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10:39AM

Innovation : You're doing it wrong 

Marc Andreessen on what makes technology businesses successful

"The core idea we have, the core theory we have, is that the fundamental output of a technology company is innovation and that's very different than a lot of businesses, right? The fundamental output of a car company is cars. Or the fundamental output of a bank is loans. The fundamental output of a tech company is innovation, so, the value of what you've actually built so far, and are shipping today is a small percentage of the value of what you're going to ship in the future if you're good at innovation. So the challenge tech companies have is they can never rest on their laurels with today's product, they always have to be thinking in terms of the next five years of what comes next and if they're good at running internally and are indeed a machine that produces innovation, they tend to do quite well over time. It's when things go wrong internally and they stop innovating, which happens alot, that the wheels at some point tend to come off."

Totally insightful and correct.

The problem for many technology companies is that while great, often opportunistic innovation might have initially sparked a product or service into life, over time and as the business grows either the leadership fails to recognise that lightning might not strike twice or, even worse, the innovation focus shifts from R&D to sales and marketing and if you're not careful, the core competency becomes a kind of hollow product marketing innovation that's designed to extract maximum value from existing IP.

Then the lunatics have taken over the asylum and, most likely, you're screwed.

Yahoo, RIM and Nokia being great cases in point this year, set against the Steve Jobs view that design and innovation should be an almost sacred part of the business that few people are permitted to participate in.

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