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TI: But if we now kind of fast-forward to four years ago, and I'm thinking, do these same principles, you said it applies to today's startups, but I think of a lot of the startups today as almost black box engineering. I mean, they have the benefit of a system already in place that they're plugging their black box into and hopefully making a lot of money again. Or is it the same?

SA: Well, there's both. Because if you look at Microsoft, that was a black box, a software box of innovation. If you look at Oracle at the beginning, it was creating a database system. So in a sense, you can call it a black box. If you look at Google and how Google started, Google was a system oriented innovation. If you look at Facebook, it's a system oriented innovation. It's developing an entire operations concept in the commercial world. So when you think about a search system, a search system is an operational concept that allows people to get smart instantaneously. Facebook is a system operation that allows people to network instantaneously with photographs and conversation.

TI: And Amazon is a system.

SA: Amazon is a system innovation, it's replacing brick and mortar stores. So those are all systems, and so basically there's really two levels of innovation: one is the technology level and the other one is at the system level. And the system level allows you to basically revolutionize the way you do things at the operation level, whether it's national security or private sector, commerce, doesn't matter, it's the same thing.

TI: Well, and going back to something you said earlier, say you're at Google and you (discussed) this innovation in terms of systems, search technology, and because of that (they) become successful and (they) become really, really big. How do (they) stay innovative when (they) become big?

SA: Well, think about Google because it's happening in real time. They decided that it was not good enough to be a search company. So they formed Google X, and if you think about Google X today, they have driverless car initiative, they have airborne wind power project, they have biomedical innovation, robotic innovation. So they have a lot of breakout teams totally decoupled from Google. In fact, that's why they changed the name to Alphabet, because Alphabet allows them now to create these breakout teams as recognized organizations totally decoupled from Google.

TI: So that's interesting. So in the future, future generations may know Google, like my generation would say Google's a search engine. You're going to say Google is a innovation company because it's all, whatever they...

SA: That's right. And if you really think about space, at the very beginning, from imagery satellites, we went to, we needed to know the weather over the Soviet Union, so we decided we had to rapidly develop a weather satellite, so we developed a weather satellite. We also recognized that if we're going to use intelligence properly, we need satellite communication, so we quickly innovated satellite communications. When we begin to make maps with imagery, we concluded that we really needed navigation from space, so we created GPS. So all these things are all new startups from the original mission that was satellite imagery.

TI: And is there, in the life of a technology or a idea or project, it feels like there's a cycle also, that say, going back to Google, they had the idea, the innovation to do a search engine, but at some point, the cycle changes where maybe it's not so much innovation but it's really making the best possible search engine, which a lot of discipline goes into it, a lot of resources, and then it sort of changes in terms of...

SA: Well, what happened with Google and it happened with other companies, along came cell phone. So if you really think about how the internet evolved, first it started as a business and financial system using the internet to increase the efficiency of business and financial transactions, and then the cell phone came along. So it was a technology, and cell phone allowed personal communication. And with personal communication came the smart phone, which now gave a tremendous amount of power to the individual. So now you had a revolution in the way people were able to not only communicate, but do business as well. So now you had a personal innovation. And then came along the social side, and the smartphone was also a catalyst for the social network revolution. So even with the commercial internet, it went in stages. Just like we had with space at the very beginning, it went in steps.

<End Segment 3> - Copyright © 2008 Densho. All Rights Reserved.