History is littered with smart people making horribly wrong calls about nascent markets. In the 1940s, IBM’s Thomas Watson (supposedly) said there was a world market for only five computers. In the 1970s, Digital Equipment’s Ken Olson said there was no reason why people would want a computer in their home–versus their office. And it was Microsoft’s Bill Gates who was reported to have said in the early 1980s that 640K should be enough memory for anyone. Regardless of whether or not these stories are apocryphal, they ring true because we misjudge early-stage innovation so often.
It’s nobody’s fault. Data tends to accrue and become obvious only after people have already taken action. Most people make their first-mile decisions inside what I call the “fog of innovation.” It’s easy to get lost in the fog and never make any decision at all, because a risk that doesn’t pan out tends to have more negative repercussions on a person’s career than risks not taken. Problematically, if you never make a decision, that only creates more room for disruptive upstarts and hungry competitors.
Worse, companies often face a mismatch between their innovation plans and the overall strategy that should be in place to support those plans. I remember distinctly a large company that proudly told me about how it got all of its most important executives to sit on an all-powerful innovation board that met every 90 days. “What if,” I asked, “the day after a meeting, the team discovers its entire strategy needs a wholesale revision?” Silence.