Chapter Nine
An Army of Ninjas

UNTIL NOW, WE’VE MOSTLY BEEN EXAMINING THE SUCCESS OF single entities that exhibit ninja innovation characteristics: individuals, companies, organizations, and governments. But ninja innovators also mirror their historical counterparts in another key way: Their hard work enables others to revolutionize not just industries, but entire political structures and even societies.

Japan was steeped in war in the sixteenth and seventeenth centuries, and the ninjas played key roles in the conflicts. The Iga and Koga ninjas, led by the infamous Hattori Hanzo, played an integral part in Tokugawa Ieyasu’s rise to power as a shogun in 1600, which marked the end of the Period of Warring States. One story in particular, retold in Ninja: The Shadow Warrior, by Joel Levy, stands out:

In one incident in 1600, the Koga ninja again came to Ieyasu’s aid, perpetrating a classic ninjutsu ruse to help him escape a difficult situation. The powerful daimyo, on the verge of achieving ultimate victory, was threatened with a potentially lethal ambush, so his ninja guard created a dummy replica of their lord, filled it with explosives, and set it atop the Tokugawa carriage, which they escorted as if nothing were amiss. When the enemies attacked, the gunpowder was set off, killing the Koga ninja escort but also the ambushers, giving the carriage carrying the real Ieyasu precious time to escape.1

Ninjas’ contributions during the uprisings enabled the Tokugawa family to come to power and establish two and a half centuries of peace and prosperity in feudal Japan under the Tokugawa shogunate.2 At least in this case, ninjas played a decisive role in altering the course of history.

A Friend of Freedom

THE SAME RINGS TRUE FOR TODAY’S NINJA INNOVATORS. WHILE their work is intensely focused and personal, it has ramifications far beyond the boardroom or the balance sheet. Ninja innovators have created technological revolution, yes, but they have also empowered more widespread social change as well.

This is especially evident in the role social networking technologies played in the Arab Spring of 2011. Dictators survive on their ability to control the citizenry, and a large part of that control comes from the ability to manage the flow of information. But recent innovations in social networking, combined with the rise of mobile technology, have provided a way around the government firewalls, giving the repressed citizenry the ability to communicate and organize.

While recent political developments in these states don’t bode well for long-lasting democratic reforms, the Arab Spring was fueled by the natural human yearning for self-determination. But it was only realized because social networking tools like Twitter and Facebook empowered citizens to convey information on smart phones, tablets, and computers working outside the government-controlled information paradigm. It was no coincidence that one of the leaders of the Cairo demonstrations was a mild-mannered Google software engineer named Wael Ghonim. We can contrast the “domino effect” of these popular uprisings with twentieth-century examples in Nazi Germany and the Soviet Union.

In both countries, popular uprisings were rare. Under Nazi control, there are few examples of occupied people in Europe rising up against their occupiers. The most famous one, the uprising in Warsaw in 1944, was brutally repressed, and the Poles didn’t attempt another until the last day of the Cold War. For the Soviet Union and its satellite states, we have more examples—Hungary in 1956 and the so-called Prague Spring in 1968 being the two most famous examples. Yet in both cases, we didn’t see a domino effect at all. They were isolated incidents, and if the planners believed that their actions would lead to a groundswell of support throughout the Soviet empire, they tragically were mistaken.

Of course, this isn’t because the rest of Soviet Europe and beyond was happy with its Communist overlords. A large part can be attributed to the inability of these other citizens both to know what was going on outside the Communist propaganda machine and to organize themselves effectively. Either way, it was the paucity of information and communication that doomed any attempts at organizing.

Which is what makes the Arab Spring so unique. The mass upheaval was far more organic in its beginnings than the Czech or Hungarian uprisings, which were carefully planned affairs. The original impetus to the regional uprisings was a young Tunisian merchant who set himself on fire to protest the oppressive regime in his country on December 17, 2010. Police tried to keep his death quiet, but a cell phone video of his funeral procession made its way online within hours, stirring up anger among the citizens of Tunisia, who would go on to overthrow their government.

While not technically part of the Arab Spring, the death of Neda Agha-Soltan in Iran in 2009 was similarly influential in stirring up protests against the government there. While attending a rally protesting the questionable reelection of Mahmoud Ahmadinejad, Neda was shot in the chest. Video of her death was uploaded to YouTube, and Neda instantly became an internationally known martyr. While difficult to watch, the graphic video touched a nerve, awakening a deep-seated, fundamental human need for freedom.

The effectiveness of social networking tools in antidictator uprisings is not just anecdotal. A September 2011 study by the Project on Information Technology and Political Islam at the University of Washington examined more than three million tweets and gigabytes of YouTube content. It found that social media “played a central role in shaping political debates in the Arab Spring. A spike in online revolutionary conversations often preceded major events on the ground. Social media helped spread democratic ideas across international borders.”3

I had the great privilege of hosting a delegation from the Arab information and communications technology sector at the 2012 International CES in Las Vegas. Representatives from thirteen Arab nations came together to examine the effects of technology on the Arab Spring and explore opportunities for the Arab IT sector to grow. The political revolutions opened up countless doors for new research and investment in the region that never would have been possible under the old regimes.

It’s stunning to think that none of these tools existed even a decade ago, and the infrastructures upon which they’re built are relatively recent developments as well. Though they had been in development since the mid-1940s, cell phones weren’t widely accessible until the introduction of Code Division Multiple Access (CDMA) by Qualcomm in 1994—an idea that was itself nine years in the making—followed three years later by the introduction of the first Wi-Fi standards.

It can be argued that the Arab Spring eventually would have occurred without the availability of these technologies, but it definitely wouldn’t have happened so quickly or visibly without broadband and mobile devices creating global awareness and enabling global support and encouragement for the spread of democracy in the Middle East.

The truth is that technology is often a friend of freedom. Before the advent of the Internet and social networking tools like the ones used during the Arab Spring, revolutionaries utilized radio broadcasts to inform and mobilize. During the Cold War, Radio Free Europe broadcasts originating in West Germany penetrated deep behind the Iron Curtain into Bulgaria, Czechoslovakia, Hungary, Poland, Romania, and even into the Soviet Union. The organization, which has since fittingly moved its headquarters to Prague, Czech Republic, now broadcasts into Iraq, Iran, Afghanistan, Pakistan, and other places where unfettered access to information is hard to come by, though new mobile technologies allow faster access to information and direct, person-to-person communication.

Politics by Other Means

TO A CERTAIN EXTENT, THESE TECHNOLOGIES HAVE ENGENDERED social and political change in the United States as well. On February 19, 2009, the video of CNBC commentator Rick Santelli’s rant about the Homeowners Affordability and Stability Plan—a.k.a. the mortgage bailout—went viral online. Millions—far more than the number of people who watched it on the original broadcast on CNBC—saw it on YouTube and other sharing sites. The video is widely credited with being a launching point for the Tea Party movement, which organized over widespread frustration with government spending, deficits, and debt. The Tea Party was able to organize effectively and become a powerful political movement because it didn’t rely on established Republican Party networks for funding and communication purposes. The Internet empowered them to gather information on their own and organize campaigns with minimal overhead.

While smaller and arguably less effective, the Occupy Wall Street (OWS) movement also finds its origins in social networking and mobile technology. By utilizing the Web’s vast networking tools, OWS protestors were able to coalesce around their frustration with the disparity between what they dubbed the 99 percent and the 1 percent, not just in New York City’s financial district, but in protests around America and indeed around the world. They used social networking to organize massive demonstrations and uploaded videos on their rallies to YouTube. Of course, for both the Tea Party and OWS, these videos—sometimes featuring the worst behavior in their ranks—were used against them as well.

Say what you will about the particular policies and practices of either the Tea Party or Occupy Wall Street, but the fact remains that neither movement would have been possible without the groundwork having been laid by ninja innovators. The tools created by the Mark Zuckerbergs and Jack Dorseys (of Twitter) of the world have made it possible for people’s voices to be heard on issues they never would have been influential on previously.

One of the great miracles of innovation is that it breeds more innovation. Dorsey and his cohorts at Twitter set out to create a new way for people to share “a short burst of inconsequential information” with a small group of friends. But the phenomenon known as the free market had bigger ideas. Dorsey and his team never could have known their creation would fuel political movements in the United States, much less revolution in the Middle East. But it has.

While some are using these technologies to help them pursue political change, the rest of us are finding ways to use it to stay informed and share stories. When U.S troops entered Osama bin Laden’s hideout in Pakistan in May 2011, the world first learned about it because a local Pakistani was tweeting about the commotion. Sohaib Athar became a worldwide celebrity for complaining about the noisy helicopters flying above his home in Abbottabad (who wouldn’t?). Little did he know at the time that those helicopters carried the U.S. Navy SEALs who would take out the world’s most notorious terrorist.

Innovation also helps save lives. When natural disasters strike around the world, including the devastating earthquake and tsunami in Japan or extreme floods in Thailand, mobile devices and social media enable rescue efforts to be targeted and effective. “Less than an hour after the quake [in Japan],” one report noted, “with the country’s phone system knocked out, the number of tweets coming from Tokyo were topping 1,200 per minute, according to Tweet-o-Meter.” Numerous media outlets set up Twitter accounts to post updates about the tragedy, while Google activated its Person Finder tool, which helps people reconnect with loved ones following disasters like the tsunami.4 (Yet further evidence to contradict the radio broadcasters’ claim that we need FM chips in our cell phones.)

More, innovation helps us heal by fostering community. When a gunman opened fire in a crowded movie theater in Aurora, Colorado, in July 2012, information was shared rapidly around the country and the world. In another famous example, a user of the website Reddit posted about his experience inside the theater, while others posted video from the scene. By the time the news crews got there, thousands of people already had a good idea of what had happened.

Almost immediately, other victims’ stories started to come out via other networking platforms. We heard harrowing tales of how some brave moviegoers put themselves in the line of fire so that others might survive. As the hours and days wore on, more people shared their stories, whether on Reddit, Twitter, Facebook, or a host of other sites that connect people with one another. These public platforms allow us to tell our stories, process our feelings, comfort one another, and start to rebuild.

Innovation Builds Its Own Defenses

THERE’S ANOTHER IMPORTANT SIDE EFFECT TO ALL THE INTERCONNECTEDNESS these innovations help foster. They make us, the consumers, stakeholders in their continuing success. Imagine the outcry if Uncle Sam attempted to censor Facebook or Twitter posts or impose taxes on their use. (Actually, you don’t need to imagine it, as I’ll explain shortly.) It wouldn’t just be the companies themselves who stood to lose from government meddling; we’d all lose. In essence, these innovations have turned the masses into an army of ninjas, jealously guarding the tools that have led to a freedom explosion.

As powerful interests seek to stifle innovation, it’s the people who are fighting back, advancing innovation through novel uses of the technological tools developed by the more recognizable, high-profile ninja innovators featured throughout this book.

In 2000, a team of ninja innovators created a music discovery service to help independent musicians find their audiences. One of the innovators, Tim Westergren, was a musician himself—he had played in rock bands and written film scores—and saw a need for technology that would solve the problem of discovery by helping listeners find new music and artists find new audiences.

Five years later, Pandora was unleashed on the world, letting users create their own Internet radio stations based on artists, albums, or genres they already like. Pandora picks the songs based on thousands of characteristics, greatly increasing the chance that the listener will hear something new that they like. The more feedback a user provides about the songs they hear, the smarter and more personalized their playlist becomes.

Pandora revolutionized the way we consume music and find new favorite artists, and has found great success. It is listed as the second-most-downloaded iPhone app of all time in the iTunes App Store, second only to Facebook. In June 2012, Pandora reported having a library of more than 900,000 tracks available to its 54.5 million active listeners, who accounted for 1.08 billion listener hours that month.

Pandora is increasingly prevalent everywhere. It is available in forty-eight vehicle models and hundreds of consumer electronics products, from computers and smart phones to Blu-ray players and Internet-enabled televisions. It is even built into some refrigerators.

But Pandora faces challenges. As mentioned in chapter 8, under some rather arcane laws, Pandora must pay half its revenue to performing artists, record labels, and songwriters. One of its main competitors, SiriusXM satellite radio, pays about 7.5 percent of revenue. Broadcast radio pays nothing to record labels. This imbalance is the work of a relatively small band of Washington lobbyists who have resisted every effort to require broadcast radio to start compensating artists and labels for airing their music.

There is no good reason why radio has such a competitive advantage. All music broadcasters, over-the-air, satellite, or online, should be operating on the same playing field. Instead, we have Pandora and satellite supporting the studios and artists while radio gets a break.

The only thing that will convince Congress to correct the lobbyist-created imbalance is a veritable army of American consumers. Pandora users must act to alert politicians that they care about musicians and Pandora and they want them both to succeed. Fortunately for Pandora and its millions of music-loving users, the American people have already proven they can and will defend innovation, often by using the very tools created by other ninja innovators in the process.

In 2011, the copyright lobby was pushing hard for legislation that would have allowed any copyright holder to shut down almost any innovative website by alleging a violation of intellectual property. Stopping this legislation, deceivingly called the Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act (shortened to the PROTECT IP Act, or PIPA) in the Senate and the Stop Online Piracy Act (SOPA) in the House, was a major priority for CEA, because it would have served to stifle online innovation—which is the future of all innovation.

The copyright lobby would not talk with us about fixing the bill, because they were convinced they could pass the legislation as they wrote it. They thought they could get exactly what they wanted in the legislation without having to compromise an inch. Indeed, the legislation passed unanimously through the Senate Judiciary Committee and had the support of most members of its House counterpart, but that was before the user of modern technology took notice. True to form, the copyright owners—the Hollywood studios and record labels—were living in the past. They failed to appreciate that the very technology they had spent decades opposing had changed the world.

As entrepreneurs, innovators, and website owners became aware of the legislation, innovation-friendly politicians like Representative Darrell Issa (R-California) and Senator Ron Wyden (D-Oregon) vocally opposed it. Then, as opposition to PIPA/SOPA built, online innovators staged a virtual strike. On January 18, 2012, many of the world’s most popular websites—from the behemoths Google and Wikipedia to blogs and daily Web comics—shut down or ran statements announcing their opposition for that day to protest the proposed legislation even though their companies were fully functioning—a modern-day Atlas Shrugged as it were. It was annoying and frustrating for those of us who rely on the Internet to do our jobs or connect with friends and family, but that was the point. These innovators finally stepped out of the shadows to embrace their status as important—and yes, powerful—figures in our social and economic fabric, and demanded we start paying attention to their plight.

Many, like Wikipedia, the popular online encyclopedia, asked users to demand that Congress reject PIPA and SOPA and any other efforts to censor the Internet or stifle online innovation. Within twenty-four hours, Congress received some five million contacts from Americans angry about the proposed censorship, and more than thirty politicians withdrew their support from the legislation, killing it for 2012 and for the foreseeable future.

The people—this army of ninjas—not Congress, killed PIPA and SOPA. Leaders cannot govern without the consent of the governed, but in many cases historically they have been allowed to do so because of the barriers to civic engagement. In the pre-Twitter/Facebook days, it took a lot of time and resources to find out what was going on, spread the word, and rally the troops to oppose bad legislation. Technological innovation, however, has broken that cycle, making leaders accountable to the people all the time, not just every two, four, or six years at the ballot box. Welcome to the New Washington.

Pandora users need their own PIPA/SOPA moment. Unlike PIPA and SOPA, which targeted the entire Internet with overbearing regulations, the regulations that handcuff Pandora are narrowly focused, and really only affect Pandora and other similar services. The campaign will be difficult, but similar smaller-scale protests have been executed.

For example, on a hot Monday in July 2012, several thousand Internet users made a huge difference for one innovative start-up company that faced stiff opposition from the entrenched interests suddenly threatened by an up-and-coming challenger. Uber is a fast-growing service that connects smart phone users in major cities with nearby idle limo drivers. Many car services require three-hour minimums for chauffeured town cars or SUVs, so those vehicles end up sitting idle for long periods of time. Uber’s summon-a-car app connects those drivers to users who want a cleaner, classier, and potentially quicker ride than they’d get from an on-demand limo service with its three-hour minimum. The service fills a huge gap between the randomness of taxis and the huge expense of limousines, and has taken off quickly in every city in which it has launched.

As you might imagine, the service threatens the entrenched taxicab monopoly, which went to work to shut down Uber. The D.C. Taxicab Commission was pushing for legislation that would have required sedan services—like the ones used by Uber—to charge at least five times more than a traditional taxicab. The bill even boldly admitted that it was intended to protect taxis from direct competition. What arrogance. But the CEO of Uber asked users to contact the city council, and in just a few hours, several thousand had responded. One councilman said his office received five thousand contacts in just a few hours. The proposed legislation was withdrawn and replaced with language that for several months specifically exempted mobile-phone-based sedan services from commission regulation.

Just a few years ago, such a stunning turnaround would not have been possible. Indeed, the Uber example is in many ways more remarkable than what happened during the PIPA/SOPA fight. This was just one company in one city. And yet, a Washington-based army of ninjas rose up to defend an innovative business model that fulfilled a demand that was not being met by existing services. The blatant pandering to the taxicab monopoly from members of the D.C. city council—which once would have gone on without any messy scrutiny—was laid bare for all to see. Humiliated and humbled, the council knew it had to change course.

And it’s not just the people who have been recruited into this army of ninjas. Federal and state courts are also increasingly siding with innovation. An example occurred recently in New York City, where over-the-air television users often cannot receive signals thanks to the multitude of skyscrapers blocking the signals from homes. A service called Aereo was launched to help alleviate the problem by using a special antenna to resend the signal. It allows users to access live TV broadcasts at home or on the go through mobile devices and features DVR capability, all in an online interface that requires no downloads, setup, or special equipment for the user.

Broadcasters sued to stop Aereo from providing the service, claiming that the technology is illegal because it retransmits copyrighted content. Fortunately, a federal court in New York denied the preliminary injunction. The court based its decision on two other big court decisions regarding how consumers can use technology. The first was a Supreme Court verdict commonly known as the Betamax decision, which determined videocassette recorders (VCRs) were legal even though they were capable of recording full-length TV broadcasts—a particularly noteworthy episode in the history of innovation. The second case was a 2008 federal appellate court ruling known as the Cablevision decision, which found that a cable company’s centrally located (as opposed to in-home) digital video recorders (DVRs) did not violate copyright law.

The Aereo decision reinforced the vitality of both the Betamax and Cablevision decisions as precedents that covered more than those specific brands. The court rejected the broadcasters’ argument that those cases were limited to “time-shifting,” where the consumer starts watching the recording after the broadcast is complete, strengthening the legal foundation in support of innovation that enhances users’ access to broadcast television.

Similar challenges have recently been levied against new technology created by DISH Network that allows users to skip commercial breaks in programs they record on DVRs. Given the recent trends in courts finally starting to side with innovators over the entrenched special interests, however, things are looking promising for DISH and its consumers.

This movement for innovation also extends far beyond the world of consumer electronics, because the work of ninja innovators affects us all. Take, for example, a company called EHE International, which provides employee health and lifestyle management services. For one hundred years, the company has focused on providing preventive health care services, mostly as a perk companies provide to their executives. But recently, thanks in large part to technological innovations in the health care sector combined with a social and political environment that encourages rethinking our approach to health care, EHE has been expanding and growing. Its services are now directed at all employees—not just employers—because preventive medicine is the best way to stay healthy. While too many health providers focus on treating diseases, EHE is focused on preventing those diseases from happening in the first place.

Here is a company that not only saw an open door to promote a revolutionary approach to a major part of every person’s life, but that also seized the innovations created by others to make that approach not only viable but attractive to consumers. Companies like EHE that don’t necessarily deal directly in consumer electronics can benefit greatly from the innovation movement, so long as their leaders embrace the ninja approach to business: being creative, flexible, and adaptive, and capitalizing on the advances others have made and applying them to their own business models.

These kinds of people-powered changes, whether on the large scale, like efforts to stop SOPA and PIPA, or the small scale, like the outcries that allowed Uber to serve its users in the nation’s capital or Aereo to allow TV viewers in New York better access to signals, are possible precisely because of the often-behind-the-scenes work of ninja innovators. They have allowed us to sidestep the filters of government and media, which too often serve the status quo, creating an information and networking revolution.

Sparking an Innovation Movement

INNOVATION HAS AFFECTED OUR CULTURE SO DEEPLY THAT IT HAS spurned its own sort of political and social party, known as the Innovation Movement. CEA started the Innovation Movement in 2009 after a survey we commissioned from Zogby International found that just 13 percent of Americans believed the United States would remain the world’s innovation leader in ten years. More than a third said they expected the United States to take a backseat to China.

The Innovation Movement (DeclareInnovation.com) is built on the understanding that if we want a strong economy, Americans will have to work together to defend, revive, and promote innovation and entrepreneurship. Nearly three-quarters of Americans say that entrepreneurs who create and build companies are driving innovation today, compared to just 5 percent who credit policymakers who make spending and tax decisions. The goal of the Innovation Movement is to reverse the failed approach to economic revitalization that America has been pursuing for far too long and that too often demonizes business and entrepreneurship in favor of centralized control by the government.

There is long-simmering frustration on both sides of the political spectrum with government bailouts of failed companies, a practice that chokes out investment in new and innovative companies. People are waking up to the fact that overbearing regulations encourage companies to invest in jobs outside the United States rather than inside our borders. Citizens are recognizing that if we discourage the world’s best and brightest from joining our ranks, they will find somewhere else to innovate.

For the United States to continue to lead the global economy, we need to pursue national policies that encourage innovation, creativity, and new ideas. We need to invest in technological innovation and create an environment where entrepreneurs can challenge, improve, and strengthen our society. Entrepreneurship, combined with technological innovation, will mend the global economy and lead us out of the economic doldrums. But just as ninja innovators have come to our aid, we must come to theirs.

The Innovation Movement is made up of regular Americans, businesspeople, and activists in both political parties who are putting aside traditional party labels, who are refusing to participate in the partisan bickering between left and right, and who are uniting around the innovative spirit that will save the American economy and restore our nation to its rightful place as the most productive, most prosperous nation on earth.

To date, the Innovation Movement has attracted more than two hundred thousand members whose lives have been touched by the consumer electronics industry, whether as active entrepreneurs and innovators or as consumers who use their products every single day. The grassroots campaign looks beyond party politics, sometimes siding with Republicans and sometimes siding with Democrats, whether on international trade, immigration policy, deficit reduction, broadband deployment, or a host of other issues that directly affect Americans’ ability to innovate.

A central principle of innovation is that if the American people are free to choose their own ideas and pursue their opportunities, we can bring our economy back to life from the ground up. As we saw during the SOPA/PIPA debate, real change comes from below—when citizens, organized and informed through the very innovations a select few want to stifle, say enough is enough.

Thanks to the tireless work of ninja innovators in the past and present, we have the tools we need to get the job done. But, as an army of ninjas, we must seize the opportunity they have given us.