Incremental Innovation is Just As Powerful as Disruption

Peter Thiel and Gary Kasparov wrote in the Financial Times about “Our dangerous illusion of tech progress”. The main point of the article is quoted below:

[We are living in an era of] cautiousness far too satisfied with incremental improvements. Our ability to do basic things such as protect ourselves from earthquakes and hurricanes, to travel and to extend our lifespans is barely increasing [since the 1960s]. The genuine progress in IT from the 1970s up to the 2000s masked the relative stagnation of energy, transportation, space, materials, agriculture and medicine.

When Plodders Change the World

Thiel/Kasparov argue that we are collectively focused on incremental rather than transformative change. Coincidentally the following week week, Clay Christensen made a similar argument in the NYTimes

These arguments presume that efficiency gains never lead to transformative change. Like Thiel, I think Christensen undervalues efficiency innovations.

Combining efficiency innovations can lead to enabling innovations that create new industries. For example, coupling cheap computing with virtualization enabled cloud computing - a potentially $100B industry. Shannon, a research at Bell Labs, invented digital telephony, an incremental bandwidth usage improvement over analog transmission which ultimately enabled the Internet. The text message (SMS), a trivial innovation, is the banking mechanism over which 33% of Kenyan GDP flows.

Blue ocean opportunities like asteroid mining and commercial space travel will attract a certain type of personality. And efficiency innovations will attract another. There is room and a need for both. Though they pursue innovation in different ways, directly and indirectly, these entrepreneurs do change the world similarly.

Banging on the wrong pots and pans

While it may be true that an increasing number of people are focused on efficiency innovation as the field of entrepreneurship grows, the claim that we’re not pursuing significant problems is inaccurate.

Below is a list of advances made in various fields from a few Google queries. Significant innovation is occurring in fields like healthcare, transportation and agriculture.

Health
1. The average US lifespan has increased by 9 years (13%) since 1960.
2. The FDA just approved the first digital pill that monitors patients response treatments.
3. The cost of sequencing a genome has fallen by more than 4 orders of magnitude - much, much faster than Moore’s law.

Transportation
1. Google thinks it is five years away from productionizing self-driving cars.
2. The number of passenger miles flown in the US has increased by 18x since 1960 and jets have never been safer to fly. 3. Fatalities on US roads per capita has fallen by 80% since 1960.

Agriculture
1. Agricultural yields in the US have increased 250% for corn, 200% for wheat and soybeans, and 75%+ for barley and oats.

Right cause, questionable war-cry

There’s no doubt, we could always be aiming higher, funding research and new ideas to a greater extent, relaxing H1B visa restrictions or reducing barriers to entry for new companies.

To his great credit, Thiel is a contributor to this effort. He has many initiatives to finance progress: the Thiel fellows programs, his numerous investment vehicles and working with his colleagues from PayPal who have built SpaceX, Telsa, Yammer, LinkedIn and other disruptive companies.

But to question the progress and changes we’ve seen in the past 50 years and the innovations that we’re on the cusp of commercializing is a misleading way to build a groundswell. Even if the cause is laudable.

Published 2013-02-13 in


I'm a partner at Redpoint. I invest in Series A and B SaaS companies. I write daily, data-driven blog posts about key questions facing startups. I co-authored the book, Winning with Data. Join more than 18,000 others receiving these blog posts by email.

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