Entrepreneurs get often a lot of crap for not being innovative enough. It goes like “I don’t want to hear about another mobile application, I want real radical innovation”, and then they go on a rant about how entrepreneurs used to be so much more creative and think bigger. For some reason some now feel the need to include Facebook or Twitter in there, and I wonder how many of those thought Facebook or Twitter were so radical when they were created. I would guess not many because neither one was radically innovative although they were game changers.

I don’t think entrepreneurs were more or less creative than they are now and I definitely don’t think innovation was more disruptive 20 years ago than it is now. The problem is lack of perspective. It’s easy to look back and say “Wow! The Internet was such a great radical invention that dramatically changed the world”, and although the general concept is correct, the actual statement is completely false. The Internet would be a lot different if it wasn’t for the WWW, which was genius but not as radical as you might think. And the WWW wouldn’t be what it is today if it wasn’t for the dot-com boom and companies like Google, Amazon, AOL, eBay, Salesforce and many others that changed the way we do business, consume information, store data, etc.

Take the iPhone example. There’s no much radical innovation about it. You take a 2000 Palm (you should know by now that I’m a big fan of the original Palm concept), add better design, finger moves and a tightly controlled ecosystem and boom! iPhone. However, the iPhone was a disruptive innovation, especially for the wireless industry. For years the wireless industry had been trying to find the holy grail that would increase ARPU (average revenue per user). In 2006 ARPU was the key metric for wireless carriers as penetration was reaching a cap (in Europe most countries had above 100% penetration of wireless accounts) and the only way to increase revenue was by having each user to spend more. However the industry was increasingly competitive and mature and, as a consequence, ARPU was declining. Carriers tried everything: text messages, ringtones, MMS, games, you name it. The belief in 2006 was that ARPU wouldn’t increase until network speed was faster and people could watch video and make video calls. And now we know that won’t be a reality until next year or even 2013. But in the meantime data ARPU increased from $5 in 2005 to $20 2011. That’s 26% CAGR for a mature industry. That was the iPhone effect. The iPhone made us consume data through apps. How? By providing a better user experience and creating an ecosystem that allowed other people to come up with ideas to improve our mobile experience. There is nothing radical about the first iPhone or the apps but it was a major game changer.

I could go on with a list of examples of non-disruptive innovation that dramatically changed our lives but that would probably be tedious and actually wouldn’t give you a full perspective of how small incremental innovations change the way we live. My younger brother (we’re 8 years apart) had a completely different experience in school than the one I had. He’s born in the Google age so he never had to visit a library or consult an encyclopedia to write school papers. The difference between him and I is the 90s dot-com boom and a bunch of incremental improvements that together radically changed the way we access information and transformed a crippled fairly useless WWW into a de facto world wide web.

If you think about how you access information today, it’s amazing how most of the experience comes from small incremental improvements, probably in the form of apps. You don’t use real maps anymore because your phone has GPS (fairly old  technology by the way) and maps, you check your email on your phone, reserve a table at a restaurant, take photos on the go, sometimes you even think how it was possible to live without apps, let alone without a cell phone. It’s quite amazing and it’s a product of continuous small advances from people who thought they could improve your experience a little more, just like Google did when they looked at other search engines.

I’m not saying that radical disruptive innovation doesn’t happen. It does but a lot less frequently than you might think. Next time you think about that big innovation that changed your life, think better and try to check how many steps it took to make it happen and how radical each of those steps were. Probably not much.

Image: maple / FreeDigitalPhotos.net

Every time I try to register a domain name I come across the same problem - dozens and dozens of domain names that are taken with no apparent purpose other than blocking other people from getting them and maybe make some money out of it. And every time I rationalize, “It’s a free market, anyone can do it, they got there first”. This time around I even measured the ratios (see below).

However, this is not a free market. It’s actually a regulated market, where an official entity grants you the rights to a piece of real estate that only you can use. In the case of .com domains, that contract has no strings attached, which means that anyone can buy whatever they want for whatever purpose they want. 

The result is uncountable domain names that have no real content attached. In my country we say “either you do it or you get out of the way”, which the Americans brilliantly summarized in one word - cockblock (in the rare case you haven’t heard about it, you can check the definition here http://brnd.ws/rpqZSH). The vast majority of these domain hogs have no intention of ever building anything on that real estate. They just got there first and don’t want to get out of the way.

This reminds me an episode that happened to me when I was a kid. It was summer time and I thought a good way to make some extra money was to sell lemonade at the intersection close to my house. This intersection had a lot of traffic going by and long lines during rush hour, and it was summer and hot. I sold 2 jars in just a few minutes so I went back home to make more and come back to business. To my surprise, when I got back I had 3 bigger kids waiting for me to “inform me” that that intersection was “theirs” and I did not hold “rights” to sell anything there. Were they selling anything? No. But apparently they got there first and thought that was good enough.

I don’t even care much about this issue. At the end of the day I always come up with a new stupid name that no one has remembered to register yet. But that doesn’t mean it’s not annoying or wrong. If you’re buying the rights to a piece of real estate and then just sit there preventing others from doing something productive with it, you’re just being a parasite. And if you think you did something productive by coming up with those domain names, I’ll tell you that if my job was to register “interesting” domain names I could be ICANN’s best customer. It’s just that I have better things to do.

PS. The stats for my latest search were the following. Out of 200 names I tried (excluding obvious ones that I knew would be taken), 80% (157) were taken. Of those, only 9% had content and another 7% had advertisement (parked domain with no real content). The remaining (131) had zero content. In this search process, I registered 5 domains that I have no intention to use (and as a result will let expire). If you ever come across one of these and want them to build something, I’m happy to give them away.

Image: renjith krishnan / FreeDigitalPhotos.net