Radical innovation and Entrepreneurial Darwinism

To start, I should say there are two kinds of innovation: radical and incremental. Almost everyone knows and understands the difference between these two concepts. Many people also understand the hows and the whys of the two and the benefits and pitfalls. Some like to characterize that radical innovation is the way of life for the ambitious entrepreneur and incremental innovation (if any at all) is at the heart of a big company. I think that stereotyping is inaccurate inasmuch as it puts the effect before the cause.

Radical innovation is not always the bread and butter of entrepreneurs. I think the entrepreneurs we hear about are the successful ones and they used radical innovation as a strategy against their incumbent, bigger competitors. For every succesful entrepreneur there are probably ten or a hundred unsuccessful ones. Those probably failed because they did not employ a radical innovation strategy! After all if you enter the playing field and try to play by the existing rules then you are at a disadvantage. Those rules were written by players who are currently playing. They are stronger, they are bigger and they wrote the rules to help them. If you abide by those rules, you help them. Usually ending in your failure. The only way to defeat them is by changing the rules. Make your own rules that favor you and not them. That is radical innovation. It also answers the question why incumbents don't use that technique: because they are comfortable where they are! Why rock the boat? If it isn't broken, why try to fix it? If they really want to improve their business they can do it slowly, incrementally, so that they don't disturb an already existing equilibrium.

It's like a Darwinian principle. Characterization of entrepreneurs as radical change agents is akin to asking why do fish have scales. Well the answer to that is there were probably many different kinds of fish, the only ones we see now are the ones that had scales to start with. May be there were others without scales. But they didn't make it. Scales are the reason why these fish exist. In other words, scales are not the effect of the cause which is the fish. It's the other way around. Scales are the cause of which these fish are the effects. No scales, no fish!

The entrepreneurs we talk about and hear about are the not the causes of radical innovation. They are the effects of radical innovation. If their idea was not as radical we probably wouldn't know their names today. But that view also makes it sound like random choice. If you happen to have a business idea that is very original (and plausible) you succeed, if your idea is too common you don't (at least not in an explosive, fantastic way.) It sure sounds like a ruthless, merciless, Darwinistic world. May be that's the "luck" that businessmen talk about. Even Bill Gates says he was lucky. Lucky to have the right idea at the right time in the right place.

But is it really so fatalistic? I would hope not. And I think the answer is in volume: to churn up as many ideas as possible; to explore as many avenues as possible. If I wait for that perfect opportunity to knock on my door, I may get very old. With so many doors and so many people waiting, opportunity has a low probability of knocking on my door. It may be more useful for me to knock on as many doors as possible and see if Opportunity is hiding behind one of them. Now that's radical innovation.