‘Innovation’ is a sickening buzzword & cliche these days, with an (almost) exponential growth (and degradation) in the word’s usage over the past two decades. In fact, the word has lost its meaning so much that I ended up removing any traces of it from my Linkedin profile, after hearing it on America’s Next Top Model. A wannabe model called herself an innovator for dancing on a stripper pole placed on the runway, rather than simply cat-walking on it as the rest. Quantum computers, nanotechnology, and energy venture capital (aka my profile) cannot compete with that.
Corporates casually refer to standard product development or even slight improvements as innovation. I am talking to you, Nissan – you are not reinventing how people drive. Google, with their driver-less car, is. In fact, most MNCs confuse keeping up with technology as innovation; innovation is a true breakthrough – something that puts you on a new growth curve, something that (truly) changes status quo. You recognize true innovation because doubt, fear, and excitement are part of its entourage. It should make you a tad-bit uncomfortable, skeptical, and at the same time raise your hopes. People don’t really like change. And if you aren’t freaking people out, you didn’t really change anything. Did someone mention driver-less cars? So just any new thing or even keeping up with change is not innovation.
Enter The Red Queen from one of my favorite mental models, to elucidate (and give to a powerful visual to) why ‘keeping up’ is just not enough. Coined by brilliant mathematician, logician, and super popular writer, Lewis Caroll, the effect takes its name from the Red Queen’s explanation of Wonderland to Alice in Through the Looking-Glass
“Well, in our country,” said Alice, still panting a little, “you’d generally get to somewhere else—if you ran very fast for a long time, as we’ve been doing.”
“A slow sort of country!” said the Queen, “Now, here, you see, it takes all the running you can do, to keep in the same place.”
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The Red Queen Effect is an extremely popular hypothesis in evolutionary biology: continued development is needed just in order to maintain an organism’s fitness relative to the systems it is co-evolving with. That is, organisms must constantly adapt, evolve, and proliferate not merely to gain reproductive advantage, but also to simply survive while pitted against ever-evolving opposing organisms in an ever-changing environment. The figure on the left captures this macroevolutionary Red Queen Effect (a la Leigh Van Valen, 1973)). The linear relationship between number of genera and the logarithm of survival times suggests that the probability of extinction is constant over time (more here). If becoming and staying fit were sufficient to avoid extinction over time, the probability of extinction would decrease – not be constant – with time. I bet a number of companies follows a similar plot albeit over a much shorter time scale.
The Red Queen Effect is also used to explain the evolution of sex. Sexual reproduction speeds evolution by offering variability, uniqueness, and incentives! And apparently Matt Ridley’s book, The Red Queen: Sex and the Evolution of Human Nature
But here is the kicker. The wonderland of technology development — from computers to energy — is not that different. Technology development, companies, and startups are also governed by the Red Queen Effect. The inertial speed of each ‘world’ might be different, with energy technology being definitely slower than computers. But in each of these worlds, the next best thing is needed just so you do not fall behind and get obliterated. So ‘keeping up’ is simply not enough. It is certainly not enough to jump to a different growth rate. So the next time your team ‘innovates’ something, don’t just bask in that glory. Realize that you have just made it harder for you to excel yourself – congratulations. Now, run faster.
We also need to recognize that there is a masochistic, self-referential feedback loop at play here because the new status quo has just been redefined by the remaining players – the fitter ones, those who have invented new things, developed new products, and taken that one extra step. Which is why when venture capitalists look for battery companies to invest, the norm needs to be 10X improvement in cost and energy density. Does the startup have what it takes to compete with the industries 3 years from now, roughly the time it will take for the startup to get off the ground.
I’ll end with another quote from the (Red) Queen herself, “If you want to get somewhere else, you must run at least twice as fast as that!”