Does innovation win?

innovation

Innovation is often praised and discussed as something that we should be aiming for, something that is always valued, but is that really the case? Are real innovations rewarded?

Let’s start by looking at some real innovators and what happened to them.

Alan Turing

Alan Turning basically invented the computer and helped the allies win WWII. Without him life as we know it would be very different. He comitted suicide in 1954 at 41, having been chemically castrated by the UK govt and had roughly £10k (in today’s money) to his name.

Gary Kildall

Gary Kildall created the first operating system for personal computers, over 10 years before Bill Gates (see below) did his legendary deal with IBM. He died, reputedly as an alcoholic, following a brawl in a biker bar. He was worth $1.2m, which is a decent amount of money, but pales into comparison with Bill Gates, who simply monetised an operating system

Nikola Tesla

Nikola Tesla invented the AC electrical system, the predominant electrical system used across the world. Tesla spent the last years of his life living in a New York hotel, feeding (and he claimed communicating with) the pigeons outside. He died after being hit by a car on one of his outings to the pigeons. It was two days before his body was discovered in his room. His net worth at the time was $1,000. 

OK…. but it can’t be all bad for innovators, can it?

Let’s look at some more financially successful innovators 

Tim Berners Lee

Tim Berners Lee invented the World Wide Web, without him you wouldn’t be reading this. His current net worth is around £45m…. Now that is a lot of money and more than anyone needs in their lifetime, but when you consider how much others have made off the back of his creation it seems a little unfair. 

Alexander Graham Bell

Alexander Graham Bell invented the telephone, which even pre-internet changed communication and life across the globe and paved the way for the globally linked world we see today. His net worth was around $700,000, which is substantial, but not an equal reward to the contribution he made to peoples’ lives. 

So who gets all the cash?

The truth is, it’s not the innovators, it’s the savvy operators

Bill Gates

Bill Gates made the “deal of the century” by licensing a personal computer operating system to IBM… and he didn’t even build it, he bought, for a rumoured $50k. There’s no doubt that Bill is a great businessman and apparently a good programmer too. His vision, which was often laughed at at the time, of a computer in every home changed the way that we live today, but is he really an innovator?

Elon Musk

Last week Elon Musk overtook Bill Gates to become the 2nd richest man in the world (even though those figures are largely irrelevant, because neither can turn their net worth into cash… but that’s another article). Elon Musk insists he is the founder of Tesla, and even paid for a court judgement to back up this claim, but the company was in fact founded by Martin Eberhard and Marc Tapping. Musk was a series A investor, who has undoubtedly driven the company forward amazingly and is a PR Guru (cars in space!), but is someone who uses a real innovator’s name and a company started by others.

Larry Page and Sergei Brin

Unlike Elon, Larry and Sergei really did found google and develop the algorithm. They changed the way that we used the world wide web and changed the way advertising works. However, what they really did is make Tim Berners Lee’s creation a bit more user-friendly. For this they are now worth $65bn. Compare that to Tim Berners Lee and you see the innovator does not get the bulk of the spoils. 

Jeff Bezos

At the time of writing Jeff Bezos is the world’s richest man. You could say that all he has really done is taken the home shopping catalogue and put it online, and that’s true… he’s just done it really really really really well. He wasn’t the first person to sell things online, he didn’t invent the credit card, the internet or vans to deliver products to your house. He took things that existed and made them work.

My point here is not to be disparaging about the four businessmen above. They have clearly achieved huge amounts and are incredibly smart people. My point is to show that from a financial perspective real innovation is under-rewarded and execution is key.

I want this to inspire people. Too many people think they need to have a great idea. You don’t. Turing, Kildall and Tesla had great ideas, and look what happened to them. Meanwhile Amazon is a great website, but not really a great idea. Electric cars were around long before Tesla, but Tesla does them a whole lot better. A mediocre idea well executed will always beat a brilliant idea badly executed and quite often really great ideas are simply too new to be understood by most people. 

There are famous stories such as Western Union rejecting an offer to buy the patent on the telephone claiming it had “no commercial possibilities”, and Blockbuster’s CEO publicly claiming that “Netflix isn’t even on the radar screen in terms of competition”. People use these stories to say that Western Union and Blockbuster were wrong, because “look at what happened!”, but hindsight is always 20-20. If people who are involved in an industry can’t see the potential in something because it’s just too new, what are the chances that an average person in the street will understand the innovation? If the average person can’t understand it, what chance does the idea have of being a success?

A saying I heard at a conference a few years ago that has stuck with me is “Pioneers get shot by Native Americans, be second”. This is right, and when Ricky Bobby said “if you ain’t first you’re last” he was wrong!!

You don’t need to be first to be successful, you don’t even need to be radically different, you shouldn’t be. You just need to do things well and make your customers’ lives a little bit better.