Innovation is one of those concepts that is much talked about, but often in a way that confuses as much as it elucidates. Clayton Christensen has made an industry out of his study of how lower cost/lower quality/faster development cycles creates an “Innovator’s Dilemma”, but in my experience, innovation generally comes from some simple changes to already good ideas. There are three ways I’ve seen this get played out:
- Combine ideas: by synthesizing disparate ideas a novel implementation can result.
- Small changes: by changing a seemingly small aspect of an idea, a novel implementation can be discovered.
- New markets: applying a borrowed idea in one market can result in a new idea in another
I think we are going to see a lot of this sort of innovation in the blogging and social networking spaces, and The Robot Co-op is looking to be a part of that stew.
One place I saw this innovation pattern play out was in the early days of online commerce, where the basics of mail order were getting married to the internet. In the case of books.com, they combined the Books in Print database with a search engine and enabled you to order any book in print. Neat idea. Combines two previously distinct things (search engine and Books in Print) and reinvents an old market (mail order). But despite that early innovation, today books.com redirects to Barnes and Noble, and the original online bookstore got trounced by bigger rivals.
Watching Amazon.com deliver that trouncing, I think I learned 3 lessons that helped Amazon shoot past its competitors.
1. Don’t call a good generalizable idea “books.com”, “classmates.com”, or “friendster”.
2. Start with a well sized first step (books or jobs) and grow from there.
3. Exploit what is uniquely possible online (amazon’s personalization and customer reviews being two examples, easy social networking being another).
In 1998, I worked on a project that resulted in learning 3 more lessons by watching Amazon.com get trounced, rather than getting to deliver the trouncing. That was the auctions project, where Amazon.com full of confidence, tried to go head to head with a competitor it didn’t really understand. eBay had some of the same parts of Amazon (community, search, a catalog) but it was also had a much simpler, more powerful model. eBay’s catalog came from users (like amazon’s reviews) and not from distributors, and the community feedback features grew out of the transactions (like Amazon’s personalization features). Both of these created a powerful network effect that made it a formidable force, no matter how amateurish it’s HTML looked. Watching this from the front row, I learned three more lessons:
1. Don’t unnecessarily limit good ideas to familiar models
2. Exploit network effects
3. Don’t underestimate enthusiasts
I think craigslist is teaching some of these same lessons today, disrupting Monster, Newspapers, and even eBay, with a crappy looking little nickle that more than gets the job done.
I hope these 6 lessons have all gone into this product we are building, but the biggest lessons we’ve applied have to do with 3 other lessons I learned at Amazon.com:
1. Work with people you admire
2. Make sure you have fun doing it
3. Build something you can be proud of
