The Innovation Show
Rob C. Wolcott and Kaihan Krippendorff - The Proximity Revolution
The Proximity Revolution: Transforming Industries and Daily Life In this episode, we delve into the proximity revolution with authors Rob C. Wolcott and Kaihan Krippendorff. The discussion centers on how digital technologies are expediting the production and delivery of customized products, services, and experiences, vastly transforming industries from agriculture to healthcare. The concept of 'proximity' shows promise in improving sustainability, optimizing supply chains, and enhancing customer personalization through innovations like vertical farming and on-demand 3D printing. The conversation also explores the strategic implications of this shift for businesses, highlighting the importance of visionary thinking and practical applications. Tune in to discover how proximity is poised to reshape our world and what leaders can do to navigate these changes effectively. 00:00 Introduction to the Proximity Revolution 01:02 Meet the Authors: Rob C. Wolcott and Kaihan Krippendorff 02:25 Defining Proximity: Anything, Anywhere, Anytime 03:28 Real-World Examples: Coca Cola Freestyle and Vertical Farms 06:09 Proximity in Agriculture: From Dubai to Your Dinner Table 09:52 The Role of Technology in Proximity 11:15 Proximity in Food Supply Chains: Efficiency and Sustainability 12:50 Innovative Solutions: Haier's Peking Duck Challenge 16:34 Moment of Use and Controlled Environment Agriculture 22:54 Case Study: Interstellar Lab and Growing Food on Mars 26:38 Why Proximity? The Drivers Behind the Trend 27:00 The Shift in Global Conditions and Technology 28:04 The Rise of Small Footprint Production 28:42 Digital Proximity and Generative AI 29:28 Geopolitical and Climate Drivers 30:16 The Digital Customer and Predictive Analytics 30:53 Domino's Pizza: A Case Study in Proximity 33:26 Healthcare Revolution: Medicines on Demand 34:52 On Demand Pharmaceuticals: A Game Changer 37:37 Future of Healthcare: Predictive Monitoring 42:53 Proximity Strategies for Businesses 49:01 Investing in Proximity Innovations 51:09 Conclusion and Where to Find More 52:09 Bonus Episode on Proximity in Action with Dr Ian McCabe
- Duration:
- 1h 1m
- Broadcast on:
- 03 Jul 2024
- Audio Format:
- mp3
What if you could have whatever you want produced and provided immediately and affordably no matter how customized with minimal environmental impact, products, services and experiences on demand, just in time, anything, anytime, anywhere. This radical change is already underway as digital technologies push the production and provision of value ever closer to the moment of demand. Today's guests 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. Walcott and friend of the Innovation Show and regular guests. The endorsements are just absolutely stellar for your book and the preface written by Professor Emeritus of Marketing at the Kellogg School of Management, Philip Kuller 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 makes 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 awaits. What a brilliant, brilliant endorsement by him, but it also opens the question, what is Proximity? Thanks, Aidan, for having us, and thanks for quoting Professor Kotler, he's been a huge presence in my life, a mentor to many throughout his long career. We were so pleased when he agreed to write this preface. 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 how we think this might happen. The book is not, we think you should try this because it'd be better. Instead, what Kyan 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. A nice way to think of that is talking about waiting for the last minute. Often you create value when you combine thing, right? 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 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 plan 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. The idea of proximity for me made sense that it's like the Everling store virtually, but it's only created on demand when you need it. And there was a couple of little excerpts from the book that really helped me understand this. You said in Singapore to buy Brooklyn and beyond vertical farms are literally rising, bringing fresh food ever closer to consumers. Meanwhile, rooftop solar energy generation blurs the line between power producers and consumers. Software literally enables resilient local microgrids with 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 teeth. 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 or 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 get anywhere you like. Well, quickly, the good news, Aiden, is the global rugby board already has a solution, which is as soon as a kid signs up for rugby, they just break all of his teeth. And I don't think we'll do the bones whatever. Get it done. I wait, I wait. So there are so many examples in the book. I mean, I'll just start with agriculture because 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. So I visited there in December of 2022 doing research for the book. And first of all, the leafy greens are as good as any farmers market. But the more exciting thing, Aiden, 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 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% 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. They pick it a few miles from the airport. They put it in my salad 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. Wow. Talk about foresight and reinventing yourself as an organization. I know that's a lot of the work that both of you guys do. I was thinking about that, the idea of the proximity of food and beyond the fact that there's the logistics and the supply chain, resilience and the air miles that you add on to food, all that kind of stuff. I was thinking about something as a child, I grew up in a very small village in Ireland. And we had a field, we had green fields all around us. We grew potatoes and carrots and broccoli and carriages and stuff like that. And at dinner time, 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, it's still alive, it's still full of nutrients. And that's one of the other things 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. Yeah, that's right. I mean, the tomato that you didn't pick because you don't need it right now is still growing. The tomato that you didn't get from the grocery store because you don't need it is rotting. So you have the reduction in food shortages. And then you're also right, the non-proximate food model, where we have big farms sensually producing, as you say, one type of potato. That's risky. And so we need greater biodiversity. And so this model can afford that, 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 the proximate world, but thanks to technology, we can do it in a more advanced way. Sticking with the picture of agriculture, which is obviously important to all of us, I think most of your listeners probably eat, so I'm guessing. But one of the things that's exciting to Kion 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 mentioned the story of you as a small child going out and picking the carrot, 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. You can say that distributed energy is a fundamental enabler of proximity, because we need to be able to power these small factories and small farms that are closer to the point of demand. And then we have distributed other distributed models, distributed data models like blockchain, distributed computing, edge computing, those also enable it. On addition to that, there are three big drivers that are increasing the payoff for companies or entrepreneurs or innovators that are pursuing it. Number one is changes in the cost of sustainability, externalities of the company, internalities, in part due to regulations that are being introduced that are forcing companies to not 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 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. One of the great stories you share in the chapter on food, and I'm skipping ahead here because I want to come back to talk about why proximity, why now. That's a big question, but let's finish food because the guys introduced the concept of proximity, the lens of proximity, and then look at all these major shifts where proximity is taking place 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 hire with the peaking duck challenge because this unravels some of the challenges that we can solve with proximity and using different technologies like IOT, for example. Peaking duck is delicious and is very hard to make, which is why the way that you get it is you walk out of your house, you walk down your stairs and you get in a car and you go to a restaurant and it's cooked there, not in great proximity to your home. Now what happens is COVID hits and now people can't get out of their homes and restaurants aren't open and they want peaking ducks. So how do we bring peaking duck in greater proximity to where people are, given that they're not leaving their apartment. And so this company hire, they make appliances and they've got smart appliances. And they said, okay, what does it take to deliver the experience of a peaking duck at your home quickly. And they created this ecosystem of partners. They've got farms 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 a peaking 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 peaking duck. And so like two things to mention that one is COVID forced us to advance proximity is kind of where we're headed, but it forced us into proximity and we realize, wait a second, this actually can work. So advanced despite several years, right? And the second thing I would say is the proximity is enabled by the ability of these compliments to coordinate with each other to create more immediate experiences. And just to emphasize the example that Kion just shared higher the Chinese company higher already had been playing around with the idea of maybe automating their automated ovens could make peaking duck, but they weren't that serious. And then COVID happened to catalyze them. And here's the exciting point from the point that higher said, you know what, we're going to do this, which was at the very beginning of 2020. 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. And as you say, we're possibly going to see the streaming service of recipes in the future where actually you'll just be able to download these recipes. You'll have the connected oven or connective appliance to be able to execute the recipe of choice for you so you can be your own Julia Childs at home as well. There's three different trends that you talk about, and I'd love you to share. 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, etc. 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 what Kihan 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. I'll start with moment of use. That's a concept that Kihan and I invented for this book. And there are examples already out in the world. So, any 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. Most of your listeners, I'm sure, are aware of or maybe have even used 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 stone wash effects, ripped jeans effects, any kind of stylistic effect you want. And instead of taking 5 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 it 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 stone wash. 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, Aidan, 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 Aidan'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 does not happen that that is not happening. Kaya, and you mentioned earlier on the idea of transparency and predictability, including things like blockchain that we know of, this becomes part of the change that we're seeing now with the access to data even that is happening in the agricultural shift. Yeah, I think that a lot of this 38% of food that gets wasted is due to inefficiency or a lack of predictability in the supply chain. We have very long supply chains, as that gets as controlled environment, controlled environment, agriculture becomes more adopted. Supply chains get shorter, but still there is massive inefficiency. You pick something you put on a truck, the truck pulls up at a grocery store the grocery store doesn't know you're coming. 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 of 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 into the 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 due 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 AFresh Technologies. They developed a kind of a software 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. Just before Rob maybe might cover controlled environments, agriculture. One of the things, again, this was really important. I said this to my kids and my wife at home, I was quoting bits of the book. They get sick and tired of me. Apart from printing them on my jeans, Rob is like probably still feeling like, "Oh no, here he goes again." So one of the things I was telling them, 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 38% is 40%. 40%. So for a variety of reasons, we predict badly what's going to happen at home, that maybe the kids are away or whatever. So it even happens at such a local level. But one of the things you talked about, and Rob I know you're an investor in many companies, is that I can take a mix of food waste. 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 finish it just like the Levi Strive 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 where it just makes people think differently about the future of food. Let's put two concepts together here. One is moment of use, and the other is controlled environment agriculture. So just to be clear, we didn't invent CEA. That's been around for a long time. It's the whole industry where you can think greenhouses. But everywhere from a traditional greenhouse, all the way to pretty cutting edge technology, where you grow certain things in controlled environments. Now, just to show you how cutting edge this can be, and we really do mean space age. So in 2018, I got a call from a very good friend of mine, a French plant scientist and entrepreneur venture capitalist, 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, "Teaches 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 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 inputs? Well, farm and 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 size 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 Robert Cutt, 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 plant. 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 a Vethieve. Vethieve 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, Vethieve grows inside these pods. The yield in these pods is over 1000% 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 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, in the plant agriculture space, but moment of use production broadly across all industries. So let's come back to something I planted the seed for earlier on. 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? Are we not capable of doing it before? What's changed? Well, first of all, Aiden, we've always wanted. Humans have always wanted what they want, where and when they want it, 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 why now, with respect to proximity? Well, two things. Number one, global conditions are changing, and Kihan can extrapolate a little bit on geopolitics and climate and things like this. But 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, Aidan, what Kihan 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 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. 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. Kyan, you talk a lot about the geopolitical and the climate aspects having us toward proximate. Yeah, I think the geopolitical aspects, the incorporation of climate change costs into companies is driving them. We work a lot with chief strategy officers and that's something that's on their mind. Whereas before it was sort of, oh, this would be nice to have, let's put up this vertical farm and source and maybe to give us some good PR. Maybe it'll help us recruit some customers or employees. 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, it costs, we need to start doing this now. So there's actually an economic of weekly viable reason. Also, if we look, customers are becoming digital customers. It used to be we 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, analyzed 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 products. So one of the cases that we have in the book is Domino's Pizza. They don't digitally deliver their pizza, but they digitally deliver part of the value proposition, which is the information that your pizza is being made, that's been quality checked, that's been delivered. That part is getting delivered faster by enabling them to deliver that part of their value proposition faster. So we 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, it was real, the cents were rapidly delivered digital products were rapidly, but now with 3D printing and robotics, now the physical products and the physical aspects of projects getting in the game. You are able to have a machine that one day produces a cup cup cap, 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 that deliver those value propositions. So it is like a virtuous cycle. That's why now. And I want to underscore something from the dominoes example that Kyan just shared. It shows that a big part of conquering this proximity opportunity is continuing to go back to the value your customers get from buying your product service or experience. Not the product itself, but the value, because it's not always obvious, we think we know what they want. And if you think about that dominoes example, are they working on trying to create better pizzas well maybe I mean arguably no offense to the dominoes throughout 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're 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 proposition that nobody else was serving before dominoes started doing that and digital technologies allow us to discover and serve new kinds of value propositions. I don't think dominoes will ever be sponsored the show rub so it's cool and by the way I think they're taking all that that 40% of waste and proving the pizzas and have them and telling us for years. I don't think that way and definitely anytime I'm talking about a dominoes pizza I've had the indigestion to actually prove that as well. Let's let's let's go backwards so speaking indigestion it's a nice segue for medicines on demand anywhere. So we've covered food with covert agriculture. I thought we'd cover as a last piece today and hopefully we'll do a part two because there's so much more in the book is for anybody out there working in health care. The health care revolution is about to change in a massive massive way and one of the scenarios just like the peaking dog that you pose 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 16's 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. Well thanks for that. The example you're pointing to Aidan is one of our heroes Dr. Jeffrey Ling he's a retired army doctor. He practices medicine that Johns Hopkins now and he was in six tours of duty in the Middle East. And then during that experience they kept running out of generic drugs and it's not a shock that you'd run out of generic drugs in a war zone but what is shocking to me I didn't know this until he shared this with me 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 work 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 1000 doses of atropine or I need three hundred doses of and hours later outcome 300 doses of siprofloxid exactly as you would get at the pharmacy. And by the way the Food and Drug Administration US has already confirmed that the drugs that come out are 100% the same as they are at the pharmacy. Now here's what's mind blowing about this transforms the model of what's possible. So right now the US government I imagine the Irish government does as well has a stockpile of siprofloxin and by the way I'm just using sipro as an example that can make hundreds of different kinds of drugs from this quick. Now siprofloxin has a shelf life of three years and so the government has sipro and stockpile in case of the 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 Keihan and I finished the book, the manuscript for the book in January on demand announced their first commercial application so the US 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 dog drugs to start after all his health care 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 health care 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 aortyl 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 your great health two months later he was dead. I imagine in five years 10 years health monitoring you know I'm wearing a garment 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 that lives system finding weeks signal. There's an AI system in the background analyzing everything and then it sends you notes says hey Aiden looks like there's a problem talk to your doctor and the doctor says hey you've got this 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 punchline the exciting part for health care proximity compels. We're not saying it makes it easier or 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. I love that man and you know again I was saying to my condolences for your dad but there's so many stories of that. There's a guy regular listen to the show Greg you know I'm talking about I wear a garment as well he wore an apple watch and he said the apple watch actually saved his life because it told him that he had some type of arrhythmia. And he's only in his he's not even forty and he got went to the doctor they put a stent in and actually saved his life because of the apple watch. And there's so many stories of that and as you said if you think about the cycles of Moore's law and apple watcher garment is in it's in prehistoric times as where it's going to be in the future. One of the utopias I envisages that I take you know we take pills anyway some of us take great teens most 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 in these are the ones that can actually make a huge difference to your energy. And also notice 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 but just having the right vitamin intake. The utopian visions I see of this chapter particularly this is why I love this chapter as well. Kyan perhaps you'll riff on that a little bit from the health care perspective because again, 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. If you don't mind I'll bring us first as a more immediate step towards that future because sometimes when we talk about this stuff people think. Oh, one day in the future that will be someone who can afford to invest and wait 10 years, but even a small step in proximity and health care can make a huge difference there's a company in the United States called pill pack. And you can say their whole innovation was just this 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 ADM 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 what I want to need it what when he so there's one guy second generation pharmacy he comes up with this idea, which is approximate 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. When we talk about these futures know that this is a direction, but even a small step in that direction can be hugely valuable. I just figure out that you and I should have rather than spending all this time to write the stupid book we should have started packing pills packing pills yeah. I was thinking the same thing about it. I wanted to bring it to innovation and there is a piece where you say what's different from the past and I think you're talking through the lens of proximity here proximity strategies. 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 our audience. One is they radically outperform 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 of my investment. Four, they enable adaptation as conditions change and five, they're designed with ecosystems in mind. Five points are massive when it comes to strategies and so alien for so many organizations. I want to pick on one comment you made about positioning before a market rises that that's high risk. It doesn't have to be and then I'm going to turn it over to Kaihan because he and I have built this proximity strategy workbook, the appendix of the book where you can go through some exercises. And Kaihan's been implementing these with some of his clients in the outthinker network and elsewhere. But I want to pick on this notion of it's higher risk. It doesn't have to be. So what do I mean by that? 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 90s, 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 90s 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 Reed, and I don't know Reed, 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. Kian, share with some of the experiences of maybe one of the exercises that we proposed to help people discover their proximity strategy. Recognizing that it doesn't have to be risky and that there could be near-term moves that you can make that will be immediately valuable, it is worth starting right now to do this. And we found four steps that are really helpful. Step one is what we call Envision P=0. This is a hypothetical moment in your industry when need arises and you are already there with the solution creating the solution then. Let's take food, right? Hunger arises and you want a cracker, right? What has to happen, right? 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 that happen now? So that vision P=0. Next is identify the barriers. Now 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 grow, etc. 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 them are 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 to 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. Wake, 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 with a high priority, 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 even a pipeline for the future. Yeah, and it's critical for business leaders, clearly to have practical things they can do in the near to medium term future. But it's also critical that they spend some time thinking far out about the crazy future, not because they're going to waste a bunch of time and money on it, of course not. But having better foresight is spending a little bit more time thinking about the further future. And then as Kyhan said, this helps lead you to a whole bunch of very practical things you can do in the near term. And Rob, bring a full circle to your work as an investor as well as that, you know, when you dabble in investing in some of these, call them Horizon 3 technologies that are far away, and they're 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 chains are 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. Absolutely. Well, and I take some with the notion that I'm dabbling in my wife hopes that I'm not just dabbling. But over the past decade, we've built a portfolio of now over 30 companies, most not all, but most of whom, most of which are leading the proximity revolution. And one of the things I look for when I'm looking at potential early stage investments is the two criteria, the obvious criteria that everybody looks for, like, do I trust the team? Do I think they have the attitude and the skill and the capability to really turn this into something? That sort of thing. But two 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, not a big deal. Then I'm less interested. But there are lots of examples of things where could Coca-Cola do it if they wanted? Sure. But would they? Probably not, you know, because it's going to be a huge risk, going to be a lot of capital, a lot of iteration on stuff that's not their core. So, 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. Before I finish, I just want to tell our audience, I have a copy of the brilliant proximity, over grabs, 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 Kihan sub stack. It's a brilliant sub stack, and I link to it from the innovation show sub stack. Robin Kihan, 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 double, and that you take very seriously. So, the book you can find at proximitybook.net, proximitybook.net, or Amazon, anywhere, find books are sold. Myself, I'm always on LinkedIn, Robert C. Walcott, and at twinglobal.org. I think the best way to reach me is on LinkedIn, and look forward to connecting with you there. Authors of proximity, Rob C. Walcott, and Kihan Crippenorff, thank you for joining us. Thank you. Thank you. Thank you. Centuries ago, a glacier sliced off a piece of Ireland. I'm standing on that piece of Ireland. Player Ireland. With a population of 150 people, three miles off the coast of Ireland, it is a place where budding technology has taken off. I was inspired to do this episode of the Innovation Show. I'm here in Player Ireland as part of a remit as one of the directors of National Broadband Ireland, where we roll out broadband to the remotest parts of Ireland. And I've just recorded an episode of the Innovation Show called Proximity, with Kihan Crippenorff and Rob C. Walcott, where we talked about the moment of demand coming closer to the moment of supply. What does that mean in medicine, for example? It means that in remote areas, such as Player Ireland, I can possibly 3D print medicine at the exact moment of that demand. I want to talk to an entrepreneur, a doctor here on the island, who's looking to close that gap, starting with the technology available today. He has broad proximity to Player Ireland. In 1983, two things happened on Player Ireland. The first was electricity came to the island, and for those people who have been listening to the Innovation Show, you're sick of hearing about the fusion of innovations, that concept that it takes a bell curve to eventually bring a new technology, and there's always these laggards at the end of the bell curve. That wasn't the case on Player Ireland. On Player Ireland, people demanded electricity because they needed it. The second thing that happened in 1983 is today's guest was born. Welcome to the show, Ian McCabe. Thank you very much. You're very welcome to Player Ireland. We have a long history of welcoming people in with good intentions. Absolutely, and Ian's family, seven of them here on the island as well. Spanning from Rory, the eldest to Laura, the youngest, we all are bound by this place. It has that way about us to bring people home. That happened to me, went away for a long time, went to the U.S. for my studies in my college, and then came home, and was lucky enough to be here. One of the things you're bringing to the island, I wanted to tie this together because I love the serendipity that happens on the Innovation Show. I've just done a show with Rob C. Walcott and Kai and Crippendorf on a book called Proximity. One of the things we talked about in Proximity for those who haven't heard it was the idea of bringing the moment of demand right together to the moment of supply. So there's no waste, and one of the things we talked about on the Innovation Show was the idea of 3D-printed medicine. So if you remember, F16 fighter jets had to drop off medicine to remote parts to armies, for example, in war-torn areas. Well, Ian is plugging the gap between the future that we talked about of 3D-printed medicine under the moment of demand to where we are today with technology. I'd love you to share the story of what you're doing here on Fair Island. So here on Fair Island, I've been working as a member of the School of Medicine in the University of Galway, and our research group is the Hive Lab, and what that stands for is health innovation by engineering. And at its simplest term, it's about finding technology and finding a problem, trying to put the two together to help people. For the past two years, we've been doing a research project on Clare Island, which is called the Home Health Project. And we're not taking the most cutting edge technology, we're taking commonplace technology, but putting it to a new use. So we're bringing in telemedicine and trialing a number of different approaches to telemedicine with the island population. So we've done things like remote monitoring, virtual consultations, long duration video calls to help combat loneliness, a variety of different things, all with the aim of seeing how this stuff has become commonplace, video conferencing call. We do it every day, how it can be brought into healthcare, and brought it in in a way that can affect immediate change, not the potential change in the future, but doing it right now. One of the things we talked about on that episode was this concept that Rob and Tyanne calls proximity, so it's this idea of bringing things together. And I thought it was so interesting, some of the applications, because when people see broadband being rolled out, they think about, "Yeah, that's great, I can now have connectivity, perhaps I can do remote working." But proximity can save lives, and this is one of the things you're bringing to Clare Island. One of the things is that something that a lot of people take for granted now is actually smart watches fitness trackers, and you have 80% of the island now wearing Fitbit. That's right. So you talked about the proximity, and part of the problem is there's 150 people, and there's three miles of the ocean between us, and not just the mainland, but also our doctor. So we do try and use technology to bridge that gap. And the simplest thing we've done, which is perhaps one of the things that has bound us together the most, is bringing the Fitbit, and give everybody a step goal. So we had 80% of the people, which is 80% of the adult population on the island wearing our Fitbit for the past year, and we've tracked 30 million steps on this island in the past six months, and provided individual goals to everyone. And it's all about raising their own awareness, but also giving them the kind of the comfortable relationship with technology that they need to build. You had Dr. Noring with us last night. Noring is over on Echo Island. So she can't be here at the moment of need that we talked about, that moment of use that's needed. So she needs access to uploads of content. She needs to have perhaps an injury uploaded to the cloud, et cetera. This is the idea of this proximity that she needs to be able to see this to know, is she needed? Does she need to send a helicopter to bring people to the hospital, et cetera? Because that can be triaging somebody that doesn't need to go to the hospital because that's a pretty ominous journey to go over the mainland, that somebody may not want to go for something that's quite a routine visit. Yeah, absolutely. You know, you can't ask there are medical people to take a risk with somebody's life. But what we can try and do is give them more information to make better decisions. So part of our project is to provide some tools to help do that diagnosis better and to build out the connectivity because the connectivity is the key piece. You know, we can do it on our phones. We can send a picture and we can describe something with words, but not if we can't communicate. So we've been trying to build on the connectivity we have to help people like Dr. Norin to, you know, have a better understanding of what's going on. So when the call needs to be made, if it is a call to say, call the helicopter or, you know, let's wait it out and see what happens in 12 hours, she can do that with more information. And like I said, it's simple stuff, but it's really impactful. One of the last things I wanted to share was a few years ago now we had Dr. Robin Dunbar on the show. And he's the guy who's famous for Dunbar's number of 150 people. We went down to rabbit hole talking about that earlier on. But one of the things he talked about in his book Friends is the importance of connectivity because we're social animals as human beings. We need connectivity, whether we want to admit that or not. We hide that behind and particularly in places like Ireland, behind the bar, drinking a little bit too much. So we don't have to get too deep and share our emotions because we have a loneliness epidemic. And this surprises a lot of people about Ireland, but we have that and you've uncovered that even here on the island. Yeah, loneliness in Ireland, the worst country in Europe for loneliness, unreal. And loneliness just compounds everything that is wrong with the person, makes their blood pressure worse, it makes their arthritis more painful. It makes everything worse. And we have the technology now that we can try and do little things. So that is something we did. And we're really lucky to partner with Cisco and thanks to Brian Jordan and Cisco in particular for your support in this project. We've done this. We put a screen in a person's home and a screen in a family member's home of that person. And they just turn on automatically and the two screens connect and it's just on for hours every day. And, you know, they get juice to it. And it feels like the person is in the room with them. And they can have conversations. Not like you pick up the phone and you have, you know, a conversation and you say, I'm meant to ask them something halfway. It's casual, it's constant interaction. And so we'd like to pursue that for, you know, larger scale. We'd like to do all this stuff on a larger scale and start building up these solutions for this new digital Ireland that's coming within the National Broadband Plan. It's going to be fascinating to see how this all pans out. I'm going to be an avid supporter and help in any way I can, which is why we're doing this as well. I hope many people out there reach out, find out more about your work and how you're going to make this into a prototype island for the future of Telly Alt. Dr. Ian Lecabe, thanks for joining us. Thanks for having me.