15 Jun Disrupting Ambiguity is the Path to Innovation

This week’s reading and thinking inspires a theory that the path to innovation is not just disruption (i.e., destroying the status quo) but “Disrupting Ambiguity”.

Disrupting Ambiguity is not about destroying the other side in a conflict – it is about resolving the conflict by moving to a whole new level that makes the differences of the two sides’ moot, irrelevant.  When conflict is resolved, innovation is transported from the realm of the “early adopters” to irresistible to the whole community.   But who will the leader be?

Example One: The Ambiguity of Making Money. Fred Wilson posted “How We Measure Success”, in which he asks this question: “would (you) be happy if Stack (whose president is quoted as saying he and his team is motivated about making the internet better, not making money) didn’t make profits but did make enough
money to sustain itself (a non-profit?).”
Fred responded with a “yes, but” answer (see the post to read it yourself) and then went on to say that “our number one goal . . . is very large networks of engaged users. We believe if they do that, they will build value
for themselves and us.”

Analysis: Fred Wilson is a VC. His very large networks of engaged users strategy is an example of disrupting the ambiguity by making better stuff and making money:  Anyone can get your attention with a novel product, but only products with meaningful benefits will engage.  If the product is good enough to engage, then early adopters are likely to talk about it, forming a network.  And if the product is really good, that network will scale up to be very large.  But, the weakness in this strategy is treating customers as users.  Let’s face it, the idea of users is hardly innovative.  Big media companies “used” creatives for content and the audience to generate revenue from advertisers.  When one party in a relationship is treated like a user, eventually they rebel.  So it’s not surprising that when Stewart Brand said “Information wants to be Free” no one heard the rest of what he said, which brings me to example two . . . .

Example Two: The Ambiguity of “free”. Michael Hirschorn writes in The Atlantic about “Closing the Digital Frontier”.  He reveals that Stewart Brand’s seminal “information wants to be free” statement was only part of the point. The rest of his statement demonstrates the ambiguity of “free”: “it came with a significant disclaimer: that information also wants to be expensive, because it can be so important” (this is how Hirschorn paraphrases it with reference to actual quote as shared by Walter Isaacson in a second article in The Atlantic, “Information Wants to Be Paid For”).  Hirschorn goes on to point out the reason Apple’s market cap just surpassed Microsoft is the “app model, where content is more likely to be accessed via smartly curated “stores”
like iTunes, Amazon, or Netflix, (which) signals the first real taming of the Wild Digital West.”

Analysis: This article suggests the timing for “Disruptingthe Ambiguity” of “Free” and therefore the concept of “Users” is nigh.  Michael Hirschorn is in independent television entertainment production and he is about what “sells” not what will “innovate”: “The stuff I think will change people’s lives — that’s the stuff that usually doesn’t sell,” he said. “I think you’re always trying to work in a little spinach into
the cotton candy and a little cotton candy into the spinach. You need to find a way to exist somewhere in between.” 

However, I do think he sees the ambiguity,
which is a lot more than many do. But who will lead the way?  Which brings me to example three . . . .

Example Three:  The Ambiguity of Leadership. In “The End of the Free Market.  Who Wins the War between States and Corporations?”  author Ian Bremmer explains how countries like China have been funding innovation to compete in the global Free Market to sustain their power: “the (authoritarian) state is using markets to create wealth that can be directed as political officials see fit. . . the ultimate motive is not economic (maximizing growth) but political (maximizing the state’s power and the leadership’s chances of survival).”

Analysis: Wonder if the US isn’t the model for this “state capitalism” since both Roosevelt and
Kennedy accelerated innovation by providing government funding to start-up companies who could help the US achieve objectives related to national security (first, building a military complex to fight in WW II and second, building the capability to go to space). The Roosevelt administration helped one of today’s largest, still family-owned, consumer package goods companies, Mars, capitalize on its patents, shipping chocolate by candy-coating it (M&M’s), shipping rice by par-boiling it (Uncle Ben’s), and canning meat (Kal Kan).

Wonder if it will take government intervention to lead the way and decide which business and investor leaders will have the advantage in the market.

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katherine@comradity.com