Building Blocks of Innovation

Where will the next big innovations in technology come from? Should the next generation of entrepreneurs build their companies on Facebook, like Zynga has, or on Apple, like so many app writers have?

My father read my post about disruptive vs. revolutionary innovation and offered his own observations about the nature of innovation. Each successive generation of products builds on the previous:

"Looking back over my many years of perspective, I tend to look at most innovation as an evolutionary integration of functions. Sort of a technological equivalent of one celled organisms evolving into multicellular life.

"When I was growing up, we built elementary circuits out of discrete components. Then along came Texas Instruments with the integrated circuit. Then medium and large scale integrated circuits. The evolutionary integration of circuits into functions and to entire systems, drastically changed the innovative landscape. Now it is possible to assemble complex products, like iPods and computers and HDTVs, from basic functional building blocks, rather than from scratch with discrete components. The same is true of software, since programmers now have entire libraries of code modules enabling them to quickly assemble sophisticated applications. Each year the "basic" building blocks become more sophisticated, enabling designers to build new innovative products as easily as an imaginative child playing with Legos.

"It is true that there is innovation at the component level. Physics has made it possible to build cheaper and progressively denser magnetic storage media, as well as semiconductor memories and solid state drives. Basic logic circuits have evolved into common quad-core processors. Optics have progressed from filament bulbs and CRTs, to LEDs and OLED displays. And all of these have become the basic building blocks that modern day innovators have to play with. In industry, I have seen that there are innovators with brilliant ideas, just waiting for the right building blocks (at the right price) to make their dreams come true."

Facebook as Building Block of the Social Web

To take Facebook as an example, the social media platform relies upon software languages that compile into operating system-specific machine instructions that run on computing hardware. The social network further relies on the backbone of the internet, which in turn relies on networking hardware, data transfer protocols and more.

If Facebook becomes the operating system of the social web, it will succeed in becoming a building block for future businesses.

Interestingly, most of the building blocks of Facebooks innovation are based on open standards. Although there are components in the system that are controlled by near monopolies -- like Intel in CPUs -- most are open.

Building on vs. Building Within

It's tempting to conclude that building atop a closed platform may be profitable in the short term, but the next big leaps are more likely to come from open standards, independent of the control of any one company. But that's a little bit simplistic.

Building on top of a ubiquitous platform should be a fine strategy. Building entirely inside of it is likely to be a bad move. For example, as Zynga grew in popularity, it worked to establish its own customer base and connections outside of Facebook, to reduce its dependency.

Internet companies like Facebook are building programming interfaces that allow other companies to treat them as building blocks. Their long term success depends on becoming indispensable pieces of future innovations that go far beyond what we have today.



Related posts:

Disruptive vs. Revolutionary Innovation
What's the Recipe for Innovation?
Product Innovation and Behavioral Economics