Rob C. Wolcott and Kaihan Krippendorff - The Proximity Revolution

Today's guest provide an indispensable guide to the proximity revolution showing how it's transforming every industry and our lives. Offering unparalleled foresight for leaders and innovators they reveal how pervasive this trend will be. Proximity represents an entirely new way to serve customers with critical implications for corporate strategy, investing, public policy, supply chain, resilience, and sustainability. Incremental changes to existing business models will no longer suffice.

It is a pleasure to welcome the authors of, "proximity how coming breakthroughs in just in time transform business society and daily life, Rob C. Wolcott and friend of the innovation show and regular guests Kaihan krippendorf welcome to the show Kaihan Krippendorff: Great to be here, you. the. Endorsements are just absolutely stellar for your book and the preface written by professor emeritus of marketing at the Kellogg school of management, Phillip Kotler wrote an absolute killer endorsement.

I'm just going to give you a little taste of this and Rob, maybe you'll build on this "proximity, he said is one of those big transformative concepts that make studying, teaching, and doing business worldwide so fulfilling. As one who has seen many business books i dare say you'll enjoy reading this book.

As you discover our proximate futures, the implications of proximity will be felt for years to come opportunity says, what a brilliant brilliant endorsement by him but also opens the question what is proximity,

Well, what's proximity. You said it anything, anywhere, anytime. And that's not metaphorical. If you look at where things have come from just in the past decade and how much more we have access to on demand anywhere, anytime, , imagine where we'll be in another decade. And so it's coming and this is not a, we think this might happen. The book is not, we think you should try this cause it'd be better. Instead, what Kaihan and I are saying, this is where the world is going.

We don't know who exactly is going to win. We don't know how long it's going to take, and it's going to roll out differently in each environment, each industry, but this is the direction the world is going. And that direction is digital compels value creation ever closer to the moment of actual demand and time and space.

it pushes the production and provision of value ever closer to that moment when you actually have a customer and then you produce and provide, which is fundamentally different from the industrial age model,

One of the cases that are available today that we talk about in the book is the Coca Cola freestyle machine, which is a soda machine that you can go to. And I was actually seeing planet of the apes with my daughter this weekend. And, , and she ordered, a freestyle soda. I would not let her pick this, but some people do pick diet, vanilla, cherry, caffeine free Sprite, right?

Now, if you were to make that in a bottling plant far away and then ship it, you may find somebody who wants that, but the probability is low. One plus one can equal three. That's new value. But sometimes one plus one doesn't equal three. One plus one equals zero because nobody wants that. So by waiting for the last minute to combine things, we can provide people what they want, when and where they want it. Right? So now you can apply that to any industry and we'll see that same.

Pattern, shaping how values gets delivered.

Software literally enables resilient local micro grids. Neighbors producing, storing, and sharing power among themselves, helping make widespread power outages rare. And one of the things I thought about it brought me right back to my childhood . I have a, false tooth , and it used to constantly get broken. And when it got broken, I have to go to the dentist. They'd have to do a color test to make sure it matched my other feet. Then it would be sent off to a lab to be prepared and created.

And I'd have to wait weeks or days. And it was embarrassing going around with no tooth , what it was being molded and colored and then tested. And sometimes it didn't even fit. And I thought about how this idea of proximity. Today i just wait in the dentist and they printed on demand and they actually printed to the exact mold of what my mouth needs i thought maybe you'd riff on that because there's so much in there that you can it anywhere you like

I mean, I'll just start with agriculture cause it's really tangible and compelling. The largest vertical farm in the world right now is in Dubai and it's near the airport. There's a brand new. Khalifa airport that's rising. And, , they grow leafy greens and herbs. It's called Bustanica. It's a partnership with Emirates airlines. And so I visited there in, in December of 2022, doing research for the book. And first of all, the leafy greens are as good as any, any farmer's market.

, but the more exciting thing Aidan is the next day I got on my Emirates flight back to New York and the lettuce in my salad. Was picked at that building the night before. Now on a unit basis, clearly the lettuce grown in that building is far more expensive than the lettuce they might grow in Spain or North Africa, of course. But here's the thing. When Emirates airlines started to doing, started doing the overall math.

Of the whole system, growing the lettuce at a distance, harvesting it in advance, putting it on a ship, a lot of it goes to waste 38 percent of all the food we create in the world every year goes directly to waste and then putting it in a warehouse and hoping I have a good product. Compare that to what they do now. It, they, they pick it a few miles from the airport. They put it in my salad and I'm on, and I'm on my way. So as an overall equation of quality.

As well as cost increasingly, it makes perfect sense. And to put a fine point on that Emirates airlines bought the whole company. Originally it was a partnership. And in February of this year, they announced they're buying Bustanica. And rolling it into Emirates catering.

We grew potatoes and carrots and broccoli and cabbages and stuff like that. And at dinnertime, my mom used to just go, Hey, go out and pick some carrots and potatoes and bring them in. And of course that was a joy for a child to do something like that. But the benefit, not just the environment of that, but to me.

Because you're picking the food when it has its life force still inside it's still alive it's still full of nutrients and that's one of the other things we we miss with all this with all this food being traveled monoculture around the world, we lose so much nutrients in the food as well as damaging the environment.

Not to mention the environmental, impact of creating greenhouse gases, shipping food around. , so we think that the proximate model in a way can go back to the way , we did live in a much more proximate world and now we can start returning to that proximate world. But thanks to technology, we can do it in a more advanced way.

, but one of the things that's exciting to Kaihan and me about distributed agriculture or controlled environment agriculture, think very advanced greenhouses, is that the key to proximate agriculture. is proximate power, proximate, renewable, dependable, affordable energy. And the more we solve that problem, the more we'll be able to have small scale, small footprint, food production closer and closer to demand. The more we'll be able to solve food deserts.

I don't know if you have this problem in Ireland, but in the United States, we have Entire swaths of urban areas where people literally have no access to fresh produce. They end up defaulting to highly processed packaged foods because they're cheap and they're available. And that's not their fault. They just have no access. And so as we improve the energy picture, we actually can dramatically improve the food access, nutrition access picture.

And to return to your original point, Aiden, the more we can do nearby, the more we individually can do like you. Mention the story of you as a small child going out and picking the carrot. That there's an experience of that in life that enriches our lives. And the more we can do proximate to where each of us is in the world, the more we can customize. Our lives and experiences in ways we could never have imagined before.

Number one is changes in the cost of sustainability, these externalities are becoming intranalities in part due to regulations that are being introduced that are forcing companies to only privatize profits and socialize environmental impacts, but those. Environmental impacts are starting to hit the bottom line. Another one is geopolitical uncertainty. We do see clear signs of a form of de globalization supply chains need to start getting shorter.

So you have got that, and then you've just got expectations. People expect more personalized, customized experiences, products when, and where they need them. So you got the enablers and the drivers that are making it economical to pursue these.

throughout society from food to education to work but let's stay on food for the moment i loved the proximity of food challenge that was set by Haier with the Peking Duck challenge because this unravels some of the challenges that we can solve with proximity and using different technologies like iot for example.

So how do we bring Peking duck in greater proximity to where people are given that they're not leaving their apartments? And so this company Haier, they make, , appliances and they've got. Kind of smart appliances. And they said, okay, what does it take to deliver the experience of a Peking duck at your home quickly? And they created this ecosystem of, of partners. They've got farms that, that produce ducks. They've got processing plants that produce the process them.

They've got chefs, they've got distribution, and then they, the chefs will provide a recipe and then you can download the recipe into your oven. And so what you experience you get is you want to Peking duck is delivered. And you put in your oven and the recipe is downloaded and the oven just takes care of it, and then you have your Peking duck. And so like two, things to mention there. One is, COVID forced us to advance proximity.

It's kind of where we were headed, but it forced us into proximity and we realized, wait a second, this actually can work, so, , , it advances by, several years. Right. And the, and the second thing I would say is proximity is enabled by the ability of these compliments to coordinate with each other, to create more immediate experiences.

To the end of 2020, less than a year at, by that point, they had 20, 000 ducks that had been purchased , and created by consumers.

One of the things that dawned on me when I was reading the book is that for us that are reading about this all the time, professors in college teaching about this, giving keynotes, et cetera, there's many, many terms that people don't know. And one of the things I'd love people to get from this episode is just some of the terminology and. Some of the imagination that you could use to go, actually, I could do that in my country.

For example, there was three trends you talked about in the food chapter. One was CEA and Rob, you already alluded to this controlled environment, agriculture. The second was customization via automated moment of use, production and preparation. And then the last was. Alluding to Kaihan mentioned earlier on transparency, prediction and matching of supply and demand.

I'd love you to describe those three at a high level, because they're so important to get, because they don't inspire so many entrepreneurs

. Rob C Wolcott: I'll start with moment of use. , that's a concept that Kaihan and I invented for this book. And it, and there are examples already out in the world. So, any, a moment of use system is simply something that creates or modifies a product, service, or experience. At the moment of use. And so it's sitting there with the capability doing nothing waiting until Aiden wants something very specific.

So the obvious way to think about this, and it's much broader than this, but an obvious way to think about this would be a 3d printer. Um, most of your listeners, I'm sure are aware of, or maybe even use 3d printing where it's sitting there with polymers or metals, doing nothing until you throw a design file in and push a button. And then it starts to make that one part or product to order. And to give an example of how, powerful this kind of a model can be.

, it allows you to do things you could never have done before. , so a slightly different example of this is from Levi Strauss, the, , apparel producer. , so they have a capability, , called laser finishing. You can look it up. And they've used it successfully. They had it in some of their leading edge stores, right? As COVID was hitting. , but you can look it up and , what they do is , they can create stonewash effects, rip jeans effects, any kind of stylistic effect you want.

And instead of taking five days planned in advance at the factory. They take a standard pair of pants. They throw it into this piece of equipment, and 90 seconds later, it's finished exactly the way you want it. Now, what's exciting about this is not only the customization allows you to have, but the dramatically lower cost of serving your customers because you don't have to do the demand planning months and months in advance to see how many Pairs with stonewash.

How many pairs ripped like this in this distribution center? You send thousands of copies of the same pair of pants out all over the place. And they're finished at the very last minute. But even more than that, Aiden, if you walk into the store and you say, I want a picture of my kids on my pants, well, they can do that with this. , laser finishing technology.

And yet there's no scenario where a demand planning team at a company a year ago was sitting there saying, how many copies of a pair of pants with Aiden's pictures of his kids on his pants should we produce for next season? That that conversation has never happened before because we couldn't do it and now we can. and my kids would be going crazy with that. That is not happening. That, that is not happening on my watch.

So the truck is sitting outside and then it's rotting or the truck gets delivered, but the food doesn't get put into the apples will get put on. On display because they already have apples. And what they don't know is they can't predict how many people are going to come and buy apples tomorrow. And because they can't, they don't know that they should actually chop up their existing apples, create some kind of fruit salad, and then put the new apples on display.

So across the entire train, there is a lack of predictability. Do in part to a lack of transparency because these different databases cannot communicate with each other. So we see a democratization , of data through sharing of APIs, throw on that AI. So one of the companies that we covered is called a fresh technologies and they've developed a kind of a software platform. Platform, that is sold to supermarkets and, , the delivery trucks and down the supply chain.

And it allows them to more accurately predict what is coming and , what is needed across the supply chain. When we interviewed them, they were in about 200 us supermarkets. Now they're in well over 2000 and they have saved millions and millions of pounds of potential food waste.

So one of the things I was telling them about, I was trying to explain the amount of waste that we have, the amount of food waste, we throw away a third of what we produce, which is just so criminal, , but 40%.

I can use it as almost like if I think about a 3d printer and the ink I need, or the liquid I need to be able to 3d print, I can use the food as my source ink to create food in the future and then and then finish it just like the levi's Strauss story in different ways for whoever wants it in a certain way maybe it's some type of crisp or some type of chip whatever it might be i love you to describe this because.

This is one of those things were just makes people think differently about the future food.

Now, just to show you how cutting edge this can be, and we really do mean space age.

So in, , in 2018, I got a call from a very good friend of mine, a French space Plant scientists and entrepreneur venture capitalists, Barbara Belvisi. And she called and she said, , I would like to figure out how to grow food on Mars. , and I said, what? It sounded like you said, grow food on Mars. She said, this is what I said. And , I said, okay. And she asked me if I wanted to invest. And I said, no, of course not. I'm not a billionaire. I can't wait 60 years for a return on my investment.

Now, she knew Aidan, I wasn't going to invest because that's outside my purview, but she had just gotten a big grant from NASA to figure out how to grow food on Mars. And this requires high control, isolated space, literally millions of miles away. , and they've made a ton of progress on that. So actually that, that project is ongoing. But what's great about Barbara and her company Interstellar Lab is. She knew she had to create a real business here on earth.

And so what she and her team did is they made a list of all of the very high value, very low volume ingredients derived from plants. So really high value, very low volume ingredients derived from plants. And guess what kind of industries need these, , these inputs? Well, , pharma biotech, but especially skincare, Cosmetics, fragrances. And did I mention that interstellar lab is located right outside Paris? So they have this beautiful hanger just outside Paris.

They've created these pods and , the pods about the sides of the room I'm sitting in. You can walk into it, growing plants, each plant's growing conditions are hyper optimized for that specific plant. And then their clients. So this isn't just a science project. They have real paying clients. The company's growing like mad. , their largest client right now is Robertette, the largest ingredients company. And in January, they announced a big contract with L'Oreal, the luxury products company.

And L'Oreal is putting Interstellar Labs pods in their manufacturing plan. Barbara's company then monitors and controls those pods remotely. And their AI system is running in the background to figure out how to continually increase the yields of each specific kind of plant. So why does L'Oreal care? Well, they can produce inside their manufacturing facility, exactly the amount of specific chemical inputs they need where, and when they need it. And no more. So zero waste.

But here's the really exciting thing. So to give you an example, one of their key inputs comes from a plant called Vertivay. Vertivay grows in Indonesia and the traditional model is they rip the plant out of the ground, cut the roots off. The ingredient comes from the roots and then they have to start all over again. And they have to ship , the ingredient to France. With this new model, Vertivay grows inside these pods. The yield in these pods is over 1000 percent higher than in the wild.

And most exciting from L'Oreal's perspective, they don't care about geopolitics, they don't care for this ingredient, at least they don't care about severe climate events, problems in the red sea, they grow exactly what they need. Where and when they need it. And this is, this business is growing like mad. So you're going to see more companies realizing they need better resilience. They need better access to key ingredients.

And so we'll be seeing controlled environment, agriculture in the food space, , but in the plant agriculture space, but moment of use production broadly across all industries.

I probably should have started with, which is after you described the concept of proximity to ask the question, why now, , what has changed that proximity? Why didn't we think of this before? Or were we not capable of doing it before? What's changed?

And whoever can give it to them best in the long run tends to win. So that hasn't , the demand side, and the aggregate hasn't changed. Obviously specifically what people want. Changes all the time, but what, why now with respect to proximity? Well, two things, number one, global conditions are changing and Kaihan can, can extrapolate a little bit on geopolitics and climate and things like this. But, , on the, as far as technology goes, we can do things today. We could never have done before.

So we've always wanted to have what we want, where, and when we want it. But in the industrial age, we had to use industrial age technologies in order to achieve it. So this is why we've built the global supply chain optimized for scale manufacturing at a distance. In other words, that's why we have massive plants in China and Mexico and some in Ireland and us and wherever. , because the larger my plant, the lower my cost. And that's fundamentally true in an industrial age.

But what's exciting is in the digital age, those equations are just now starting to shift in a meaningful way.

And just to be clear, Aiden, what Kayhan and I are not arguing is we're not arguing in 30 years, there won't be any huge plants at a distance. Of course, there still will be where it makes economic sense, but what's new about where we're going. Is we'll have more and more of these small footprint production capabilities, whether it's a manufacturing, small scale manufacturing or a 3D printer at your home or in your doctor's office or whatever.

And again, proximity is not limited to physical products, but certainly we can do far more approximatizing physical products than we could ever have done before.

But if you just look at digital. It's already there. I mean, think about Netflix. You can watch any video you want anywhere, anytime. So, all video content is already proximate. Now, the production of that content was probably months or even decades ago, but even that is right now starting to change. Think of generative AI like Sora, where you go and throw a prompt in and Seconds later, you get a video of Mastodons roaming the Arctic during the Ice Age.

Obviously that video, and that's a real video now, , and so video content over the next decade or so will be increasingly created from whole cloth, real time. Customized to needs and desires, and whether that's a good thing or not, is another discussion, Aidan.

Kaihan, you, you talk a lot about the geopolitical and the climate aspects driving us toward proximity.

But now the question is, wait a second, we're going to have to start paying for the carbon emissions of sourcing this stuff from far away in the next five years, if we incorporate that in, if we want to reduce the cost, the future risk costs, we need to start doing this now. So there's actually a economic, , a very viable, reason. Also, if we look.

Customers are becoming digital customers. It used to be, you went to a bookstore and you could spend an hour walking around and you bought something. Oh, and they know, oh, we bought, he bought this book. Now you could go online and you could spend an hour on Amazon and not buy anything and they know a lot about you. Right? So we've got to think that customers become digital customers, spitting out information, shared through APIs.

Analyze through AI, allowing us to be much better at predicting when and where it is needed. Now, marry that with the ability to customize a digital solution and more products are digital, a greater portion of the products.

So we could, one of the cases that we have in the book is, , is Domino's pizza, they don't digitally deliver their pizza. But they differ digitally deliver part of the value proposition, which is the information that your pizza is being made. That's been quality check. That's being delivered. That part is getting delivered faster by enabling them to deliver that part of their value proposition faster. They have outperformed almost.

Every other product, every other company, other category, and in the period that we analyze their stock price also outperformed, alphabet or Google. And then what's really exciting is the digital products, which we're able to sense more rapidly. Deliver digital products more rapidly, but now with 3d printing and robotics, now the physical products and the physical aspects of product is getting in the game. And you are able to have a machine that one day produces a cup hubcap.

The next day produces a toothbrush. The next day produces, a pink toothbrush for people who are missing a tooth because they play with rugby. They played rugby and we can customize those to deliver those value propositions. So it is like a virtuous cycle. That's why now.

Well, maybe, I mean, arguably, , no offense to the Domino's crew out there. It's not the best pizza in the world. I mean, can I say that? Am I allowed to say that? But you know what they do? Not only do they get a good pizza, good enough pizza, fast, Now we all know people want their pizzas fast, but they added another layer of value, which is transparency. They were able to show consumers where your pizza is in the process.

And that's a recognition of the fact that there's another set of value propositions that nobody else was serving. Before Domino's started doing that. And digital technologies allow us to discover and serve new kinds of value propositions.

So speaking of indigestion, it's a nice segue for medicines on demand anywhere. So we've covered food and agriculture i thought we'd cover as a last piece today and hopefully we'll do a part two cuz there's so much more in the book. Is for anybody out there working in healthcare, the healthcare revolution is about to change in a massive, massive way.

And one of the scenarios, just like the Peking duck that you posed to us is imagine the fuel bill of drugs you can buy at a pharmacy for only a few dollars when they're delivered by F 16 jets that has actually happened when. The F 16s have to drop off these generic drugs to war torn areas or to people who cannot access these drugs. How can that change in the future? And the guys are going to tell you, this is where MOU becomes really interesting.

We have generic drug shortages at hospitals and clinics all over the United States every day.

And so Dr. Ling came back from one of his tours of duty and he got a big grant from the Defense Advanced Research Projects Agency, DARPA, worked with a team from MIT, and they figured out how to make drugs from a piece of equipment from raw materials anytime, anywhere. So it's called, the company today is called On Demand Pharmaceuticals. You can look it up. Their equipment is, , the core equipment is about the size of a refrigerator and it sits there with carbon, hydrogen, and oxygen.

And for your friends in the pharma industry, and I know there are a lot of them , in Ireland, obviously there are some APIs and other stuff. Just set that aside. Basically it's sitting there with carbon, hydrogen, and oxygen waiting until a medical professional says, I need a thousand doses of atropine, or I need 300 doses of ciprofloxacin and hours later outcome, 300 doses of ciprofloxacin. Exactly as you would get at the pharmacy.

And by the way, the Food and Drug Administration in the U. S. has already confirmed that the drugs that come out are 100 percent the same as they are at the pharmacy. Now, here's what's mind blowing about this. It transforms the model of what's possible. So, right now, the U. S. government, and I imagine the Irish government does as well, has a stockpile of ciprofloxacin. And by the way, I'm just using Cipro as an example. They can make drugs.

hundreds of different kinds of drugs from this equipment. Now, ciprofloxacin, , has a shelf life. Of three years and so the government has Cipro and stockpile in case of a public health emergency every three years. We have to throw them all out and make millions of new pills. Now think about on demand pharmaceutical solution. What is the shelf life of carbon? That's right. It's not a trick question. The shelf life is forever.

So when you start to do the math, you realize it, there's no comparison at all. , and just to give a really hopeful sign, even since Kaihen and I finished the book, the manuscript for the book in January, On Demand announced their first commercial application. So the U. S. military is already using On Demand a little bit.

In their systems, but on demand has its first commercial implementation in Tupelo, Mississippi, a chronically underserved, low income community, they selected six injectable drugs to start after all it's healthcare. They have to start slow. They have to get it right. So they chose six injectable drugs. And from the point they switched on the system in January to today, this health system. Has had zero stock outs of any of those drugs. And here's the exciting part.

That's the first time in their history. So we can do things today. We could never have done before a last point about healthcare.

This is my second favorite chapter in the book, by the way. My, , as Aiden and I talked about before we started recording, my father died of an aortal aneurysm at the age of 63 back in 2004, and he had just had a complete physical. The doctor said, Bob, you're doing great. Keep up the good work. You're great health. Two months later, he was dead. I imagine in five years, 10 years health monitoring, you know, I'm wearing a Garmin. You might have an Apple watch. There you go. Whatever.

, it's still pretty rudimentary, but what about five years or 10 years from now when we're monitoring every aspect of our list, the lip system, finding weak signals. There's an AI system in the background, analyzing everything. And then it sends you a note. It says, Hey Aiden, looks like there's a problem. Talk to your doctor. And the doctor says, Hey, you've got the stage zero cancer. No big deal. We can fix it. Here's what you do. Compare that to today.

Where you wait until you're doubled over in pain, you go to the doctor that he or she runs diagnostics and they say, Oh, gee, you've got stage four pancreatic cancer. There's nothing we can do about it. So here's the punch line. The exciting part for health care proximity compels. We're not saying it makes it easier. We're not saying it's better. We're saying it compels health care from curing things to preventing things. Because we'll discover problems before they're even a problem.

And there's so many stories of that. And as you said, if you think about the cycles of Moore's law. Apple watch or a garment is in it's in prehistoric times as where it's gonna be in the future what are the utopias envisage is that i take you know we take pills anyway some of us take creatine take whatever digestive enzymes is that you can have just some nanotechnology consistently inside scanning. Giving data. And then that data says, these are the vitamins you're actually deprived.

And these are the ones that can actually make a huge difference to your energy. I also noticed this. I don't know about you guys, but taking vitamins, even something as simple as a B vitamin can have a dramatic impact on your mentality and how you feel your positivity. And you think about how many of us are taking antidepressants, for example, and that it can be circumvented. With no bad side effects by just having the right vitamin intake.

These are the utopian visions I see of this chapter in particular, this is why I love this chapter as well. Kayan, perhaps you you'll riff on that a little bit from the health care perspective, because again, the, the idea of predictive analytics of machine working with human and actually freeing up the human to be more human, to put more care into the other human, to be able to have empathy and actually speak to the other person rather than focusing on the admin side, for example.

Let me not deliver the drugs that you need until I know all the drugs you need. And I'm going to put it into a little packet that says 8am and Monday. These are the three pills you have to take. So we give you what you need when you need it.

Now for decades and decades and decades, it was understood that the way you deliver prescription drugs is You put it into a pharmacy, people come, you then fill up a bottle, they take the bottle home, they try to open it, sometimes they can, sometimes they can't, and then they have to combine it themselves. But instead now the experience is, I just get the drugs I need in a packet, label with when I want to need it. So , there's one guy, second generation pharmacy, he comes up with this idea.

Which is a proximate idea and doesn't require predictive analytics. It doesn't require even software is just a packaging innovation. And he builds the company and sells it to Amazon for a billion dollars after six years, a billion dollars in value creation from taking one small step towards proximity. So, when we talk about these futures, know that this is a direction, but even a small step in that direction can be hugely valuable.

You're talking through the lens of proximity here proximity strategies but i think these proximity strategies are so valuable for any organization that's grappling with change in the business environment you say here that proximity strategy strategies differ from traditional approaches by at least five characteristics and please riff on these maybe expand on them for audience the first is they radically outperformed the status quo from the customers perspective.

Number two they tend to open traditional constraints three they build presence before markets have been clearly defined. Very difficult for a traditional company to do that because where is the return on my investment for the enable adaptation as conditions change. I'm five there designed with ecosystems in mind. These five points are massive when it comes to strategies and so alien for so many organizations.

It doesn't have to be. So what do I mean by that? Um, pick cases, look for cases where You already know what customers are going to want in the future, if they can have it. And then when you have confidence that if humans can have that, they're definitely going to want it. Then what you do is you build a business in the meantime, that can make you some money. You can learn, you can get into the game and positions you to be the winner. Long run. The best example of this, and there are others.

The best example of this is Netflix. So back in the mid nineties. Mark Randolph and Reed Hastings said, you know what we think humans are going to want whatever video anytime, anywhere. Now think about that. You don't need to do research to discover that humans are going to want to watch any video anytime they want to. Do you really need a focus group to figure that out? Of course not. It's definitely going to happen. Now the question in the mid nineties was who's going to be able to do it.

The technology wasn't ready. The bandwidth didn't exist. The content owners. Weren't ready to play ball. So Mark and read, and I don't know read, but I've interviewed Mark a couple of times about this strategic journey. And he confirmed that this was exactly what they were doing. They said, we know this is coming, but we can't do what became called video streaming because the tech isn't good enough yet. So let's get in the game. And that's where DVDs by mail came from. So was it risky?

Sure, it was risky, but there was a business model with a real product and service and dollars behind it. So they were able to build a real profitable business, very profitable that positioned Netflix to be the leader. When streaming eventually rose and it did so with proximity and with digital technologies, there are so many things that we can say, you know what? Humans are going to want that. It's just a matter of being properly positioned to give it to them better than everybody else.

, Kion, share with some of the experiences of, , , maybe one of the exercises that we propose to help people discover their proximity strategy.

What has to happen? Right? The, the, the, the. The, the wheat has to get grown. It has to get picked. It has to get processed. It has to be formed. It has to be shaped. It has to be baked and it has to be provided to you. . How could all of that happen now? So that vision P equals zero next is identify the barriers. There's some barriers that are physical barriers that are physics barriers. Some of their biological barriers. How long does it take for wheat to grow?

For example, where does it grown, et cetera. , and some of them are just industry norms, right? All the farms exist here. , we ship it on this type of thing and it takes this long. , some of our regulatory barriers, we generate all the barriers that stand in the way of the current state to this ideal future state, hypothetical, perfect future state. And then you say, what are the technologies that are available? Proximity technologies or trends that will remove those barriers.

Wake where could 3d printing play a role? Where could. Controlled environment, farming, , agriculture play a role, right? And you can map those two. , you can come up with those and then you map the two. Where is there a technology that can address a barrier? And that gives you a long list of potential innovation opportunities. And then you sort through them and then you identify what the high priority, what are the, what's the easiest, highest impact ideas that we could pursue.

And then, You start moving early on those. , and then you also have a big backlog of innovations that you could be working on. But this is a way to stop you from thinking, gee, one day, you know, when we go to Mars to here's a list of very practical things we can start doing now and a longer list of things that we could have in a pipeline for the future.

, and then as Kaihan said, this helps lead you to a whole bunch of very practical things you can do in the near term.

I'm not yet mature you may get a position on that board or you may get some more knowledge from that because you have to because you've invested in it and you can learn by dancing with startups for example or change their shifted in the environment beyond your own capabilities i think that's one of the things Many organizations miss is the idea of the ecosystem, , so playing with startups and playing , with budding entrepreneurs and backing their early ideas to learn from them

Do I think they have the, the attitude and the skill and the capability to really turn this into something, that sort of thing, but to proximity related. Questions. One is. Are they doing something that's driving the proximity trend? And two, is it something that incumbents in that industry would find very hard to do on their own?

If I look at something and say, yeah, yeah, that's driving proximity, but you know what, if Coca Cola decided to do that, or if IBM decided, I'm going to do that next week. Then I'm less interested, but there are lots of examples of things where could Coca Cola do it if they want it. Sure. But would they probably not, you know, because it's going to be a huge risk. It's going to be a lot of capital, a lot of iteration on stuff. That's not their core.

So, uh, so yeah, venture investing in this environment for an established enterprise is a strategic weapon and companies need to get better at understanding how to do that.

Just sign up to our sub stack where you will be in with a chance to win a copy of proximity also to let you know i am a subscriber to kaihan sub stack it's a brilliant sub stack, and i linked to it from the innovation show sub stack, robin kaihan where is the best place for people to find you to find out more about the book but also find about you guys and indeed rob you mentioned there for example you're venturing that you don't dabble and that you take very seriously,