by Mike Masnick
Mon, May 19th 2008 12:58pm
In our debates over the patent system, one message is repeated over and over again by those defending the patent system: that it's needed to prevent big companies from coming in and stomping out smaller companies. Unfortunately, the evidence just doesn't support this. Yes, it does happen sometimes, but there are so many examples of smaller companies outrunning bigger companies that the idea that a big company can easily beat a smaller company is just rubbish. In fact, the NY Times now is running an article noting how no large tech company has ever really been able to thrive through multiple generations of technologies. A smaller, more nimble "game changer" comes along and out-innovates the larger company -- in many cases because that larger company isn't just slow to react, but also because they have legacy lines of business that prevent them from fully embracing the cannibalizing nature of disruptive businesses. Once again, this highlights the the importance of the process of innovation, rather than just the idea. The big company with lots of money may get "the idea," but if it can't full embrace it, it won't do a very good job implementing it. So, while big companies do have some advantages, it's a clear myth that any big company can step in, take a smaller company's idea, and succeed with it. Microsoft outran IBM. Google outran Microsoft. Netflix outran Blockbuster. YouTube outran Google (and then got bought by it). The list goes on. Being smaller doesn't mean you can't win against a larger player if you do a better job providing what customers really want.
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