. Another CEO has a security product that does not stop intrusion, it just makes sure that any intrusion ends up with the bad actor getting only a few records. The rest are just not there—so there cannot ever be a Target, Yahoo or Equifax hack if one uses it.

One would think everyone would have an interest—but security people just did not seem to care. He said every call he had with security people ended up with responses “…we have all the security taken care of, don’t need what you have.”

Then came Equifax. Equifax security people probably told their FORMER CEO they had those 150 million records covered.

Now my friend’s marketing skips the security people, goes to the CEO and says he cannot stop hacks but he can stop any hack ever getting more than a handful of records. That means they do not get fired. Pretty good messaging.

Since his technology is disruptive, even the best security people did not recognize its value—until Equifax focused the mind—of the CEO. And now a major company we all know is funding his development and will take it to market.

Bringing disruptive technology to market is not easy and those who should be grabbing it with both hands often do not.

The message to tech scouts is that even if they find a disruptive technology, it may not be easy to get their management to adopt it and harness its value.

Most people do not want to be disrupted.