The Perils Of Extrapolation: Who Knows What The Next Disruptive Innovation Will Be

from the be-quick-to-adapt dept

There are all sorts of "lessons" that you hear concerning entrepreneurship, but the one that has always struck me as being the most reasonable and valuable is:
Be adaptable
People who haven't built a company think that it's "the plan" or "the idea" that matters. That's almost never the case. Look at nearly every successful startup, and their business has little (if anything) to do with their initial plan. Google was going to sell search appliances as the core of its business. YouTube was supposed to be a dating service. Things change -- and the only thing that matters is how well your company adapts and executes. That's why it's silly to be too protective of a plan or idea or to focus on things like patents or NDAs. Most of that doesn't matter. Separately, projecting out more than a year may be a fun exercise, but is generally meaningless.

Clay Shirky had a great Twitter message this past weekend that puts that point into perspective nicely:
Why I ignore all "5 year plans": 5 years ago, YouTube and Twitter didn't exist, and Facebook was only for college kids
If you go back and look at plans or predictions from 2005, of where web content would be in 2010, it's unlikely that "micromessaging" like Twitter or online video like YouTube was considered quite as central. Certainly some folks thought video was on the cusp back then, but they expected it to come from professional offerings like BrightCove, rather than a user-generated setup like YouTube. It's always difficult to predict which innovation is actually going to hit -- and plenty of companies, especially in the media space, have had to change and adjust their strategies due to things like Twitter, YouTube and Facebook -- just like how a decade ago, companies quickly started adjusting their strategy to deal with Google. Five years from now, plenty of startups will be adjusting their strategy for some other service as well... And the only way you can do that is by being adaptable.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Ima Fish (profile), Oct 21st, 2009 @ 5:19am

    Microsoft started off creating computer languages.

    Intel intended to sell chips to calculator manufacturers.

    Apple started as a computer company. Yep, they were actually highly successful in selling shiny computers that sat on your desk.

    And believe it or not, Sony once made high quality and useful consumer electronics that people actually wanted to buy. I still think their current model of pissing on customers will fail in the long run, but, maybe they'll prove me wrong one day.

     

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  2.  
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    Anonymous Coward, Oct 21st, 2009 @ 5:24am

    and while youtube, twitter, and facebook are great and wonderful technologies, twitter is still in the red, facebook allegedly just got into the black, and youtube is allegedly far in the red.

    your "rule" only works in industries where a startup can easily rock the boat. walmart, home depot, at&t, comcast, and most of the rest of the fortune 500 can ignore your rule.

     

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  3.  
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    Anonymous Coward, Oct 21st, 2009 @ 5:30am

    Not really fair to say "YouTube started as a dating site." More accurately, the founders first tried to do a dating site before failing and having the idea for YouTube.

    A better example is Flickr starting as a massively multiplayer game until they realized that the photo-sharing was way more fun than their game.

     

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  4.  
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    Anonymous Coward, Oct 21st, 2009 @ 5:34am

    The other half of the deal is not to get caught up in fads. It is easy in the moment to think of something like twitter as the greatest thing ever, a true reveolution. The reality is that 140 characters, just like 640k, ain't enough in the long run.

    Once again, Mr Shirky is doing what all guru types do best, attempting to take what just happened and say "see, I told you!"

     

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  5.  
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    Griff (profile), Oct 21st, 2009 @ 5:39am

    Decentralisation

    Most of the biggest innovations recently will drive the next.
    For example the "next big thing" will be talked about in facebook and on Twitter.

     

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  6.  
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    Nick Coghlan, Oct 21st, 2009 @ 5:42am

    "People tend to overestimate how much things can change in a year, but dramatically underestimate how much they can change in a decade". I don't remember where I heard that quote, but it is something that has rung true for me ever since.

    @Ima Fish: Sony do still make good consumer electronics (the Bravia is a sweet piece of hardware). It's just unfortunate that the hardware guys get tarred with the bad feelings provoked by the loud mouths on the "content" side.

     

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  7.  
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    Yosi, Oct 21st, 2009 @ 5:42am

    Twitter? Facebook? Who the hell are they?

    All those are not-really-profitable, producing-nothing fashion-driven oddities.
    YouTube is a little better, since it actually provide somewhat useful service, but again, not profitable, which meaning it's not really a business.

    Any _really_ disruptive innovation takes 10+ years to make a difference. Look at CCD vs. film cameras. Look at flash memory vs. magnetic disks. Look at MP3 vs. tapes.

    Any half-decent ASIC takes about a year to develop + another year to bring to production.

    Always funny to read people who call stupidity like twitter "disruptive technology". Calling it "technology" is insult for people who actually know what the word means.

     

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  8.  
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    NullOp, Oct 21st, 2009 @ 5:48am

    Yep!

    I gotta agree with Yosi. If it ain't making money, it ain't a business. Twitter is hardly a milestone technology. Its broadcast SMS for your PC and that's it. As for business plans, the market will have it's say on that!

     

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  9.  
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    Mark Essel, Oct 21st, 2009 @ 5:54am

    Perception and adaption, the core attributes of modern innovators

    yes, yes, and YES! What begins as a nascent concept is continually and iteratively altered by user feedback and external changes. After a time the size of a business inhibits the early agility enjoyed by the founders.

     

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  10.  
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    Richard (profile), Oct 21st, 2009 @ 5:54am

    Re:

    and Viagra was a heart drug...

     

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  11.  
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    imbrucy (profile), Oct 21st, 2009 @ 5:55am

    Whether or not YouTUb is profitable isn't known. Yes the accepted idea is that they are a loss leader for Google, but don't be so sure. Google has never been up front about YouTube's profit and it wouldn't suprise me if they were actually quite profitable.

     

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  12.  
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    lulz, Oct 21st, 2009 @ 5:57am

    Re: Twitter? Facebook? Who the hell are they?

    Calling it "technology" is insult for people who actually know what the word means.

    After sifting through your sickening level of pretentiousness,
    I see that you have a good point. It's not a technology so much as it is a simple idea implemented with existing technology.

     

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  13.  
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    Overcast (profile), Oct 21st, 2009 @ 5:58am

    Maybe it will be software that can cure cancer - they would then get sued because of 'Intellectual Property' rights of the Cancer Society - saying that no one else has the right to attempt to cure cancer, as it was their idea.

    Then other companies who make devices for Chemotherapy would also sue, saying that the software is putting poor Chemo workers out of jobs.

    You know it would be true. Even if it was something as noble as curing cancer. Can't disrupt corporate profits - that's akin to heresy in the religion of money.

     

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  14.  
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    zenith (profile), Oct 21st, 2009 @ 5:58am

    "If it ain't making money, it ain't a business"

    Alternatively, how about the saying I've just made up;

    "if it's worth something, it's made money"

     

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  15.  
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    Richard (profile), Oct 21st, 2009 @ 6:02am

    Re: Twitter? Facebook? Who the hell are they?

    All those are not-really-profitable, producing-nothing fashion-driven oddities.
    YouTube is a little better, since it actually provide somewhat useful service, but again, not profitable, which meaning it's not really a business.


    You are missing the point here. The point was that things often turn out to be useful for something other than the original intention - so trying to stick to that original intention may be a bad plan.

    The Buddha wanted to found a religeon for India but was actually successful (against expectations) in Japan.

    John Harrison wanted to make a marine clock that would be accurate. He expected that bigger would mean more accurate. Then he made a watch to tranfer the "time" from the hold of the ship to the deck. He then found the wathc was better than his big clock.

    There are loads of examples of this in history. Don't knock the idea just because the examples given don't fit a particular (rather narrow) idea of what constitutes "success".

     

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  16.  
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    Anonymous Coward, Oct 21st, 2009 @ 6:12am

    blockbuster video was number one, nobody could compete even with BB limiting to no NC-17 movies. It was taken down by something completely different, Netflix, which is also having it's own problem with something completely different, redbox.

     

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  17.  
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    Chronno S. Trigger (profile), Oct 21st, 2009 @ 6:14am

    Re: Re: Twitter? Facebook? Who the hell are they?

    "it is a simple idea implemented with existing technology."

    Aren't all things?

     

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  18.  
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    Ima Fish (profile), Oct 21st, 2009 @ 6:16am

    Re: Re:

    And the active ingredient in Rogaine was intended to treat high blood pressure.

     

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  19.  
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    Jon, Oct 21st, 2009 @ 6:26am

    Re:

    Of course, Mike isn't talking about technologies like Twitter, YouTube, and Facebook as being financially successful. He's talking about them in terms of how their technology enables other businesses to communicate with customers.

    Also, since his article is littered with words and phrases like "entrepreneurship", "built a company", and "startup", it seems clear that he's not focused on how the Fortune 500 run their already-established businesses. But even then, Fortune 500 companies are wise to adapt to new technologies like this, so that they appear as agile and adaptable in this world where perception shapes reality. For example, can you imagine if Fortune 500 companies didn't advertise on the web these days? A decade ago, they may not have, but they adapted.

     

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  20.  
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    Yosi, Oct 21st, 2009 @ 6:46am

    Re: Re: Twitter? Facebook? Who the hell are they?

    Exactly.

    Not every new thing you have is "technology". There's lot of words in English language to describe things.
    Calling (no matter how complicated) python script a "technology" just show how clueless writer is.

     

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  21.  
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    Yosi, Oct 21st, 2009 @ 6:49am

    Re: Re: Re: Twitter? Facebook? Who the hell are they?

    Not at all.

    Some things are new. It's called "scientific breakthrough". Transistor is not "simple idea" implemented with vacuum tube (existing technology).
    Software (as a concept) is new idea, or technology. But not any particular program.

    Sorry to break it on you, but algorithm (no matter how smart) is not a technology. It is mathematical expression. Ferma theorem is not a technology either.

     

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  22.  
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    Jon, Oct 21st, 2009 @ 7:08am

    Re: Yep!

    Most businesses don't make a profit immediately. Some don't even pay their employees right away. They're still "businesses". The phrase you're looking for is "financially successful business". Twitter, YouTube, etc. may indeed fail eventually if they don't bring it the bucks, but for the moment they're definitely "in business". I mean, what would you call them... hobby projects?

    And as for Twitter, just because something is simple doesn't mean it's not important. The wheel is simple, yet was unquestionably a major milestone. As another example, sliced bread is just bread sliced up and put in a bag, and yet it definitely changed people's lives.

    You're right that the market will have its say on a particular company's business plans, but which market segment? Perhaps YouTube will never turn a profit by advertising to individual users, but it could still be successful if other businesses pay it to host video. It's so ubiquitous, that for many businesses it just doesn't make sense to reinvent the "web video" wheel. That is value.

    And frankly, the whole "this is technology, this isn't technology" argument is very narrow-minded. These days, we can just assume a hardware framework upon which software operates. It makes no sense to say that hardware is technology and software isn't, because the distinction is increasingly meaningless as software pushes across a variety of hardware platforms. Using Twitter, a person can communicate their current activity to a collection of interested readers, via their phone, or their laptop, or their desktop, or whatever. A technology, in this sense, is defined by what it enables the user to do.

     

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  23.  
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    Jon, Oct 21st, 2009 @ 7:24am

    Re: Re: Yep!

    Hell, milestones were just rocks placed at regular intervals along a road, and yet they were undeniably a milestone. ;)

     

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  24.  
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    Yosi, Oct 21st, 2009 @ 7:31am

    Re: Re: Yep!

    >> It makes no sense to say that hardware is technology and software isn't

    This, my friend, is utter bullshit. You can't call any particular program "technology". In same way you can't call any new car model "technology".
    "Car" is technology (as a concept). Software (again, as a concept) - too.

    Technology is not defined by what it enables to do - where did you get this nonsense from?
    Technology defined by what it is, like many other things.

    >> as software pushes across a variety of hardware platforms
    I guess you have no idea about none of above. That's OK, ignorance is a bless.

     

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  25.  
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    Anonymous Coward, Oct 21st, 2009 @ 7:41am

    The Dogma of Adaptation

    But then, how much money do businesses waste on every little trendy fad that comes along? The fads are promoted by 25-year-old MBAs demanding their high consulting fees, but more often than not, the fads turn out to be just that.

     

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  26.  
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    Whitney McNamara (profile), Oct 21st, 2009 @ 7:47am

    @Nick Coghlan I've most often seen the year/decade quote attributed to Anthony Robbins (though it was formulated as individuals under- and over-estimating what they personally could do in a year and decade).

    I'd also toss in the classic Eisenhower quote here: "I have always found that plans are useless, but planning in indispensable."

     

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  27.  
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    OneDisciple, Oct 21st, 2009 @ 8:24am

    Re: Re: Re: Yep!

    Yosi, have you looked at a Dictionary? The technology of the internet is beautiful.
    Dictionary.com
    tech·nol·o·gy (těk-nŏl'ə-jē)
    n. pl. tech·nol·o·gies

    1.

    1.

    The application of science, especially to industrial or commercial objectives.
    2.

    The scientific method and material used to achieve a commercial or industrial objective.
    2.

    Electronic or digital products and systems considered as a group: a store specializing in office technology.
    3.

    Anthropology The body of knowledge available to a society that is of use in fashioning implements, practicing manual arts and skills, and extracting or collecting materials.

     

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  28.  
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    Jon, Oct 21st, 2009 @ 8:24am

    Re: Re: Re: Yep!

    Since I'm going to refer to Merriam Webster in my responses below, I'll just link to it up-front:

    http://www.merriam-webster.com/dictionary/technology


    >> This, my friend, is utter bullshit. You can't call any particular program "technology". In same way you can't call any new car model "technology".

    I wasn't calling a particular program "technology". When I referred to Twitter, I was talking about the concept which their service is based upon: giving a user the ability to broadcast information to a variety of readers. I think this falls neatly into definition #2 of technology, from the MW link above.

    >> Technology is not defined by what it enables to do - where did you get this nonsense from?

    So, I guess you can tell that I got that "nonsense" from a dictionary? Merriam Webster seems like a reliable source to me.

    >> Technology defined by what it is, like many other things.

    You shouldn't define something by saying that "it is what it is". Not helpful.

    >> I guess you have no idea about none of above. That's OK, ignorance is a bless.

    I don't know how you can take "software pushing across a variety of platforms", and draw the conclusion that I'm ignorant. My point was that something like Twitter can be counted as a technology because the particulars of the implementation hardly matter, since both the hardware and software are mutable. Twitter (the corporation) could go out of business tomorrow, but someone else would just take their technological concept and continue on (disregarding legalities). I'm calling their *idea* technology, not a particular Twitter program.

     

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  29.  
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    chris (profile), Oct 21st, 2009 @ 9:10am

    Re:

    your "rule" only works in industries where a startup can easily rock the boat. walmart, home depot, at&t, comcast, and most of the rest of the fortune 500 can ignore your rule.

    startups are not fortune 500 companies. that is why they are called startups. they are just starting up.

     

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  30.  
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    Matt S (profile), Oct 21st, 2009 @ 9:30am

    Extrapolating

    Another danger of extrapolating:
    http://xkcd.com/605/

    Don't forget to mouse over the image to see the extra message.

     

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  31.  
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    CastorTroy-Libertarian, Oct 21st, 2009 @ 9:31am

    Re: Re: Re: Yep!

    ok , yep to you its not technology, but the rest of society views it as such, guess your just not that adaptive to the market place...kinda the point really, thanks for making it

     

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  32.  
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    chris (profile), Oct 21st, 2009 @ 9:48am

    Re: Twitter? Facebook? Who the hell are they?

    All those are not-really-profitable, producing-nothing fashion-driven oddities.
    YouTube is a little better, since it actually provide somewhat useful service, but again, not profitable, which meaning it's not really a business.


    i agree. if you aren't making money on day 1 then you should kill yourself. all of you small startups need to get a life.

    Any _really_ disruptive innovation takes 10+ years to make a difference. Look at CCD vs. film cameras. Look at flash memory vs. magnetic disks. Look at MP3 vs. tapes.

    couldn't agree more. innovation can only be had in hardware, and never with software, and on the web? PUH-leaze. web pages are toys. real men program in assembly on bare metal.

    Any half-decent ASIC takes about a year to develop + another year to bring to production.

    i know, right? that's like 2 years. which anyone with an ounce of sense knows is waaay more than that 5 year nonsense in the original post.

    Always funny to read people who call stupidity like twitter "disruptive technology". Calling it "technology" is insult for people who actually know what the word means.

    amen brother. ever notice how they all seem to stand around on your lawn too?

     

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  33.  
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    Mike Masnick (profile), Oct 21st, 2009 @ 10:39am

    Re: Twitter? Facebook? Who the hell are they?

    All those are not-really-profitable, producing-nothing fashion-driven oddities.

    And yet still disruptive for media-based startups. But why let that interfere?

    Any _really_ disruptive innovation takes 10+ years to make a difference. Look at CCD vs. film cameras. Look at flash memory vs. magnetic disks. Look at MP3 vs. tapes.

    Heh. Keep believing that. I wish you the best of luck as a late adopter. Sure, some technologies take a while, but there is plenty of disruptive innovation that happens faster than 10 years (Google?).

    Always funny to read people who call stupidity like twitter "disruptive technology". Calling it "technology" is insult for people who actually know what the word means.

    Ok. While you focus on meaningless definitions, people will actually focus on what's happening in the market. Luckily, the market doesn't care what you think "technology" is, but does recognize when something is disruptive.

     

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  34.  
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    Anonymous Coward, Oct 21st, 2009 @ 11:22am

    Re: Re: Twitter? Facebook? Who the hell are they?

    Twitter isn't disruptive, it is a distraction.

    Remember, there ain't no twitter without some twits.

     

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  35.  
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    Derek Kerton (profile), Oct 21st, 2009 @ 11:30am

    Re:

    How old are you? Walmart WAS a 'startup' once. The "big box" idea was an innovation that turned the retail business on its head.

    The New AT&T is dominated by the wireless business, which barely existed back in 1995. AT&T was basically re-bought by its own baby-bell spin-offs and a wireless operator. The former "Crown Jewels", the cash-cow long-distance business, is now dead.

    Perhaps it's not a 5 year cycle in brick and mortar business, but how many local hardware companies, fishing shops, lumber yards, and smaller wireless operators have been killed/displaced/obviated/absorbed by Home Depot, Walmart, and the new AT&T?

    Those companies themselves looked very different 10 years ago. Home Depot is now in tough financial times and is struggling to adapt to a weaker housing market, AT&T has entered cable-like TV service, but that very market is being threatened by Internet delivered content. Walmart is threatening AT&T with a cheap cellular service.

    Walmart has benefited from the recession, but must adapt its strategy as a result: http://www2.journalnow.com/content/2009/jun/24/play-for-keeps-wal-mart-is-redesigning-most-stores/bu siness/

    If you think those big firms don't need to adapt, then you just aren't paying attention.

     

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  36.  
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    Richard (profile), Oct 21st, 2009 @ 11:38am

    Re: Re: Re:

    and Christopher Columbus was trying to get to India.

     

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  37.  
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    Derek Kerton (profile), Oct 21st, 2009 @ 11:42am

    Re:

    RE: Sony...and proprietary formats

    RE: Change...wasn't it 5 and 10 years? Paul Saffo?

     

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  38.  
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    Derek Kerton (profile), Oct 21st, 2009 @ 11:46am

    Re: Re: Twitter? Facebook? Who the hell are they?

    "simple idea implemented with existing technology."

    That's what most great ideas/businesses/products/services are.

    Not to denigrate technology, but it is much less important than Yosi makes it out to be. Working with startups in Silicon Valley, I've seen far too many cases of great technology that simply lack that "simple idea" of how they will actually be used by people.

    Technology needs a good implementation idea. Good implementation ideas need good technology.

     

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  39.  
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    Anonymous Coward, Oct 22nd, 2009 @ 12:43pm

    Re:

    And believe it or not, Sony once made high quality and useful consumer electronics that people actually wanted to buy.

    Yeah, I used to really like their products. I scorn them now.

     

    reply to this | link to this | view in thread ]

  40.  
    identicon
    Anonymous Coward, Oct 22nd, 2009 @ 12:46pm

    Re: Re: Re: Re:

    and MTV started as a music channel.

     

    reply to this | link to this | view in thread ]

  41.  
    identicon
    Anonymous Coward, Oct 22nd, 2009 @ 12:52pm

    Re: Re: Re: Twitter? Facebook? Who the hell are they?

    "it is a simple idea implemented with existing technology."
    Aren't all things?


    Not at all, although I can understand how even rocket science might appear "simple" on the surface to those with no knowledge of it.

     

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  42.  
    identicon
    Anonymous Coward, Oct 22nd, 2009 @ 12:54pm

    Re: Re: Re: Twitter? Facebook? Who the hell are they?

    That's what most great ideas/businesses/products/services are.

    One of my favorite examples: "pet rocks".

     

    reply to this | link to this | view in thread ]

  43.  
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    Teeshur (profile), Oct 29th, 2009 @ 9:42pm

    facebook site maintenance

    Oct. 29, 2009 Could not log in all day to FB. Error message says site maintenance. Any one help?

     

    reply to this | link to this | view in thread ]

  44.  
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    Mark Proffitt (profile), Nov 5th, 2009 @ 10:06pm

    How to Predict Future Innovations

    It is possible to accurately predict future innovations. This video briefly covers one part of using the Predictive Innovation Method to reveal what will be the next big thing.

    http://www.youtube.com/watch?v=ga-Km7nZMUg

     

    reply to this | link to this | view in thread ]


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