The innovator’s blind spot

Turns Out the Dot-Com Bust’s Worst Flops Were Actually Fantastic Ideas – or so argues Wired magazine.  There remain “many deliciously ideal symbols” of the epic failures during the bust, but “the irony is that nowadays, they’re all very good ideas.”

Now that the internet has become a much bigger part of our lives, now that we have mobile phones that make using the net so much easier, now that the Googles and the Amazons have built the digital infrastructure needed to support online services on a massive scale, now that a new breed of coding tools has made it easier for people to turn their business plans into reality, now that Amazon and others have streamlined the shipping infrastructure needed to inexpensively get stuff to your door, now that we’ve shed at least some of that irrational exuberance, the world is ready to cash in on the worst ideas of the ’90s…  (Emphasis added – ed)

The lesson here is that innovation is built on the shoulders of failure, and sometimes, the line between the world’s biggest success and the world’s biggest flop is a matter of timing or logistics or tools or infrastructure or luck, or—and here’s the lesson that today’s high flying startups should take to heart—scope of ambition.

Maybe if Pets.com had kept its head down and worked harder on getting the dog food to our doors than assaulting U.S. airwaves with ads like the one below, they would have made it.

In Pitfalls of entrepreneurship, ecosystems of innovation, we discussed the book The Wide Lens and what author Ron Adner termed “the innovator’s blind spot: failing to see how success also depends on partners who themselves need to innovate and agree to adapt.”  Here’s Adner:

Companies understood how their success depends on meeting the needs of their end customers, delivering great innovation, and beating the competition…  To be sure, great customer insight and execution remain vital, [but] two distinct risks now take center stage:

• Co-Innovation Risk: The extent to which the success of your innovation depends on the successful commercialization of other innovations.
• Adoption Chain Risk: The extent to which partners will need to adopt your innovation before end consumers have a chance to assess the full value proposition.

…When you try to break out of the mold of incremental innovation, ecosystem challenges are likely to arise… a strategy that does not properly account for the external dependencies on which its success hinges does not make those dependencies disappear.  It just means that you will not see them until it is too late. … Dependence is not becoming more visible, but it is becoming more pervasive. What you don’t see can kill you.

Adner serves up an easy-to-grasp example, a 1998 precusor to iPods called “MPMan:”

It sold 50,000 players globally in its first year. But [it was very different than the Walkman] 20 years earlier.  You couldn’t purchase them in traditional retail settings.  Downloading an album – legally or not – could be a multi-hour affair. It didn’t matter that MPMan was first – it wouldn’t have mattered if they were 6th, 23rd, or 42nd. Without the widespread availability of mp3s and broadband, the value proposition could not come together.

For more examples, check out our Vintage Future series – a tongue-in-cheek-yet-barbed reminder that predicting technology trends is not for the weak at heart.  (And that’s before one tries to protect the IP and find a way to profit from it.  There are reasons we affectionately call the really early stage of investing adventure capital.)

It’s a long and difficult journey from idea to successful business, involving many inter-related factors.  The best products don’t always win.  Compelling innovations can and do fail after launch – as did this 1997 precursor to Facebook.