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Startups a Safer Bet Than Behemoths
Former Slashdot editor ScuttleMonkey raises his voice from the great beyond to say that "TechCrunch's Vivek Wadhwa has a great article that takes a look at difference between startups and 'established' tech companies and what they each mean to the economy and innovation in general. Wadhwa examines statistics surrounding job creation and innovation and while big companies may acquire startups and prove out the business model, the risk and true innovations seems to be living at the startup level almost exclusively. 'Now let's talk about innovation. Apple is the poster child for tech innovation; it releases one groundbreaking product after another. But let's get beyond Apple. I challenge you to name another tech company that innovates like Apple—with game-changing technologies like the iPod, iTunes, iPhone, and iPad. Google certainly doesn't fit the bill—after its original search engine and ad platform, it hasn't invented anything earth shattering. Yes, Google did develop a nice email system and some mapping software, but these were incremental innovations. For that matter, what earth-shattering products have IBM, HP, Microsoft, Oracle, or Cisco produced in recent times? These companies constantly acquire startups and take advantage of their own size and distribution channels to scale up the innovations they have purchased.'"
They don't innovate. They scrape the internet looking for ideas, making products that are "just different enough" to avoid existing patents, and they buy up startup companies just as you describe. Just because Apple has better press management skills doesn't mean they don't have similar business practices. Apple is not an exception -- stop dodging this just to please the fanboys.
#fuckbeta #iamslashdot #dicemustdie
Oh you mean how apple buys up startups to produce their products or how the iPod, iTunes, iPhone and iPad were really just incremental innovations of other services and products that people were already offering?! Yea, I agree. Apple is the greatest tech company, but lets be honest; they are more polisher than innovator.
For those of you who are new to the tubes, http://en.wikipedia.org/wiki/Creative_Nomad, http://en.wikipedia.org/wiki/PressPlay, http://en.wikipedia.org/wiki/Smartphone, http://en.wikipedia.org/wiki/Tablet_pc
Yes, Apple's products did improve upon all these ideas, but they weren't earth shattering. They just used Apple's "size and distribution channels to scale up the innovations" and bring it to the masses.
I'm an angel investor, so I can talk fairly competently on this subject.
Let's compare a well known behemoth (IBM) with a well known start-up (Twitter).
If I invest in IBM, I'm guaranteed a healthy return. Barring any major disaster, IBM will consistently return a profit on what I invest.
If I invest in Twitter, I'm not guaranteed a healthy return. My returns may be enormously higher than investing in IBM if the company is successful, and I might lose my entire investment if the company goes bankrupt.
This actually has some real world ramifications for me. The majority of my money is stored away in Corporate Bonds for major companies, because I know that I have a very low probability of losing the money and a very high probability of seeing at least a two to three percent return on my money every year. That's what makes behemoths a safer bet than start-ups. I only give about 15% of my assets towards start-ups at any time, because for the most part, I will break even in what I invest or lose about five to six percent of my investments.
I angel invest in companies for the fun and excitement of creating something, not because I want to make money.
Real innovation means that their existing products no longer sell because everyone buys the innovative product.
So why would an established company scrap their existing investment?
What they want is something new enough to be interesting ... but not different enough to threaten their cash cows ... that supplements their existing product line.
Apple is great at that. Look at the iPhone. New iterations of their existing product that never threatens their laptop / desktop computer segment. But can supplement it and works well with it.
It is only the startups that don't have an existing investment to threaten that will take the real risks.
Which is why software patents are bad. They allow the existing companies to sue the startups and limit the innovation.
Explorers discover or invent things. Pioneers are early adopter to integrate and make useful these inventions. Settlers reap and create a bussiness ecosystem around the places proven by pioneers. Apple has mainly been a pioneer, and microsoft a settler. Apple did not invent the GUI or Dynamic Memory, or Switching power supplies, or Post script or the Mouse. But they did pioneer the use of those technologies. Microsoft and dell/compaq settled those. They did not invent or truly pioneer MP3 players but they did advance that sufficiently to call it their own and then they settled it. Apple did not invent unix, but they did pioneer moving it from the etherial workstation market to the consumer market and now they have settled unix in the consumer market.
Other than their pioneering in search, Google is purely a settler in every market they occupy. Unix on devices, e-mail, documnet process, thin clients (aka "the cloud"). If you want to call google a pioneer then you have to think of it as a meta-pioneer: integration is really what they are about. But That is almost the definition of settling.
Microsoft did pioneering work in a few areas such as windows GUI on embedded devices. You might say that was apple or palm however.
Apple to it's credit actually does a lot of exploration you don't ever hear about. ARM processors? Power-PC processors? Firewire? Conformal Batteries? But they don't really play that angle up a lot. Lately I've been really impressed with microsoft's investment in the visualization field so maybe they are starting to innovate again.
I also suspect that Microsoft has a shot at becoming a settler in the "cloud" field. THeir new Azure technology seems to be just what bussinesses of many different sizes are going to need to go to managed IT.
Some drink at the fountain of knowledge. Others just gargle.
If you want pound for pound revolutionary change to society, Google Maps has done way more to change our lives than the iPod, which is really just the next step on the evolutionary chain started by the Sony Walkman. Incremental, my ass. It has single-handedly democratized the way we interact with location and geographical information.
The iPhone was pretty revolutionary, though, touching off a revolution in how we integrate handheld devices into our social lives. And GMail is mostly a souped-up Hotmail that sucks slightly less.
Also, both Google and Apple began as startups with revolutionary products, and both have had hits and misses over the years.
I have no idea what the point of the original article was. None of its assertions sound remotely true.
You're just reinforcing his point.
Google Docs was born as Writely and then bought by Google.
Google Voice was born as Grandcentral and then bought by Google.
Android was born as Android and then bought by Google in 2005 (and never mind that Intel and Nokia were experimenting with Linux-based phones too).
What could have been a valid point gets derailed by blatant fanboi blinders. Apple is NOT an innovative company either. It's an innovative spin doctor. They are good at convincing people they must have a trimmed down, stylized, and monetized versions of established technologies. iPod? MP3 players. iPhone? Smartphones. iPad? Tablets. iTunes? Napster.
Apple is very good at taking technology and making it usable for the general consumer. Were you around when the iPod was launched? There were two basic classes of MP3 players. Small portable ones that could hold maybe a dozen songs and large portable CD players that could hold a thousand songs or so. If you are just looking basic functionality you could decry that the iPod wasn't innovative. Having actually used the MP3 players at the time, I can tell you what made the iPod different was that it was small and held a lot of music. The other thing I can tell you is that the UIs for other MP3 players sucked. The software for them sucked as well. As a geek, I put up with it. With Apple they actually spent time in addressing all the little things that would annoy an average consumer. Syncing is one step. MP3 ripping and encoding occurs immediately when you stick in a music CD, etc.
The same with smart phones. Yeah they've been around but they sucked well before Apple made theirs. Having one issued to me by work, I can tell you I detest using it. It's a WinMobile phone. It seems to me MS just took an OS, made it almost the same as desktop Windows, changed a mouse for a stylus and called it done. No thoughts were given about how the UI might need to be tweaked for an interface with a much smaller screen and small keyboard but no mouse. With the iPhone, Apple didn't put OS X desktop onto a phone and walk away. They actually thought about how a user might need to interact with it differently.
The same with tablets. MS has been pushing tablets for almost a decade. Like the smart phone, very little thought was given to the fact that a tablet user may need to interact differently than a desktop user. Most of the tablets I've seen were basically a full desktop PC and OS shoved into a small form factor. MS just changed the mouse for a pen. No rethinking about how touch could be used better.
Napster, really? You're going to compare a peer-to-peer filesharing system that allowed its users to illegally share copyrighted material to a centralized and legal music store.
Further, Apple is just as into buying up established tech and upstarts to inject life into its glossy image as everyone else (SoundJam MP). It even buys open source projects when parts it requires are at risk of being GPLv3'ed (CUPS). Hell, if it were not for FreeBSD's license terms, there probably wouldn't even be a OS X or iOS at all.
I don't dispute that Apple does buy other companies. However, they are very selective about what they buy. Unlike other tech companies (Time Warner buying AOL, MS buying Danger, etc.), every one of their purchases has actually led to a product or service of some sort to the company. NeXT technology became OS X. SoundJAM became iTunes. KeyGrip became Final Cut. Emagic became Logic Pro and Garage Band. Fingerworks' technology is used in both the multi-touch iPhone and the multi-touch trackpads. PA Semi is designing their mobile chips, etc.
Well, there's spam egg sausage and spam, that's not got much spam in it.