Missing the Next Big Thing

There are plenty of examples of companies seeing the Next Big Thing right in front of them and yet passing on them. Like Xerox PARC when it developed both the mouse and the graphical user interface (GUI) and yet sold them to Apple for peanuts! How could Xerox have been so dumb, we wonder?

Malcolm Gladwell wrote a very interesting article on the creativity myth where he told the “true” story of the mouse (the mouse wasn’t Xerox’s idea; rather, it was devised by a computer scientist, Douglas Engelbart, at Stanford Research Institute). Here’s the interesting part that doesn’t get told often:

“If you lined up Engelbart’s mouse, Xerox’s mouse, and Apple’s mouse, you would not see the serial reproduction of an object. You would see the evolution of a concept.”

The GUI too evolved from what was at Xerox to what Apple finally sold to users. The key word here? Evolution. Xerox didn’t have the next big thing ready…they had a concept. Apple took the next step in both cases and productized them. Xerox doesn’t look as bad or as dumb now, does it?

Such evolution (and perceived misses) happen outside the commercial world. Like it was the Soviets who imagined how digital tech could change warfare. The Americans (later) came up with actual systems based on the idea. And the Israelis (who else?) were the first to use the concept in real warfare! (In case you didn’t get it, Gladwell says when it came to the mouse, Engelbart was the Soviet Union; Xerox was the US; and Apple was Israel.)

Gladwell’s other point is based on Dean Simonton’s line, “Quality is a probabilistic function of quantity”: have enough smart R&D guys and many good guys will pop up…but a company cannot pursue all of them. They have to pick and choose. And sometimes they will make the wrong choice.

Plus of course, context matters. Come up with an idea totally outside the core business of a company and good luck getting anyone in the company to pursue it:

“…if some bright guy at (pharma giant) Pfizer wrote a word processor. Good luck to Pfizer getting into the word-processing business.”

Add Microsoft missing the Internet bus as another example (we are a desktop company, not an Internet one). Or IBM missing the chance to buy out the DOS operating system from Microsoft (we are into hardware, not software). And Xerox (how many opportunities did Xerox miss?) missing the chance to build laser printers because hey, they were in the copying business (even though one of their R&D guys had a laser printer running)!

But there is an exception to such diversification into totally unrelated fields repeatedly and successfully: Google. They moved from search into news aggregation, mails, maps (driving directions) and mobile. So is Google the exception? Or the way companies need to operate in this fast changing world?