Innovation is a Process, not a Destination

by on October 10, 2006 · 22 comments

Here’s another example where the the theory that startups and platform companies need intellectual property to do business doesn’t seem to apply. I just noticed today that MapQuest has unveiled a beta of an ajaxy web-based map feature. They’ve basically copied Google Maps, which I raved about last year. It appears that Yahoo! Maps also recently unveiled a clone of Google’s map interface. Microsoft and Rand McNally appear to still be behind the times.

I’m very surprised that it’s taken them this long. The concept behind Google’s draggable maps is not complicated. Indeed, a lot of the code is right there in the page source, where anybody can look at it. Writing the server-side code to support it isn’t trivial, but it’s hardly a mammoth undertaking. It’s possible that the problem was that it requires beefier servers (or better load balancing, or whatever) to handle the increased load from serving up more images, but this is Microsoft, Yahoo, and AOL we’re talking about. If anyone has the resources and know-how to build scalable web sites, it ought to be them.

What does this have to do with the startups and IP issue? It seems to me that this is a perfect test case of his hypothesis that companies can “simply take any ideas revealed and implement them.” There was very little mystery, in the abstract, about how Google’s mapping feature worked. Yet it took two of the deepest-pocketed companies in the computer industry 20 months to implement the idea, and a third is still working on it. In Internet terms, 20 months is forever. Mapquest has been bleeding tech-savvy customers like me that whole time.

What I think is going on (and this is a guess–I’d be interested in other hypotheses from readers) is that it’s often very difficult to replicate innovation from the top down. The software development process at big companies tends to get slowed down by bureaucracy, and as a result it’s slow and expensive.

What this means is that even a small company with no intellectual property at all will have substantial bargaining power over a large company facing a decision about whether to build or buy a particular bit of technology. They can build it themselves, but that’s likely to take a couple of years and cost millions of dollars. More importantly, a company that’s copying the innovations of others will always be a step behind. They can copy this year’s latest innovation, but by the time they release it the state of the art will have moved beyond that point. A company that imitates rather than innovating will never be on the cutting edge.

I should mention that I’m mostly ripping off Mike Masnick, who has argued for years that innovation is a process, not a destination. The reason a big company buys a smaller, more innovative one isn’t because they want to get their hands on any given bit of technology. Rather, they buy a company because they believe the company will help them stay on the forefront of innovation going forward. That’s equally valuable with or without intellectual property rights.

Update: It looks like Yahoo Maps actually released an interactive map last year. I don’t use Yahoo’s map site so I didn’t notice. On the other hand, Yahoo appears to have cheated by implementing their interactive map with Flash rather than with ajax. Flash has more overhead and doesn’t integrate with other browser features quite as cleanly. So it appears that only MapQuest has managed to replicate Google’s specific technique, and it took them almost two years to do so.

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About Tim Lee

Timothy B. Lee (Contributor, 2004-2009) is an adjunct scholar at the Cato Institute. He is currently a PhD student and a member of the Center for Information Technology Policy at Princeton University. He contributes regularly to a variety of online publications, including Ars Technica, Techdirt, Cato @ Liberty, and The Angry Blog. He has been a Mac bigot since 1984, a Unix, vi, and Perl bigot since 1998, and a sworn enemy of HTML-formatted email for as long as certain companies have thought that was a good idea. You can reach him by email at leex1008@umn.edu.

Read more articles by Tim Lee.

  • http://weblog.ipcentral.info/ Noel Le

    Of course you try to pick apart an argument by applying it as a universal theory to a situation that differs from its economic model, and this even after my lesson to you that theories of innovation are industry, and probably, technology specific.

    it’s often very difficult to replicate innovation from the top down. The software development process at big companies tends to get slowed down by bureaucracy, and as a result it’s slow and expensive.

    You argue that MS and everyone else could have copied Google’s maps, but that they spent tons trying to be original, and that somehow this is a general reflection on small vs big firms in their innovating ability. But first you should ask how much of a priority are maps to the varous companies cited. What do they spell for bottom line profits. If a product is really important to a company, its going to focus more on it, and make it that development more efficient, right? With MS, they’re probably working on more than just a map, also peripheral applications to go along with. It might be easier to study Google’s technology, but in terms of maintaining interop between their products, MS would build a map inside the company.

    even a small company with no IP at all will have substantial bargaining power over a large company facing a decision about whether to build or buy a particular bit of technology.

    You take a leap here. Even if big firms are hierarchical, bureaucratic, slow and waste money, do they lose any real advantage to smaller firms. But I’ll roll along. Basically, IP becomes moot to your argument though. Take IP out of the equation, and your view doesn’t really change. What you are saying is simply that smaller firms will be nimbler.

    I believe Masneck’s argument is that innovation occurs as BOTH destinations and processes. With the Internet, there’s a lot of focus on how it improves distribution and collaboration, so there we’re talking about process innovation. Personally, I consider FOSS an innovative process.

  • http://weblog.ipcentral.info/ Noel Le

    Of course you try to pick apart an argument by applying it as a universal theory to a situation that differs from its economic model, and this even after my lesson to you that theories of innovation are industry, and probably, technology specific.

    it’s often very difficult to replicate innovation from the top down. The software development process at big companies tends to get slowed down by bureaucracy, and as a result it’s slow and expensive.

    You argue that MS and everyone else could have copied Google’s maps, but that they spent tons trying to be original, and that somehow this is a general reflection on small vs big firms in their innovating ability. But first you should ask how much of a priority are maps to the varous companies cited. What do they spell for bottom line profits. If a product is really important to a company, its going to focus more on it, and make it that development more efficient, right? With MS, they’re probably working on more than just a map, also peripheral applications to go along with. It might be easier to study Google’s technology, but in terms of maintaining interop between their products, MS would build a map inside the company.

    even a small company with no IP at all will have substantial bargaining power over a large company facing a decision about whether to build or buy a particular bit of technology.

    You take a leap here. Even if big firms are hierarchical, bureaucratic, slow and waste money, do they lose any real advantage to smaller firms. But I’ll roll along. Basically, IP becomes moot to your argument though. Take IP out of the equation, and your view doesn’t really change. What you are saying is simply that smaller firms will be nimbler.

    I believe Masneck’s argument is that innovation occurs as BOTH destinations and processes. With the Internet, there’s a lot of focus on how it improves distribution and collaboration, so there we’re talking about process innovation. Personally, I consider FOSS an innovative process.

  • James Gattuso

    ..”it’s often very difficult to replicate innovation from the top down.”

    Tim — I don’t think this really tells us much. Of course its often difficult. But then again, I’d think its often easy. For cases where its difficult (for maps I have no idea), the IP debate isn’t very relevant, since legal protections aren’t as critical. But that doesn’t help someone who has a not-so-difficult-to-replicate innovation. For them, IP protection is still critical.

  • James Gattuso

    ..”it’s often very difficult to replicate innovation from the top down.”

    Tim — I don’t think this really tells us much. Of course its often difficult. But then again, I’d think its often easy. For cases where its difficult (for maps I have no idea), the IP debate isn’t very relevant, since legal protections aren’t as critical. But that doesn’t help someone who has a not-so-difficult-to-replicate innovation. For them, IP protection is still critical.

  • http://weblog.ipcentral.info/ Noel Le

    Its just Tim’s effort to say that smaller firms are inherently more innovative than larger companies because they can possibily leverage the innovating process more efficiently. I have no big disagreement with this as I’ve argued elsewhere the releative lack of concentration in the software industry as a sign that IP policies are fostering a healthy digital economy.

    Yet, Tim’s strategy in this post is that by including Masneck’s view of innovation, he maintains our attention to this proposed inherent efficiency of small firms and diverts us from thinking too much about actual products.

    Of course, what happens when you only see innovation in the process of innovation, where you assign small firms to have inherent advantage: small firms are thereby more innovative.

    In other words, Tim used Masneck to draw a big circle around himself.

  • http://www.techliberation.com/ Tim

    DeLong makes his argument in the abstract without giving any concrete examples, so I was trying to put some flesh on the bones by considering a couple of real-world examples. It’s true, that some innovations are easier to replicate than others. But if anything, it seems to me that YouTube and Google Maps ought to be at the “easy” end of the spectrum. They’re conceptually straightforward, and you can largely see how they work by choosing the “view source” command in your browser. It would be far more difficult to replicate something like Google’s search engine, which has more complex algorithms that are largely tucked away on Google’s servers where no one can see them.

    So I’d be interested in an example of a not-so-difficult-to-replicate innovation. I’m sure they exist, but I’m having trouble thinking of one.

  • http://weblog.ipcentral.info/ Noel Le

    Its just Tim’s effort to say that smaller firms are inherently more innovative than larger companies because they can possibily leverage the innovating process more efficiently. I have no big disagreement with this as I’ve argued elsewhere the releative lack of concentration in the software industry as a sign that IP policies are fostering a healthy digital economy.

    Yet, Tim’s strategy in this post is that by including Masneck’s view of innovation, he maintains our attention to this proposed inherent efficiency of small firms and diverts us from thinking too much about actual products.

    Of course, what happens when you only see innovation in the process of innovation, where you assign small firms to have inherent advantage: small firms are thereby more innovative.

    In other words, Tim used Masneck to draw a big circle around himself.

  • http://www.techliberation.com/ Tim

    DeLong makes his argument in the abstract without giving any concrete examples, so I was trying to put some flesh on the bones by considering a couple of real-world examples. It’s true, that some innovations are easier to replicate than others. But if anything, it seems to me that YouTube and Google Maps ought to be at the “easy” end of the spectrum. They’re conceptually straightforward, and you can largely see how they work by choosing the “view source” command in your browser. It would be far more difficult to replicate something like Google’s search engine, which has more complex algorithms that are largely tucked away on Google’s servers where no one can see them.

    So I’d be interested in an example of a not-so-difficult-to-replicate innovation. I’m sure they exist, but I’m having trouble thinking of one.

  • Doug Lay

    Hmm…easy-to-replicate innovation. What about TiVo?

  • http://www.techliberation.com/ Tim

    Doug: that’s an interesting example. I don’t know the history of early DVR players well enough to comment on it. Did ReplayTV copy TiVo’s design? If so, how long did it take them to bring it to market?

  • Doug Lay

    Hmm…easy-to-replicate innovation. What about TiVo?

  • http://www.techliberation.com/ Tim

    Doug: that’s an interesting example. I don’t know the history of early DVR players well enough to comment on it. Did ReplayTV copy TiVo’s design? If so, how long did it take them to bring it to market?

  • http://weblog.ipcentral.info/ Noel Le

    Hmmm. Tim, I would not necessarily look for innovations easily replicated. How about balancing ease of copying with strategic or commercial value. Firms have more incentive to go after (misappropriate) innovations with all of these characteristics right.

  • http://weblog.ipcentral.info/ Noel Le

    Also, you got my point that innovation applies to both processes and end products right. Thats an economic fact. You can say that innovation in a certain space deals more with one form or the other, and that they are not mutually exclusive, but to say there is only one kind of innovation is not tenable.

    Of the things you write about Tim (peer production, decentralized development), those would be process innovations.

    Product innovations can include Blackberries, extra flight golf balls, desktop apps, etc.

  • http://weblog.ipcentral.info/ Noel Le

    Hmmm. Tim, I would not necessarily look for innovations easily replicated. How about balancing ease of copying with strategic or commercial value. Firms have more incentive to go after (misappropriate) innovations with all of these characteristics right.

  • http://www.techliberation.com/ Tim Lee

    Noel, the BlackBerry isn’t a static invention. They release new versions every year, and each one tends to be better than the one before. If a company copied last year’s BlackBerry and released it next year, they wouldn’t have much market success.

  • http://weblog.ipcentral.info/ Noel Le

    What Blackberry does is called incremental innovation Tim. You can say the process of incremental innovaiton, which ensures constant interop between hardware/software, increased stability and new revenue to firms, is itself an innovation. But don’t you think the Blackberry is an innovation. There are few things set in stone in the digital economy, and I’m not talking about a particular model of Blackberry. But the concept encompassing functionality, form factor, etc. Thats a product innovation.

  • Doug Lay

    Tim:

    Regarding TiVo, I wasn’t thinking of ReplayTV (who went bankrupt, after all) but rather of all the “knockoff” PVRs that cable companies have been marketing to their customers. EchoStar is the most prominent example:

    http://www.patentlyo.com/patent/2006/08/echostar_v_tivo.html

    I’m not sure what to make of this case – I usually default against supporting patent injunctions, but TiVo is definitely a much more sympathetic organization than EchoStar…

  • http://weblog.ipcentral.info/ Noel Le

    Also, you got my point that innovation applies to both processes and end products right. Thats an economic fact. You can say that innovation in a certain space deals more with one form or the other, and that they are not mutually exclusive, but to say there is only one kind of innovation is not tenable.

    Of the things you write about Tim (peer production, decentralized development), those would be process innovations.

    Product innovations can include Blackberries, extra flight golf balls, desktop apps, etc.

  • http://www.techliberation.com/ Tim Lee

    Noel, the BlackBerry isn’t a static invention. They release new versions every year, and each one tends to be better than the one before. If a company copied last year’s BlackBerry and released it next year, they wouldn’t have much market success.

  • http://weblog.ipcentral.info/ Noel Le

    What Blackberry does is called incremental innovation Tim. You can say the process of incremental innovaiton, which ensures constant interop between hardware/software, increased stability and new revenue to firms, is itself an innovation. But don’t you think the Blackberry is an innovation. There are few things set in stone in the digital economy, and I’m not talking about a particular model of Blackberry. But the concept encompassing functionality, form factor, etc. Thats a product innovation.

  • Doug Lay

    Tim:

    Regarding TiVo, I wasn’t thinking of ReplayTV (who went bankrupt, after all) but rather of all the “knockoff” PVRs that cable companies have been marketing to their customers. EchoStar is the most prominent example:

    http://www.patentlyo.com/patent/2006/08/echosta…

    I’m not sure what to make of this case – I usually default against supporting patent injunctions, but TiVo is definitely a much more sympathetic organization than EchoStar…

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