Scale of Innovations vs. Scale of Markets

Some savvy comments from Silver Lake’s Roger McNamee on the perceived decrease in the amount of innovation in the technology world. Granted, most readers of this blog immersed in the Web 2.0, Ajax, Greasemonkey, tagging & open source memes won’t have any idea how someone could argue that innovation is absent; but among venture capitalists it is accepted “wisdom” that the world of software has changed and there aren’t many venture-centric categories. Venture folks are wrong, of course, but as McNamee implicitly argues you can’t take the same approach to deploying capital in software as you did ten years ago:

Innovation & Start-ups, Part 1
From time to time, people express to me their concern about the state of innovation in the technology industry.  Many people worry that the pace of innovation has slowed and that there won’t be many great start-ups.  I don’t buy it. 
In my experience, the rate of technology innovation remains fairly constant.  What changes is the scale of the markets enabled by that innovation.  We are still emerging from the post-Y2K nuclear winter of technology spending by enterprises, and the most compelling recent tech products have targeted consumers.  Several of these came from established companies (e.g., iPod, Motorola RAZR), which contributes to the worries about the opportunity for start-ups
If you are unhappy that it’s no longer possible to make millions with nothing more than a Powerpoint pitch and a URL, then I can’t help you.  What I can do, however, is point to a few of the business opportunities on my radar. 
A few major themes that entrepreneurs can leverage:

  • Time: No one has enough of time.  Saving it and making the most of it are key drivers of consumer purchases today.  Google and Blackberry save time.  Portable music, DVD, and game players enable higher quality activities in limited time. 
  • Full Duplex Automation: Most services on the web are automated on the provider side, but require lots of effort by the end user.  What I want is services that are automated at BOTH ends: full duplex automation.  My two favorite examples are MyYahoo and TiVO.  You program them once and they work for you forever. 
  • Universal authoring: It’s astonishing how many devices exist today that enable consumers to create content.  The tools for managing that content are still pretty lame. 

  • As a sidenote, it is interesting to attach names to some of the ideas McNamee puts forward. For example, I would happily see Platypus become a next-gen example of the sort of thing McNamee describes in “full-duplex automation” above. Granted, it has a long way to go, but the idea of integrated client-side automation of server-side technologies is too important to dismiss.