There’s a kind of principle in invention and innovation which goes like this – often the originator of new ideas and approaches is a kind of outsider, stumbling on a discovery by pursuing avenues others thought, through training, would be fruitless. Or at least this innovator pursues a line of research outside of the mainstream – where accolades are being awarded.
You can make too much of this, but it does have wide applicability.
In science, for example, it’s the guy from the out-of-the-way school, who makes the important discovery, then gets recruited to the big time. I recall reading about the migration of young academics from lesser schools to major institutions – Berkeley and the Ivy League – after an important book or discovery.
And, really, a lot of information technology (IT) was launched by college drop-outs, such as the estimable Mr. Bill Gates, or the late Steve Jobs.
This is a happy observation in a way, because it means the drumbeat of bad news from, say, the Ukrainian or Syrian fronts, or insight such as in Satjajit Das’ The Sum of All Our Fears! The Outlook for 2015, is not the whole story. There are “sideways movements” of change which can occur, precisely because they are not obvious to mainstream observers.
Without innovation, our goose is cooked.
I’m going to write more on innovation this week, detailing some of my more recent financial and stock market research under that heading.
But for now, let me comment on the “libertarian” edge that accompanies a lot of innovation, these days.
The new new peer-to-peer (P2P) “sharing” or social access services provide great examples.
Uber, Lyft, Airbnb – these companies provide access to rides, vehicles, and accommodations. They rely on bidirectional rating systems, background checks, frictionless payment systems, and platforms that encourage buyers and sellers to get to know each other face-to-face before doing business. With venture funding from Wall Street and Silicon Valley, their valuations rise a dramatic way. Uber’s valuation has risen to an estimated $40 billion, making it one of the 150 biggest companies in the world–larger than Delta, FedEx or Viacom. Airbnb coordinates lodging for an estimated 425,000 persons a night, and has an estimated valuation of $13.5 billion, almost half as much as 96-year-old Hilton Worldwide.
There are increased calls for regulation of these companies, as they bite into markets dominated by the traditional hotel and hospitality sector, or taxi-cab companies. Clearly, raising hundreds of millions in venture capital can impart hubris to top management, as in the mad threats coming from a Uber executive against journalists who report, for example, sexual harassment of female customers by Uber drivers.
Noone should attempt to stop the push-and-pull of regulation and disruptive technology, however. Innovations in P2P platforms, pioneered by eBay, pave the way for cultural and institutional innovation. At the same time, I feel better about accepting a ride within the Uber system, if I know the driver is insured and has a safe vehicle.