Jeff Nolan, reformed VC sums up the current Valley situation perfectly.
As I survey the landscape of consumer and business focused software and service providers I am struck by how much incrementalism there is at the moment. Something like Twitter is ground breaking in terms of break out adoption, but what about the other 10,000 startups? There are few bold “ah-hah” ideas, lot’s of social this or that, and mostly a bunch of companies hoping to draft on the perceived success of a few gorillas. Will we suffer through yet another “year of the mobile web” or “the semantic web”? [From Incrementalism and The New New Thing]
My sentiments exactly. Though I have often wondered if the ignominy of having lived through an over exuberant time at the turn of the century had jaundiced my point of view. The quality of start-up pitches I receive on a daily basis has been on a decline, and the story lines have started to blur.
9 thoughts on “The New New Incrementalism”
I have been looking at this from a different angle … often, the completely left field new ideas come from first-time entrepreneurs, which is why the rise of Zuckerberg is worth a consideration.
Where I am going with this, is to try to understand how our eco-system captures the first-time entrepreneurs:
and also posing the question:
I can understand how writers or reporters (and bloggers) are getting blurry vision about companies and entrepreneurs.
But I think the point that Jeff and you (with all due respect) are missing is that “ah hah” doesn’t alway make for a good company (or product for that matter).
“Ah-hah” makes for good reporting and especially for good blogging – but not always good business.
Afterall, Google wasn’t an “ah-hah” moment – it was rehashing what everyone else was already doing – only they did it better (arguably, incrementally better).
Not all of Apple’s “ah-hah” moments have been success (Newton anyone?).
Many companies are not “ah-hah” companies – but have been able to build fantastic businesses (yes, venture backed businesses too).
Twitter is an exception in that, in spite of what most people in the blogosphere believe, Twitter is FAR from mainstream in any capacity. Just b/c CNN mentions Twitter does not a success make.
I would argue that most VCs (and smart entrepreneurs) should be looking for good businesses instead of focusing on the “ah-hah.”
In many ways, there is nothing new under the sun.
I think a 10/10 rule applies. If the startup or the funding VC cannot make a reasonable case for reaching at least 10% of people online and engage them at least 10% of their time spent online, it is ‘incremental’.
You’re looking at two different things (ever read “the innovator’s dilemma”? If not, read it):
On one hand, sustaining innovations – those which add incremental value as a result of a small improvement. Things like a faster processor, smaller notebook, or in the case of websites – bebo, hi5, orkut, are all sustaining innnovations because they take an existing model, tweak one extra thing, and then let it fly. It’s a good business, BUT, it’s not buzz worthy.
Another one in the disruption category is twitter. Nope, it’s not mainstream, but what’s the comparison for the continium it follows? IM? It’s definitely NOT IM, else I’d be using it. I’m not a twitterati, and still fail to graps the principles of what they’re doing.
However, the disruption stories like twitter or iPhone are exactly the kind that journalists crave, but they will be, by necessity, few & far between. How often does some industry need to be completely blown up? Shaken out & have most of the established players lose their market, company and go out of business as in the Innovator’s Dilemma stories?
The answer is not often, and in websites (which really, a lot of start ups are websites) it’s going to happen increasingly less frequently as more things have been done.
The rest, from here on out, are going to be 99.9999999% sustaining innovations – one small improvement on an established model. That’s not sexy, that’s business as usual.
And it’s challenging to write about stuff like that 🙂 I don’t envy the journalist’s job, I applaud it.
However, it is important to note that sometimes, you need to take a fresh angle.
Say with sustaining innovations, you look at who’s doing well relative to funding? Team size? Features & functionality? Target market, and if their innovation will enable them to reach their goals (or not).
As a consultant, I’ve seen dozens of companies with a one legged marketing strategy and the rest they don’t have a wing or a prayer, they just think that something will work. Those that are winning are following along established best practices, have one or two innovative features and are plowing through well trod ground.
Again, it’s business as usual, and not sexy, but it’s the way forward.
It’s a fairly straightforward change, IMHO.
“Something like Twitter is ground breaking in terms of break out adoption, but what about the other 10,000 startups?”
The part of the underlying equation that has changed is the internet itself. I know it’s a bit recursive, but remember before we had the internet, and what it would take to start a business that could become worth billions in a few years?
Right, it didn’t really exist. The barriers to entry in the billion dollar business world are usually extreme. In this case there are a few doors that are still open, and there’s a whole lot of people trying to get through them with a whole lot of ideas. Take an older idea, and that AJAX magic (the good stuff, like flickr) and you have that thing.
With the death of the newspaper and the iphone (bringing digital ubiquity), there’s still a ton of growth potential and perhaps more doors than we realize.
I mean, after all…I’ve got one…
Allow me present a few thought points via observations after visiting the valley and having seen similar problems in Bill’s backyard.
1) Are VC’s and Entrepreneur’s trying to turn every idea into web 2.0?
2) Are people traveling in the same social circles, having the same conversations, and thus coming up with the same ideas?
3) Are we building ideas because the tech is available or because the business is smart?
After several VC and Entrepreneur conversations it seems tunnel vision is indeed occurring in west. That’s normal and natural progression from brilliant people surrounding themselves with brilliant people. It’s happened on Wall Street and it’s happening now out west.
But here’s a recommendation based on RoPiNi’s oberservation that there are thousands of doors out there that no one is touching.
If you are looking for the next new idea, Look outside of your circle. Talk to the gas station attendant, talk to the janitor, talk to the school teacher, talk to your 3 year old (if you want them on the net), but talk to someone new every day.
Different backgrounds lead to new ideas