Allergan’s products are well suited for the needs of the aging baby boomer population and appear to be riding a wave of technical success well matched to a demographic wave. Many growth opportunities still exist, and with the heavy investment in innovation and research, Allergan appears poised to continue growing, something that is unusual for many large pharmaceutical companies these days.

The company began in 1950 when chemist Chemist Stanley Bly developed anti-allergy nose drops and got the help of his friend, Gavin S. Herbert Sr., who owned a pharmacy. Two years later, after listening to advice from a pharmacist about patient needs, they developed an eye drop with anti-histamine, the first such eye drop in the United State. Sales skyrocketed and Allergan became a major player in ophthalmology, which today makes up almost half of their business still.

Listening to market feedback and acting on clues and suggestions from knowledgeable people like a pharmacist allowed Allergan to quickly shift its focus and its product array in the early days to address an important unmet need. This led to eye products, not just nose drops, and the opportunity in ophthalmology that will continue to be huge for Allergan, now representing nearly 50% of sales, if they can keep an eye on innovation.

Nokia’s CEO, Stephen Elop, gave this speech to employees last week and the transcript has been posted on several sites such as Casey’s Daily Dispatch, the Wall Street Journal’s TechEurope Blog, Ongo.com, MSDN.com. It is brutal and painful. A few years ago tech stock experts recommended Nokia as one of the leaders in the business and best investment opportunities. But by focusing on their existing markets and competencies, they missed the changes that would envelope the market and misallocated their innovation resources. They are now on a “burning platform.”

There is a pertinent story about a man who was working on an oil platform in the North Sea. He woke up one night from a loud explosion, which suddenly set his entire oil platform on fire. In mere moments, he was surrounded by flames. Through the smoke and heat, he barely made his way out of the chaos to the platform’s edge. When he looked down over the edge, all he could see were the dark, cold, foreboding Atlantic waters.

As the fire approached him, the man had mere seconds to react. He could stand on the platform and inevitably be consumed by the burning flames. Or he could plunge 30 meters into the freezing waters. The man was standing upon a “burning platform,” and he needed to make a choice.

He decided to jump. It was unexpected. In ordinary circumstances, the man would never consider plunging into icy waters. But these were not ordinary times – his platform was on fire. The man survived the fall and the waters. After he was rescued, he noted that a “burning platform” caused a radical change in his behaviour.

We too, are standing on a “burning platform,” and we must decide how we are going to change our behaviour.

Over the past few months, I’ve shared with you what I’ve heard from our shareholders, operators, developers, suppliers and from you. Today, I’m going to share what I’ve learned and what I have come to believe.

I have learned that we are standing on a burning platform.

And we have more than one explosion – we have multiple points of scorching heat that are fuelling a blazing fire around us.

For example, there is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed but very powerful ecosystem.

In 2008, Apple’s market share in the $300+ price range was 25 percent; by 2010 it escalated to 61 percent. They are enjoying a tremendous growth trajectory with a 78 percent earnings growth year over year in Q4 2010. Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range.

And then there is Android. In about two years, Android created a platform that attracts application developers, service providers and hardware manufacturers. Android came in at the high end, they are now winning the midrange, and quickly they are going downstream to phones under €100. Google has become a gravitational force, drawing much of the industry’s innovation to its core.

Let’s not forget about the low-end price range. In 2008, MediaTek supplied complete reference designs for phone chipsets, which enabled manufacturers in the Shenzhen region of China to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one-third of the phones sold globally – taking share from us in emerging markets.

While competitors poured flames on our market share, what happened at Nokia? We fell behind, we missed big trends, and we lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.

The first iPhone shipped in 2007, and we still don’t have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.

We have some brilliant sources of innovation inside Nokia, but we are not bringing it to market fast enough. We thought MeeGo would be a platform for winning high-end smartphones. However, at this rate, by the end of 2011, we might have only one MeeGo product in the market.

At the midrange, we have Symbian. It has proven to be non-competitive in leading markets like North America. Additionally, Symbian is proving to be an increasingly difficult environment in which to develop to meet the continuously expanding consumer requirements, leading to slowness in product development and also creating a disadvantage when we seek to take advantage of new hardware platforms. As a result, if we continue like before, we will get further and further behind, while our competitors advance further and further ahead.

At the lower-end price range, Chinese OEMs are cranking out a device much faster than, as one Nokia employee said only partially in jest, “the time that it takes us to polish a PowerPoint presentation.” They are fast, they are cheap, and they are challenging us.

And the truly perplexing aspect is that we’re not even fighting with the right weapons. We are still too often trying to approach each price range on a device-to-device basis.

The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem. This means we’re going to have to decide how we either build, catalyse or join an ecosystem.

This is one of the decisions we need to make. In the meantime, we’ve lost market share, we’ve lost mind share and we’ve lost time.

On Tuesday, Standard & Poor’s informed that they will put our A long term and A-1 short term ratings on negative credit watch. This is a similar rating action to the one that Moody’s took last week. Basically it means that during the next few weeks they will make an analysis of Nokia, and decide on a possible credit rating downgrade. Why are these credit agencies contemplating these changes? Because they are concerned about our competitiveness.

Consumer preference for Nokia declined worldwide. In the UK, our brand preference has slipped to 20 percent, which is 8 percent lower than last year. That means only 1 out of 5 people in the UK prefer Nokia to other brands. It’s also down in the other markets, which are traditionally our strongholds: Russia, Germany, Indonesia, UAE, and on and on and on.

How did we get to this point? Why did we fall behind when the world around us evolved?

This is what I have been trying to understand. I believe at least some of it has been due to our attitude inside Nokia. We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven’t been delivering innovation fast enough. We’re not collaborating internally.

Nokia, our platform is burning.

We are working on a path forward — a path to rebuild our market leadership. When we share the new strategy on February 11, it will be a huge effort to transform our company. But I believe that together, we can face the challenges ahead of us. Together, we can choose to define our future.

The burning platform, upon which the man found himself, caused the man to shift his behaviour and take a bold and brave step into an uncertain future. He was able to tell his story. Now we have a great opportunity to do the same.

Stephen.

Alex Daley’s commentary at Casey’s Daily Dispatch on this memo is among the best. A few excerpt from Alex follow:

But one of the mobile world’s most celebrated early stars is fading, and fast – Nokia. The Finnish mega-company traces its roots all the way back to the rubber industry in 1865. But it evolved over nearly a century and a half into the largest mobile phone supplier in the world. At its peak, the company accounted for the majority of all phones in the world. However, lately things have begun to unwind. Market share for the company has slipped from 39% in 2008 to 35% in 2009, and again to 30% in 2010.

Not only is their global market share decreasing, they’re being assaulted from every side and find themselves with shrinking influence, shrinking margins and shrinking options. Apple, RIM, and the contingent of Android phone manufacturers around the world have gulped up the overwhelming majority of the high-end smartphone market, where profit margins are high. On the other end of the spectrum, Chinese technology outfits have begun to lock up the massive lower end of the market, turning out designs and equipment at a breakneck pace.

Desperate to find relevance in a market moving on without the company, last year they appointed former Microsoft executive Stephen Elop to the position of CEO. He has been pretty quiet since he joined the company, taking his time to learn the business and get to the root of the issues that cause the market to value this technology giant at less than the $43 billion in revenue it generated last year. Quiet until now….

And [Elop's] use of the term “platform,” while symbolic, seems like a calculated choice for a company that staked its future on a failing developer platform known as Symbian, and a long delayed smartphone platform called MeeGo yet to even launch nearly four years after the iPhone was originally released….

The question of the hour is not just whether or not that will happen, but whose platform it will be. Apple doesn’t license. HP has locked up WebOS with its Palm buy. That really only leaves Google, whom Elop cites as a competitor, and Microsoft, his Alma Mater, which goes completely unmentioned in the damning note….

Elop’s failure to mention Microsoft was certainly deliberate, for a few days later he announced a major partnership with Microsoft aimed at saving the company. See “Microsoft, Nokia Agreement Signals New Smartphone Game,” a Feb. 14, 2011 story from EWeek.com.

Microsoft and Nokia announced a wide-ranging partnership Feb. 11, which will include running Windows Phone 7 on Nokia smartphones, in a combined bid to blunt the competitive momentum of Google Android and the Apple iPhone.

“We have a formidable plan to ensure our collective leadership in the smartphone market and in the ecosystem that surrounds it,” Nokia CEO Stephen Elop told a London press conference. “Our long-term strategic alliance will build a global ecosystem that creates opportunities beyond anything that currently exists.”

Now comes the hard part: actually building that ecosystem.

A formidable plan? I’m sorry, but part of me cringes when anyone declares that the plan they created is “formidable.” Too close to “fool-proof.” And we went from desperation on the brink of ruin on a burning platform one day to a formidable plan the next? Eweek mentions some reasons to restrain enthusiasm:

“Microsoft wins big in this arrangement, having gained a partner for an OS that is struggling in the market and losing share even among its current device suppliers (e.g., HTC),” Jack Gold, principal analyst of J. Gold Associates, wrote in a Feb. 14 research note. “Nokia brings huge scale and can dramatically increase WP7 market share beyond its traditional reliance on vendors with much lower market share. And this precludes Microsoft from having to enter the device market directly (as it did with its Kin disaster).”

However, some analysts see the deal as a decidedly negative one for Nokia, particularly in the longer term.

“We think Nokia has created a new set of issues—a lack of ecosystem control, margin decline and a raft of new royalty payouts—in return for a ‘unique relationship,’” Lee Simpson and Andrej Krneta, analysts with Jeffries & Co., wrote in a Feb. 14 research note. “With WP7 as Nokia’s new primary smartphone OS, why would any operator take an end-of-life product (Symbian)? This can only cap the top line for Nokia going through 2011 and much of 2012.”

The analysts believe that Nokia’s first Windows Phone 7 devices will be “hollowed out ‘N8s’ or the like,” referring to one of the manufacturer’s higher-end smartphones. “Despite longer-term assertions of speedy time to market designs, the overhauling of road maps (and cancellations near-term) will likely dent near-term progress and leaving Nokia dangerously exposed to further market-share erosion.”

I wish Nokia success, but feel that it will take more than Microsoft to bring them success. Innovation fatigue needs to be addressed at multiple levels in the company and the culture radically strengthened to reach their destination. Otherwise, further fatigue may stand in the way.

This week Amyris created a stir by announcing a record number of deals and partnerships for a single week (a record among bioenergy companies, according to Biofuels Digest). These partnerships include P&G, Total, Soliance, Cosan, M&G Finanziaria, and Shell:

Amyris has taken it up a notch with a series of stunners surrounding its synthetic farsenene, which it has named Biofene – the first product that Amyris is seeking to produce at commercial scale.

Beyond its success this week with Biofene announcements, which are the basis for the P&G, M&G and Soliance partnerships — there are the broader arrangements with Cosan to develop a platform in renewable chemicals, and the equity agreement with Total that will provide needed capital as well as a broader platform for Amyris’s expansion into hydrocarbon fuels.

The mysterious agreement with Shell, regarding diesel, is one to watch. The decidedly vague disclosure was buried in Amyris’ amended S-1A registration statement, but not otherwise mentioned in a flurry of press releases from the company as it promotes its expansion in this pre-IPO environment. Shell Western Trading & Supply is one of 17 Shell trading companies that buy and sell to customers within and outside of Shell.

This news shows an interesting example of companies forming partnerships with an innovative start-up with great technology and apparently highly valuable IP. According to my Patbase search, Amyris has 21 patent families, quite a large number for such a young company. They clearly have been active and aggressive in pursuing patent protection, and those patents are critical for the meaningful partnerships they are now forming. It’s a great unfolding story of open innovation and technology transfer.

The story extends beyond the US. They have operations in Brazil, for example, which is one of the world’s hotbeds for bioenergy, bioproducts, and collaborative innovation.

Further information comes from today’s article, “Amyris: farnesene and the pursuit of value, valuations, validation and vroom,” also from Biofuels Digest.

Brian Argo

Our idea was simply to form a microscopic mold as a template, fill it with metal, and remove part of the template leaving individual metal hairs surrounded by an insulator. Then, we could use any number of methods to coat the hairs and form solar cells. At the end of the day, its not too far technically removed from fabricating a micro scale Popsicle using a semiconductor foundry.

When our technical work started in earnest, we thought we might have been a bit deluded to think we scooped the big boys of the world (GE, BP, Sharpe). Off to my basement I went. I worked through the physics. I looked through hundreds of journal articles. I read through over 3000 patent abstracts. All the while, simply using Google, the US PTO, and the WIPO search engines. While I prefer using search engines like Aureka, it really isn’t to bad doing a search manually either. As long as you are short on money and don’t mind working like a mad man, it’s not a problem. I was worried that I must have missed something so I double-checked my search against an IP search using artificial intelligence. No significant prior art came up.

It become evident that geometry of the nano scale hairs was perfect to create a super solar cell. The solar cells are probably coated with what are referred to as nano dots or at least coatings so thin that phenomena that cause electrical losses due to excessive thickness disappeared. The cells are also super light absorbent and conserve rare materials. This was not lost on the theoreticians. However, their further belief was that semiconductor equipment is cost prohibitive for the use in solar cells, which is correct for machines found in state-of-the-art foundries. What they missed was that older, more primitive equipment was sufficient to make the nano-wire solar cell cost effectively. General George Patton once said, “If we’re all thinking the same thing, someone isn’t thinking.” In retrospect, groupthink in the solar industry left us a brief crack of time, which we used to patent and develop the technology. In the years that followed, we learned a lot of work had started a short time after ours.

The intellectual property needed to be done flawlessly. In my mind, that meant that I should draft the applications myself. However, the group voted to go with a big name national legal firm. Since we were bootstrapping the enterprise, we were starting with a provisional patent application. To save on legal fees, I drafted the application. Next, I spent the two weeks bringing an entry-level patent attorney up to speed on our technology, and then she let us know that the application was excellent and she supported filing it. No added claims. No significant improvements to the specification. Only a big “atta boy” and an invoice for $15,000. I think that when you work with a large legal firm and you are a fledgling startup, it is very unlikely that you will get the “A” level support. In the end, I suppose I did what I set out to do; we were just poorer for the experience. My only other qualm with our process is that our team viewed IP development as an ancillary activity. Some people just don’t get the value of IP until it is too late. Eventually excellent counsel was located through a recommendation of a former colleague, and the final application was done well.

Now all we needed was money. We chose two avenues, grants for academic research and angel money. Neither path is easy, but we managed to get several grants. The grants were nice to keep members of the team solvent, but they can also be a trap where too much focus is on writing papers. We found this to be the case, and eventually refocused fund raising on angel investors. That is not easy either. To get angel money, you need to have a good idea, and you need to have someone they know on your team. People who are trusted by angel investors or venture capitalists are not necessarily people that can be trusted. I cannot over emphasize how difficult it is to find a good person that meets that criterion. Mark Twain once said “A man who carries a cat by the tail learns something he can learn in no other way.” You cannot do too much background work. Fund raising last year was not fun. A Nobel Prize winner, a Stanford electrical engineer who graduated top his class in two and a half years, and few dozen other technical leaders, vetted us out. It was our experience that the complexity of the idea got lukewarm responses or ridicule from VC’s with little technical depth, but fantastic responses from investors with high levels of technical skill.

As grants and angel money trickled in, I frantically yet frugally raced to develop a prototype always working to stay one step ahead of the money. One problem was that there was no other technical support. Another problem was that manually performing operations that are normally automated around the clock is challenging. After many months of grueling work, it was gratifying to find that everything worked as I thought it would. Finally, individual investors gave us the money we needed to enter into long-term process development. The project has been moving forward according to plan. However, my personal and business priorities were not a match with the new management of the company, and the company no longer employs me. I am back in the consumer products business enjoying a brisk consulting business. This type of venture is not for anyone with a weak stomach for long hours, high risk, or high stress. However, if you are willing to pay the price and can work with trustworthy people, it can be the most satisfying and financially rewarding adventure in your career.

Swinging at the Innovation Pinata

Appleton Papers invented carbonless copy paper about 50 years ago. Their chemists found a way to place a clear liquid inside tiny fragile spheres that could be coated onto one side of a paper. When the spheres were broken by the force of a pen or pencil pressing down on the paper, the liquid would be released and could then react with a chemical in an adjacent layer of paper to form a dye. The newly formed dye in a lower layer of paper creates a copy of what was written on a top layer. Over the years Appleton Papers developed many improvements in the microencapsulation process, but remained focused on creating paper products such as many variations of carbonless paper or thermal paper that develops images when exposed to heat. Their encapsulation systems were brilliant but huge potential was being missed. Only when a team of outside consultants came in to review the opportunities of Appleton’s technology did the company begin to realize just how many new product opportunities might be possible. Outside eyes were needed because those inside the company had grown up with blinders in place that governed the assumptions they brought to the innovation table. Opportunities were framed in terms of what improvements could be made to their paper business, not what new products in other industries could be enabled or enriched with microencapsulation technology. The outside eyes helped Appleton know where to swing, and goodies were soon falling from the innovation piñata after swinging in the direction of Procter and Gamble.

Procter, of course, is famous for its laundry products such as Tide® detergent and Downy® fabric softener. There was a need for controlled release of fragrance from fabric softener that Appleton Papers was able to meet for P&G. By encapsulating fragrance and delivering those microcapsules to clothing, the fragrance could be protected and released gradually as capsules are broken while the clothing is being worn. Sustained released of the aroma made clothes smell fresher longer. Now Appleton encapsulated huge tankloads of aroma for the Downy business, showing the power of open innovation as technologies are applied across disciplines and shared between corporations. Steve said that Appleton had that technology for 50 years, but only recently realized its innovation potential in areas outside of paper, thanks to a secret weapon for those swinging at the innovation piñata: outside eyes.

Another great story out of Africa is the Forbes article, “Can This Bicycle Save Lives In Africa?” by Stephanie Finch. After achieving international success with his bicycle innovations, Frederick K.W. Day noticed that many streets in Africa were lined with abandoned, broken down bikes that quickly fell apart on the rough streets of Africa. He also saw that the huge diversity of bikes being sent to Africa made it very difficult for mechanics to repair due to lack of proper parts and tools for the diverse designs. He is now working to bring rugged, low-cost, easy-to-repair bikes to Africa:

Through his World Bicycle Relief charity the ponytailed entrepreneur hopes to put millions of sub-Saharan Africans aboard special heavy-duty bikes designed to withstand the continent’s rugged roads while carrying 200 pounds of cargo–enough for a weaver to bring his rugs, or a farmer to tote his produce, to market. Moreover, he aims to promote a self-sustaining bicycle economy with regional operations assembling the bikes and area mechanics trained to repair them.

Frederick is making many changes in the bike as well as crafting a business model for distribution and maintenance that will meet the needs of many parts of Africa. It’s not about getting rich, but about truly making a difference in the world for thousands of people. That’s inspiring innovation!

What are your favorite examples of altruistic innovation or social entrepreneurship helping Africa?

Robert’s Rules of Innovation offers a fresh perspective on innovation processes and approaches from an experienced leader who knows what it takes to bring products to the market. This book draws upon not only his experience, but the experience and wisdom of many others that he has turned to for various sections of the book.

Ten rules of innovation are presented in this highly readable and accessible book. These rules include the need to inspire, the need to have a new product development process such as the Stage-Gate® process, the importance of sound idea management processes, the need to observe and measure progress, etc. Each of these principles is reviewed in Chapter 2, and an innovation audit approach is presented in Chapter 3 to help leaders evaluate where their company is for each of the 10 rules. Several chapters follow which help guide leaders in implementing the rules such as:

• crafting a culture of innovation (a theme of Chapter 4),
• innovating with multinational teams (Chapter 5), with tips for working with people from nations such as Brazil and China;
• developing intellectual property in “Patently Obvious,” the title of Chapter 6, which offers basic information on patents, trademarks, and copyrights.

An innovation checklist is presented in Chapter 8 to summarize some of the teachings.

Appendices provide detailed flow charts on new product development processes that may be helpful to those implementing such systems.

The book products a broad and useful overview from an experienced entrepreneur and consultant in innovation and new product development. The focus may be heavy on the consumer products side of innovation. The beginning-to-end scope of the book also means that information tends to be at a broad, general level. Some of the bullet points may leave readers wondering exactly what is meant or how to follow the instructions.

While some of the information, naturally, is already out there in the literature, I liked the selection of 10 principles to focus on and especially appreciated the contributions in the chapters on the innovation audit and multinational teams. Robert’s experience with multinational teams can provide a helpful foundation for others in this increasingly global business environment.

The book may be most helpful to corporate leaders and entrepreneurs launching companies focused on innovative new products, but there are gems for innovators and champions of innovation at all levels.

Congratulations to Robert Brands for this addition to the literature on innovation!

The Bionic Glove

What I’d like to emphasize is that this innovation was the result of open innovation that began with a random encounter. Bill Clark of Hillerich and Bradsby Company, the company behind the Louisville Slugger and Powerbuilt Golf, was visiting the Louisville Slugger Museum when he met James Kleinert, a famous orthopedic hand surgeon. They began talking, and this would later lead to collaboration and the successful introduction of the only sports glove on the market designed by an orthopedic surgeon.

The real secrets for success behind this story, in my opinion, involve efforts to build and maintain relationships. First, Bill Clark wasn’t sitting at his desk. He got out into an environment where he could meet outsiders that might share some interest in the kind of products his company made. Then he took the initiative to talk with others and learn from them. When he found someone interesting through a chance encounter, he obviously took the initiative to follow up and keep that relationship alive long enough to explore the possibility of learning from or working with the new contact. I wish more had been reported on these steps, but it’s clear that it began with a seemingly random encounter enhanced with follow-up and and a willingness to collaborate for innovation.

Maybe Hillerich and Bradsby Company just got very lucky, or maybe they actively encourage open innovation approaches that motivate innovation leaders to get out and meet people, follow up, and collaborate when it makes sense. I hope the latter is the case. Whether it is or not, all of us can learn from this success. Creating an open innovation culture in your company and in your life will greatly increase the chances of random meetings leading to non-random success in innovation. (These principles relate to my previous post on the social aspects of innovation in which I plug one of the few business books that have genuinely changed my life, Keith Ferrazzi’s Never Eat Alone: And Other Secrets to Success, One Relationship at a Time. The principles he teaches are at the heart of a successful open innovation mentality and culture.)

For quite some time I’ve struggled to find a convenient way to make videos of PowerPoint presentations. I tried a popular commercial screen recording system and found it to be expensive, difficult to use, and so resource intensive that I gave up and removed it from my computer. I tried some other lower cost screen recording systems but found the limitations in features and the quality of the service to be inadequate. Then I ran into Pixetell, and have been surprised in several ways at what it does. I’ve also been surprised at the level of support provided by the start-up company. They’ve won me over and gained enough interest that I reached out to them and asked about their story. How did their founded, Sebastian Rapport, get started with this? Here’s what I found out, courtesy of Dan Cook, Manager of Content at Ontiier, the company providing Pixetell.

Pixetell traces its roots to 2007. It really grew out of necessity. There were a couple of catalysts. Sebastian’s wife, Gabrielle, was working with a team of web designers and struggling to communicate design changes to them in text and email. She would not get back what she was looking for. So Sebastian set to work on the problem. He showed her how to capture her screen, draw some circles and arrows on it, and share the result with the designers. That was fairly effective for her. Sebastian continued to enhance that initial product.

Additionally, at about the same time, he was working with a group of off-shore folks and they were supposed to be on Sebastian’s clock. The reality was, he was oftentimes up from 9 p.m. till 2 a.m. to talk through designs, architectures and so on. He realized that what was needed was a more effective way to communicate visually rich information that was disconnected from time (asynchronous is the word we use). This solution, combined with the work he was doing on behalf of his wife’s business, came together as a single rich communications product. Once again, necessity proved to be the mother of invention.

As Sebastian pursued what would eventually become Pixetell, he began to gather more input from people who saw new and different applications for such a product. A small team of software engineers gathered in Portland to move the project forward. In March 2009, the concept received rave reviews at Demo ’09, a conference where entrepreneurs can demonstrate “how their product will change the world,” according to Demo’s web site. With that additional impetus, Sebastian and his team have raced ahead to put Pixetell into the highly competitive position it now enjoys in the market for visual communications software.

Sebastian’s closeness to the needs of real users helped him identify a huge unmet need and offer a convenient solution.

Part of what makes it so convenient is the speed at which you can set up a recording, make it, and share it. It can include what you do on your screen as well as what your webcam sees. A compact recording is quickly uploaded to a server and is then ready to be shared with others by simply sending them a hyperlink. Compare this to my experience in using movie-editing software to record a simple presentation. Saving a 20-minute presentation in a movie format can take over 20 minutes, and then you have a massive file that needs to be converted to YouTube or uploaded to a server. Pixetell takes away that pain. In moments, I can answer an email with a recording showing someone how to do something such as a patent search and send it right to them. Or I can record a PowerPoint presentation with very little time from the end of the presentation to the time that it is up for others to see. Part of the convenience and flexibility of Pixetell is that the recording can be shared via email or embedded directly on a webpage or blog, as I’ve done here. it can also be saved as a flash video file directly on your computer, so you are not dependent on Pixetell always being in business.

Piexetell files can also be edited. You can split the recording into multiple clips, delete unwanted ones and record new ones in between. That’s a lot of power. It’s a tool that stays active and ready to use whenever you want to make a recording – no lengthy waits for bulky software packages to load. Swift, easy, and convenient. I’m predicting this will be a winner that force some big companies to flee upstream by focusing on advanced features while Pixetell gets a foothold. They have some patent applications filed which may be important in the future. Time will tell if they can adequately protect their intellectual property, which often becomes one of the key factors for success later on.

What innovations do I see coming next for Pixetell? There are already some pretty advanced features, including the ability to attach files to Pixetells and have multiperson conversations. While there is a risk that a start-up will fall into the temptation of adding too many features at the expense of focusing on marketing and delivering the simple, convenient core that gives it disruptive potential, there are also opportunities for some simple audio enhancement such as filters to make recordings sound better or take out some noise, or adding the ability to capture system sounds rather than relying on microphones alone. But I think the most exciting future innovations with Pixetell might come from collaboration with other partners and industries. What could Pixetell do to help health care workers, customer service providers, retailers and Ebay merchants, or primary and secondary educators? What will Amazon reviews look like when reviews start adding Pixetells to their work? What synergies could be found with Skype, Ebay, Flickr, Hollrr, Google Earth, and the hottest social networking tools? How will Pixetell interact with smart phones? So many possibilities–some of which would be distractions at this point for Pixetell, but rich opportunities for the right minds with the right business models.

This will be an interesting experiment to watch.

(Note: I have no financial interest in Pixetell and offer these comments purely out of interest and enthusiasm for the product.)