A short word on innovation

Innovation in a business context is one of the most misunderstood concepts around. I have to admit that I’ve misunderstood it for most of my life too. I’ve grown to realise that ideas by themselves are pretty much worthless — and innovation really arises out of a process of execution of those ideas that tests and combines other ideas, technologies and theories. It’s common sense really.

It’s why Venture Capitalists will rarely invest in ideas (or even a track record), but rather need some evidence of execution (focus and passion help too). Of course there are always exceptions, but the above tends to hold for most web businesses. It’s why most non-disclosure agreements (NDA) for that so-called unique “big idea” are a bit laughable. I generally don’t sign NDAs and I’ve never met someone who was really offended that I didn’t. I’m not sure if this is myth or truth: but there apparently isn’t an example of an NDA that has ever been successfully contested in any court anywhere in the world. Unless you’re working at MIT and have made a scientific breakthrough, it’s unlikely your idea is original in the way you think it is. For the most part, an un-executed idea is practically worthless.

An innovative web business is the sum-total of its execution: the myriad features, the quality and unique combination of those features, and the web of business decisions built around it. Skill, courage, timing, luck, personalities and pure randomness behind the project all play a role in sculpting that innovative business or feature.

Take Google. What’s innovative about email and search as broad ideas? The innovation lies in Google’s unrivalled execution of these businesses rather than the broad ideas themselves (Search: Pagerank, unique server infrastructure, ad networks; Email: Ajax based, discussion-based, fast & reliable). Even the iPhone — the uber example of innovation — is a combination of pre-existing ideas (we’ve seen iPhone like functionality on Minority Report and countless other places) applied to a new context (mobile phones), and applied really well.

Execution.