When it comes to innovation, what's the most common mistake that companies make?
Companies have focused on the wrong thing when it comes to innovation--at least, that's according to an article posted yesterday by venture capitalist Ben Horowitz, cofounder and partner of Andreessen Horowitz. He argues that instead of focusing on what new technologies can't do, the proper focus is considering what technologies might do in the future.
As examples, Horowitz explores the skepticism and rejections that greeted the introductions of the computer, the phone, and the Internet.
The lesson, for those looking to lead teams or organizations that innovate: Think twice before you dismiss new technology as useless. The most groundbreaking technologies usually come out decades before businesses and consumers are ready for them.
The First Computer Was Useless
In 1837, Charles Babbage tried to build the world's first computer--made out of wood and powered by steam. "Ultimately," writes Horowitz, "in 1842 English mathematician and astronomer George Biddel Airy advised the British Treasury that the Analytical Engine was 'useless,' and that Babbage's project should be abandoned. The government axed the project shortly after. It took the world until 1941 to catch up with Babbage's original idea, after it was killed by skeptics and forgotten by all."
Western Union Refused to Buy the Patents to the First Telephone
Alexander Graham Bell offered his invention and patents to Western Union for $100,000. Western Union, the leading telegraph provider at the time, rejected him. Horowitz excerpted a report from the internal committee at Western Union that made the decision. Here are two direct quotes from it:
The Telephone purports to transmit the speaking voice over telegraph wires. We found that the voice is very weak and indistinct, and grows even weaker when long wires are used between the transmitter and receiver. Technically, we do not see that this device will be ever capable of sending recognizable speech over a distance of several miles.
Furthermore, why would any person want to use this ungainly and impractical device when he can send a messenger to the telegraph office and have a clear written message sent to any large city in the United States?
E-commerce Will Never Be a Reality
As late as 1995, the mainstream American media was printing articles full of skepticism about whether e-commerce would ever be plausible. Specifically, an astronomer named Clifford Stoll wrote in Newsweek: "We're promised instant catalog shopping--just point and click for great deals. We'll order airline tickets over the network, make restaurant reservations and negotiate sales contracts. Stores will become obsolete. So how come my local mall does more business in an afternoon than the entire Internet handles in a month? Even if there were a trustworthy way to send money over the Internet--which there isn't--the network is missing a most essential ingredient of capitalism: Salespeople."
The 20-Year-Plan of the Barcode
All of this reminded me of a story Adam Vaccaro and I worked on about the history of the barcode. The scannable barcode that you see on nearly every product known to man was first patented in 1952. But no one made any money off it until 1974, when a group of leaders from the supermarket industry decided to give it a chance.
Edward Tenner, author of Why Things Bite Back and Our Own Devices, provided a key lesson in the barcode story that's applicable to this one too: Even if the ecosystem isn't ripe for your invention, "keep it alive in institutional memory and [periodically] review whether there might be some unexpected use for it," he says. Amazon's Kindle, for example, came out in 2007--some 15 years after Sony's first e-reader saw the light of day. Only in 2007 had the ecosystem--high-speed connectivity, mobile devices, downloadable content, and simpatico publishers--finally arrived.