We have had a very interesting discussion this week at PGS. The subject has been: “What is better: investing in a fairly safe project with reasonably high probability of success with a limited return rate, or investing in a project with Global market, high risk, but in case of success – enormous return?” I think I’m quite conservative. If you have $x for investment, only a small fraction of that x can be spent on high risk projects. Also – before we start high risk projects we should prove that we know how to make “small” money on the safe projects.Today we have only one project which has no defined customer yet. It’s a product we hope to place in many places, but haven’t got a paying customer yet. All the other projects already have business partners who will invest their money as well to sell the product once it’s ready. This is much safer.

We currently have 4 R&D projects going on. I get mad, as they go slower than I would dream they should. But I do remember Dilbert… So now I have to carefully define what I really need to limit the time needed, and to get the best ready-to-market product in the limited time. And what is great – the team challenges me every time I come with any new idea. I also learned how to write specs, which mean something. I remember the first time I wrote my specs, one of the leaders came to my office saying the worst customers give us better documentation :-). But it does not change a thing that everything goes so slow… Having 70 developers company you would think that you can get any project completed by tomorrow. But most of them actually deliver customers’ projects and cannot work on anything else, so I need to wait. So I practice my patience. Meanwhile I get specs ready for new projects to work on. We get more of them, so the pipeline is full until the end of the year. I wish I could the results now…

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Recently we have had a very interesting discussion with the CEO of PGS Software about innovation. It started from one of the most popular questions nowadays: “What does it mean, that something is innovative?”.

The reference definition, which we used, was the one, which is meant to be the official statement saying “technology can be called innovative if it has not been in use for more than xxx years…”. Useful as this definition is for official purposes, it does not really give you the practical meaning of the innovation.

If you think about innovative products, which are so common currently… The statement, that Google or Skype are innovative applications, is obvious. The core question (not only in this case) is “Why is that?”. Is Skype innovative, because it uses some rocket science technology or newly created algorithms for voice transmission? Recently Skype is improving its transmission quality, servers availability and similar points within user experience area. However when Skype was launched, it was using commonly known voice compression and transmission methods. It was just the “Internet telephony, which just works”. Some of the students are using more sophisticated algorithms in their master thesis, than those, which were used for the first version of Skype.

The key thing is that “it just works”. Skype developers know, how to put all things together to create something working. And the result was that everybody started to use it. After couple of years millions of people are using Skype as their primary communication channel. Because using it is cheaper, easier, more comfortable… Because you can call your buddy in Australia as easily as contact your wife or parents living in the same city. Life of millions of people changed. Similarly with Google, cell phones, e-mails, PDAs and so on…
What is the main reason, why Skype or Google are meant to be innovative then? It is not because they are developing rocket science technology (however I am sure, that currently those companies invest millions of dollars into their R&D departments). The main reason is that life of people changed in many ways, because they started to use those products. A lot of habits changed, many areas of life improved. This is far more practical definition of innovation.

At the PGS Software we are using the latest technology, which combined with our experience leads to amazing applications. However, the main reason, why we call PGS an innovative company is, that we bring innovative solutions to the business of our customers. We are not only preparing a piece of software basing on already received specification. In many cases we implement a completely new process into the company of our customer – starting from the analysis of its needs and finishing on the implementation of process innovation. As a result the business of our customer changes – it becomes more competitive with improved quality and performance. Similarly as the life of many people changed, when they started to use Skype or Google.

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