Dilbert's Scott Adams Has The Best Explanation Of Innovation In Silicon Valley Today That You'll Read

from the it's-all-psychology dept

Having spent nearly two decades in Silicon Valley, it's always interesting to see how different people try to understand or explain the innovative process that happens here. Remember last week's discussion on "disruptive innovation?" That's just a small part of the larger debate, often perpetrated by folks who have little sense of what's often going on in the startup and innovation world. So I find it interesting that after reading a bunch of opinions on that debate, a totally unrelated discussion hit home as being a hell of a lot more insightful and relevant to understanding a lot (though not all) of the innovation happening in Silicon Valley today, and it comes from Scott Adams, of Dilbert fame.

Adams, of course, is more than "just" a comic strip author, even if that's what he's most known for. He's started a few other businesses over time and is apparently hard at work on an internet startup. He also tends to post thought-provoking posts to his blog pretty frequently, even if he admits that much of the time he's just trolling to get responses out of people. Sometimes I strongly agree with him, and at other times, I vehemently disagree. But one of his recent posts on the nature of innovation in Silicon Valley is really worth reading.

It starts out by clearly setting itself up to mock the overused and overhyped concept among startups of the pivot -- a startup totally changing product direction after realizing its existing offering was unlikely to go anywhere. This concept has often been mocked (perhaps rightfully so) as highlighting entrepreneurs who either lack the courage of their conviction, or who are unwilling to put in the long slog of building a real business. But while Adams could take the easy mocking route, he actually provides a lot more insight into what's really happening, first highlighting how much of success in Silicon Valley is really due to luck.

The valley attracts some of the smartest humans on Earth, and each of those humans, being otherwise normal, probably assumed they could use their talent, brains, and hard work to achieve specific business goals, such as building product X and selling the company to Google for a billion dollars.

And then they find out that success in the start-up realm is mostly luck. They discover this by trying great ideas coupled with great execution and failing. And they further discover it by observing unexpected successes at other start-ups. Success simply can't be predicted to any level of statistical comfort.

Smart observers in the valley look for the "tell" that an early stage start-up will be a winner, but none can be found. Oh, sure, the team needs to be smart, talented, and willing to work long hours. But nearly every start-up has that going for it. Most have great ideas as well. None of it predicts success.

This is an exaggeration, of course. A skilled and ready team executing well is better situated to capitalize on good luck -- and there is a big variance in skills and execution among teams. But it is depressing how little people recognize or admit the role of luck in a successful startup. In my experience, first-time entrepreneurs who succeed take way too much credit for their own work. Those who struggled to build their business or who have a failure or two under their belts are much more willing to admit the role of luck (good or bad) in their eventual results.

But rather than taking this to the next expected place of laughing off the whole situation as an effort in being lucky, Adams points out that with the basic infrastructure of building a startup so commoditized, it changes the nature of innovation on the internet, such that it's no longer about a technological advantage or innovation, but about psychology:

In an environment in which start-up resources are not limited, and no one can predict the next winner, and it is easy to measure customer behavior in great detail, the Internet is no longer a technology.

The Internet is a psychology experiment.

Building a product for the Internet is now the easy part. Getting people to understand the product and use it is the hard part. And the only way to make the hard part work is by testing one psychological hypothesis after another.

Every entrepreneur is now a psychologist by trade. The ONLY thing that matters to success in our anything-is-buildable Internet world is psychology. How does the customer perceive this product? What causes someone to share? What makes virality happen? What makes something sticky?

And that's why you see so many companies "pivot." Because as a psychology experiment, it becomes clear that the early results aren't good, so it's time to try something else. Whether or not this seems exciting or depressing to you may depend on your perspective, but Adams isn't taking an opinion on the subject so much as describing what he's observing, and it seems fairly accurate in my experience.

There's one other bit of Adam's post that is worth highlighting, because it's something that people outside of the startup world almost never understand: the fact that while highly competitive, the level of "helping each other out" that goes on in Silicon Valley is quite incredible:

Another fascinating phenomenon in the valley is that every entrepreneur and investor seems genuinely interested in helping strangers succeed. I would go so far as to call it the defining feature of the start-up culture. Some of it has to do with the nature of entrepreneurs as serial problem-solvers. If you tell me what problem your start-up is experiencing, my reflex is to offer a suggestion or to connect you to someone who can help. And creating social capital makes a lot of sense when teams are fluid and who-you-know always matters. But beyond the practical and selfish benefits of being helpful, the dominant worldview in Silicon Valley is that if you aren't trying to make the world better, you're in the wrong line of work. The net effect is that the start-up culture is shockingly generous. If you need something for your start-up, folks will happily help you find it. I would have predicted the opposite.

Adams is not the only one who would have predicted the opposite. Time and time again, I hear outside observers believe that the startup world is very insular and only focused on their own goals. People frequently like to mock the "change the world" attitude of many entrepreneurs, finding it difficult to believe it's sincere or genuine, rather than pure marketing hype. And, sure, there are some carpetbaggers who don't believe it at all, but the degrees to which many in the Valley are legitimately trying to do amazing things and change the world is part of what's so inspiring in an age where cynicism and protectionism is so prevalent elsewhere.

We've talked in the past about all the research that shows how widespread information sharing and job hopping made Silicon Valley into the innovative center of the world, and this is just an extension of that. Rather than creating silos inside big firms, Silicon Valley has long been about sharing ideas among a wide group of people, which actually helps accelerate the pace of those "psychological experiments" to figure out what works, and what will actually build a better, more innovative product.

It's a really useful way of understanding Silicon Valley for those who haven't lived it.

Filed Under: change the world, experimentation, innovation, pivot, psychology, scott adams