The leadership in the new digital age carved by the fourth industrial revolution of IoT and AI

© 2016 NTT DOCOMO, INC. All rights reserved. 1

Mick Etoh 12/19/2016

Leadership in the new digital age carved by

the fourth industrial revolution of IoT and AI

All night stars & Galaxy pictures are courtesy of Nori Yuasa except this sunset from Oakland(taken by Lynn Shi)


Head of Innovation Management Dept. SVP, NTT DOCOMO

Guet Professor, Cyber Media Center, Osaka Univ.

Former CEO of NTT DOCOMO Ventures

CEO of Mirai Translate, Inc.

Research Supervisor of CREST “AI” Areaof Japan Science & Technology Agency

Mick Etoh’s Affiliation

© 2016 NTT DOCOMO, INC. All rights reserved.

Part 1


Let’s define and identifyFourth Industrial Revolution.


AI


AI 1st Wave: Search and Reasoning 19561960s

AI 2nd Wave:Knowledge Representation 1980s-1990s

3rd Wave-Present:Machine Learning & Big Data 2010s

Cold Winter AraDeep Learning(2006)

Japanʼs 5the Generation Computer Project

IBM Watson in Jeopardy(2011）

Google AlphaGo（2016）

Computer Vision > Human Vision2015）

The Emergence of “AI”(1956)

Big Data（2010) Industrial Applications

6

AI(Artificial Intelligence)


Japan & MassMedia US & Engineers

© 2016 NTT DOCOMO, INC. All rights reserved. 8http://events.technologyreview.com/video/watch/dileep-george-vicarious-ai-work/

Dileep George,2016


http://redwing-don.jugem.jp/?eid=855

Please attach the candle to the wall and turn on the light.

9

Symbol Grounding　(Stevan Harnad,1990）

Can you image how those should work?


Medical Dignose

Cyber Security HR Management NL Agents10

Active LearningRobotics

Forseen AI Applications in Five Years

http://www.bing.com/images/search?q=facebook+bots&view=detailv2&&id=D41801F555335A37ED99BAE88972F09E144CC935&selectedIndex=0&ccid=Xp2400MH&simid=608008516575300727&thid=OIP.M5e9db8d3430702b3b63de6d9bc3d3c05o0


https://www.youtube.com/watch?v=24Hz9qjTDfwhttps://www.youtube.com/watch?v=24Hz9qjTDfw

https://www.youtube.com/watch?v=24Hz9qjTDfw


https://www.youtube.com/watch?v=w7NgejZMSsA


Orbital Insight, Inc. Proprietary Information

BuildingHeight OilTankFarms AgAreasandYield TractHousing

Clouds&Haze Development AirplanesWater

ORBIRAL INSIGHTSCourtesy:

© 2016 NTT DOCOMO, INC. All rights reserved. 14Orbital Insight, Inc. Proprietary Information

NanjingPyongyang

Courtesy:


Blue River


Blue River

https://www.youtube.com/watch?v=yCPe9Sy0TFY


Uber

© 2016 NTT DOCOMO, INC. All rights reserved. 18https://www.youtube.com/watch?v=U9A86Nh75xQ



The Power of 1%


McKinsey Global Institute The Internet of Things: Mapping the Value beyond the Hype (June 2015)

Peomising?

21



http://seekingalpha.com/article/3387605-assessing-ges-software-opportunity?page=2


https://www.youtube.com/watch?v=QUpHVuXEYA0


IoT = ICT + OT (Operational Technology)

Revolutional Impact:　ICT+OT＋AI


the fourth industrial revolution

ICT+OT+AI


Cloud


Hardware v.s. Software

��

Which is your perception about “Cloud?”


Simple Web Service

Speech Agent（Cloud-native）

Programmable, Copyable and Commodifiable

29

Data Analytics Platform（On premise-hybrid）


Early 21st CenturyMid 15th Century


=

31

Power of Software


layers of the full stack

Server, Network, and Hosting Environment.Data ModelingBusiness LogicAPI layer / Action Layer / MVC

User InterfaceUser ExperienceUnderstanding what the customer and the business need.


Startups


Empathysmart risk taking

Seeing the big picture.Hunger to achieve.

Entrepreneurs 0->1

MAXIMIZES STAFF UTILIZATION PURSUES THE FINANCIAL PERFORMANCE

Managers Elite 100->110


• Want to increase innovation?

• Lower the cost of failure.


AWS Re:Invent 201436

Keywords•Institution No vs. Individual Yes.

•Speed•Make organization “nimble”•Experimental test w/ lowering the cost

© 2016 NTT DOCOMO, INC. All rights reserved. Bloomberg BETA(VC)によるトレンド分析資料・2016向けより抜粋※Pitchbook調査に基づく 37


Capital SIze

Growth Stage

Incubators

Micro VC

Venture CapitalSuper Angel

$50K – $200Ke.g., Ron Conway

Keith Rabois Reid Hoffman

$1M – $10MAccel Partners

Benchmark Capital Sequoia Capital

　　

$100K – $500K SoftTech、SV Angel

$10K – $100Ke.g.,：500 Startups 　　　Y Combinator　　　Plug & Play

38

Startups and Financial Supporters


1B Valuation

Years from Birth

1 2 3 4 5 6

AirBnBSeries C(3Y8M)

EvernoteSeries D

$1B (6Y2M)

Series B

Series A Series A

Series A

Series B

Series C4Y7M

AirBnBDropbox

Evernote

Examples Y Combinator Graduates

39


Top Venture Capital


Hustler Hacker Designer

41

Innovator Trinity

I




DOCOMO Innovation Village


Airbnb


– National Innovation Initiative(NII) (2004)

Innovation = invention x insight, leading to the creation of social and economic value


Two Type of Insights:

Technology Social & Biz Value


–Prof. Henry Chesbrough

Innovation = Invention + Business Model


Mark ZuckerbergJack Dorsey Elon Musk

Garrett Camp

Travis Lalanick

Drew Houston Jeff Lawson Marc Andreessen49

Empathy- and Greed-driven.


TechnologyInsights

Leadership

BusinessInsights

What we need is ‘Unicorn’.


Tech. Startup = Team with Research Expertise + Business Insight


Insights about the future → Monopoly position

Here are the seven questions Thiel writes “Every business must answer:"

1. Can you create breakthrough technology instead of incremental improvements?

2. Is now the right time to start your particular business?

3. Are you starting with a big share of a small market?

4. Do you have the right team?

5. Do you have a way to not just create but deliver your product?

6. Will your market position be defensible 10 and 20 years into the future?

7. Have you identified a unique opportunity that others don’t see?

Zero to One by Peter Thiel (Founder of PayPal)


problemsidenFficaFon

businessoperaFon

conceptualizaFon

businessmodeldevelopment

53


https://www.tuzzit.com/public/media/canevas/canvas_lean.png

1 1

2

3

4

55

6

7


Business Insights must exist everywhere.


Let’s think about

your customer, and their pain points, and how you can help them.


Part 2


team building&

Culture

© 2016 NTT DOCOMO, INC. All rights reserved. 59www.bonkersworld.net/organizational-charts/

Organizational Charts (6/2011)


For outer apperance in reality

AWS

EC2 RDS S3

VPC EMR DynamoDB

… … …

Micro Services

© 2016 NTT DOCOMO, INC. All rights reserved. 61https://vimeo.com/85490944

© 2016 NTT DOCOMO, INC. All rights reserved. 62https://labs.spotify.com/2014/03/27/spotify-engineering-culture-part-1/

Spotify’s History of Development Style


　Companies led by Captains or Majors

　Brigate　Division Squad LeadersBeing Automous


Learn

Data

Nimble Investment Decision

Flexible Budget Raise

Advisors

Voice of Customers

build

Product

Idea

measure

64

Agile Development

Lean Startup Model


Importance of Team Building

• Most of predetermined plan may fail. Thus, nimble and well-focused team building must come first.

• The team must identify ROLES which make team well-focused and nimble.

• Big managers must trust the team, encourage them, and dedicate the power to them. DON’T be a control freak.


Innovation Ecosystem


50 : 5 : 1

US Annual financing to VC-backed companies(start-ups) = $57 and $72B in 2014 and 2015 while Japanese VC’s financing still remained about $1B(2015).


Global Comparison of VC Investments vs GDP by Country

・Looking at global investments by country, Japan ranks near the top. However, with a 0.02% ratio of investment to GDP, the difference is significant to that of the US, and low when compared globally to other developed countries ・Israel leads by a marked lead with a 0.18% ratio of GDP to total investments

Source: Ministry of Internal Affairs and Communications “Research Study Regarding the Global Strategy of ICT Industry”, 2013 OECD Science Technology and Industry Score Board / Venture Capital Investment Trends

In Million of US$

Amount of VC investment

Amount of VC investment ratio to GDP

US France

UK Germany

Japan A

ustralia

Canada

Switzerland

Sweden

Israel

Belgium

South Korea

Norway

Holland

Spain

Denmark

Finland

Ireland

Austria

Italia

Portugal

Czech Republic

Greek

Estonia

Luxembourg

Slovakia

Poland

Hungary

VC Investments by Country


Innovation Ecosystem in EU

International Journal of Technology Management vol. 66, num. 2/3

key individuals are in blue, companies in red and financial firms in green.


Can Tokyo become Japan’s Silicon Valley?


Startups in Tokyo has two options:

•Come to the Bay Area, or

•Stay in Tokyo but focus the unique product.

No.


Market VCEcosystem

Talent

Source:2016 Silicon Valley Index

Interlock of investment, talent, and market creates an unsurmountable barrier for others.

© 2016 NTT DOCOMO, INC. All rights reserved. 73https://www.cbinsights.com/blog/increasingly-crowded-unicorn-club/

The Crowded Unicorn($1B+) Club (as of August, 2016)

171

© 2016 NTT DOCOMO, INC. All rights reserved. 74Source: SparkLabs Global Ventures

1. Funding & Exits2. Engineering Talent3. Active Mentoring4. Tech Infrastructure5. Startup Culture6. Legal & Policy Infrastructure7. Economic Foundation8. Government Policy & Program

Start-up/VC Ecosystem


6. Boston7. LA

8. Beijing9. London10. Berlin

Source: SparkLabs Global Ventures

1. Silicon Valley

2. Stockholm

3. Tel Aviv

4. NY

5. Seoul

10 Hottest start-up Ecosystem


India China Japan Israel Bay AreaMarket size ○ ◎ × × ◎

Language ○ △ × △ ◎

Regulation/ Market fairness △ △ △ △ ○

Excellence or Uniqueness of

Talent○ ○ △ ○ ○

Life/Weather* × × △ △？ ◎

Overall △ △ × △ ◎

*Don’t laugh. It DOES matter.

India and China receive large amounts of VC money due to their market size. However, there are only a few

companies in those countries that succeed globally.

Which countries are best for startups?Can Tokyo become Japan’s Silicon Valley?


Startup NationAdvantage

Strong relationship to Military and Defense Industry (AI, Communication, Security, Devices) Famous Startups

Waze, Viber, FiverrVC circumstances

20-30 VCs, 4000-5000 startups, 6B exit in 2015,　Chinese-backed VCs(40%?)


London as Gateway

AdvantageLondon as Gateway to EU and US，Fin Tech demandsFamous StartupsShazam, Powa, SkyscannerVC circumstances>1000 Fin Tech companies with GBP20B size revenue3200-5400 start ups in UKTech City in London


The Nordic countries

AdvantageSocial Demands by Low Carbon, Medical Care, Digital Government. Famous StartupsSpotify, SupercellVC circumstances

Stockholm Innovation & Growth(STING), Governmental Agency for Innovation Systems - VINNOVA


Tokyo & JapanAdvantage

Animation, Media Contents(e.g., PockemonGo), Gaming, Bio & DevicesFamous StartupsGumi, Mercari, Cyberdyne, EuglenaVC circumstancesRising CVC money into AI, IoT, Robotics, etc. $1B (2015) -> $1.6B (2016)


Gaming/Net Media

Biotechnology, Device

Japanʼs Strength


Way Forward


Talent

Market VCEcosystem

Innovation Engine of Bay Area


Manufacturing

Market ProductionEcosystem

suggested by H.Tamura@Re:Public

Innovation Engine of China


Shenzhen Tianjinsuggested by H.Tamura@Re:Public


Society

Citizen Experimentssuggested by H.Tamura@Re:Public

Innovation Engine of the Nordic Countries


credit to H.Tamura@Re:Public

IKEA@Denmark


Hungry

Drought Resilience

Innovation Engine of Israel(Joking Version)


Skill

Urban Infra-structure

QualityConsciousMarket

Innovation Engine of Tokyo

© 2016 NTT DOCOMO, INC. All rights reserved. 90https://www.youtube.com/watch?v=VgSPGB_q7tg

© 2016 NTT DOCOMO, INC. All rights reserved. 91https://www.youtube.com/watch?v=FVAkuBSkaw0

© 2016 NTT DOCOMO, INC. All rights reserved. 92• http://www.scootman.bike/

• https://39meister.jp/selection/selection005/

Let’s take your time to consider your coutory’sinnovation engines.

Less spent on essentials, more for “luxuries” or “unique ones”

http://www.scootman.bike/

http://www.scootman.bike/

http://www.blincam.co/


ChotoKool Fridgehttps://www.changemakers.com/health-on-the-ground/entries/safe-and-affordable-drinking-water-everyone-everywhere

water purifier

Frugal Innovations

Mobile Banking


Innovationsare not only from high-techengineering.


Take Aways

• The Fourth Industrial Revolution = ICT+OT+AI • Startups: Innovation Driver • Innovations = Invention + Business Model • Successful Startups = Tech Insights +

Business Insights + Leadership • Autonomous Organization • Unique Innovation Engines in Each Region

All night stars & Galaxy pictures are courtesy to Nori Yuasa
