Where Are The Big Ideas?
As part of my growing obsession with the inefficiency of the innovation system that leads to a huge proportion of good ideas going nowhere if they cannot overcome the multiple hurdles to commercialisation I’m in discussions with a local university business school about pursuing a PhD in the subject. It’s an issue that everyone recognises but no-one has proposed any workable solution, bearing in mind that it’s not just about chucking money around, but you also have to have the right financial structures in place to make it possible for institutions to invest.
Typical of the moaning from the sidelines is the attitude reported by @Maxmarmer at Havard Business Review
Many venture capitalists are up in the arms because their returns are down, their funds are drying up, and there appear to be a declining number of entrepreneurs pursuing big ideas.
They’ve turned to blaming angel investors for encouraging “an entire generation of entrepreneurs [to build] dipshit companies and hoping that they sell to Google for $25 million.” They say, “this ‘think small’ attitude is driving entrepreneurs who may otherwise build the next Google or Microsoft to create something much less interesting instead.” And this has implications for the whole ecosystem because, “then everyone loses. No IPO. No 20,000 tech jobs. No new buyer out there for the startups that don’t quite make it.”
Max goes on to elaborate why VCs are wrong, and how these smaller ideas lead to a whole range of Mittelstand companies and identifies how to build these companies by bringing in domain experts along with the brilliant engineers who found the companies.
It’s About Atoms, Not Electrons
It’s a good argument and I found myself agreeing with much of it, apart from one thing. As we discussed in Colombia the whole world doesn’t revolve around IT. There seems to be a myth being perpetuated that every business area can be disrupted by some smart web or coupon app, and while IT has the capacity to engender major efficiencies in a wide range of industries, I often wonder whether the cries of diminishing returns and lack of ambition are symptomatic of what is essentially a service industry running out of industries to serve and cannibalising itself. As one commuter notes:
Has the author ever thought that there is only so much that can be done via computer, that at some point creation of value requires manipulation of atoms instead of electrons and that most of our best-and-brightest are involved in the simpler, lower-cost manipulation of the former?
I discussed this in Medellin with my old friend and mentor Ken Morse and we agreed that what the world need is more companies creating goods and services that people are willing to pay for, and that the business models should be about addressing customer needs – simple eh?
So, if we want to see some big ideas, some world changing ideas such as synthetic aspirin, the transistor or the personal computer how do we get away from this myth that everything can be solved with a bit of software? In the real world we know that a workout oft the gym or mowing the lawn cannot be done with a smartphone app, but how do we convince the investor community?