Most innovation looks like a stack, not a moonshot

If you wait for the big great idea, you miss that most innovation is a stack of smaller good ideas, executed well, one after the other.

When Steve Jobs died in October 2011, Apple’s market cap was $300 billion. [L] As of January 2022, the company’s market cap was at $3 trillion [L] - an almost 9x increase. The scale of Apple today is often difficult to comprehend. If AirPods alone were their own company, they would be the 32nd largest company in the world. In 2020, AirPods generated more revenue than Twitter, Spotify, and Square combined.[L]

Southwest Airlines turned the airline industry upside down by using the same tools (planes, airports) but taking an entirely different approach than the legacy airlines. But that difference did not come from one big idea. Instead, it was a series of ideas that, together, created an unbeatable, unique experience.

With a desire to keep aircraft in the air (averaging at one point twice the number of flights out of their gates than competitors), they used only one kind of plane, batch boarding, open seating, single class, smaller airports, no food, and more. The friendly staff, emphasis on low prices, and selling tickets themselves (rather than through a ticketing system) were all key pieces to creating a different, unique experience.

We often look for a single idea that will change everything. Those are important, but they’re also one in a million. And by waiting for the big idea, we’re off the hook for doing the work that’s right in front of us, right now.

The majority of great innovation and change happens through alert, caring people solving the problem in front of them in new and unique ways. Then picking up the next problem or opportunity. Then the next.

Over time, they create a stack of innovations that equate to something unique, meaningful, and hard to replicate.

In The Innovation Stack: Building an Unbeatable Business One Crazy Idea at a Time, Jim McKelvey, cofounder of Square, shares a few of these examples (the Southwest example above is one of his). Most central is how Square built a unique product that even stood up against Amazon’s attempt to compete with and replace them.

Creating this stack of small differences that together create something wholly unique, McKelvey writes, begins with solving a problem that’s “perfect” - an unsolved problem you have the “power and courage to solve.” To do so means leaving the walled confines of the safe city and venturing into the unknown.

You can have a great life copying other people who have great lives. Copying is such a supremely powerful tool that it bets the question: why would someone choose to do anything else? Given the safety and predictability of copying and making incremental improvements, why risk total failure by taking a transformative leap? But some do choose to leave that walled city. Are they crazy? What is their motivation?

He continues:

Once you have the audacity to walk out of the walled city and try something entirely new, you shouldn’t have any problem with perseverance. If you quit, you die. Seminar over. Fear fuels your survival instinct, and you will leap from invention to invention that necessity will mother. The “decision” to innovate is easy to make, as there is little choice.

You don’t choose to do a dozen things to survive, you just choose to survive—and are forced to do a dozen things. So the real choice, then, is about whether to tackle a perfect problem or not. Ultimately, the decision to do something new comes down to a battle between the audacity you have to solve a perfect problem and your fear of failure. How much do you care verses how much does it cost. If you care enough, failure be damned.

Moving out of the known and into the unknown creates a different problem solving method.

The problem with solving one problem is that it usually creates a new problem that requires a new solution with its own new problems. This problem-solution-problem chain continues until eventually one of two things happens: either you fail to solve a problem and die, or you succeed in solving all the problems with a collection of both interlocking and independent innovation. This successful collection is what I call an Innovation Stack.

But an Innovation Stack is not something you bring home from some management retreat along with the embroidered fleece jacket. An Innovation Stack is not a plan, it is a series of reactions to existential threats. It doesn’t matter if these threats are self-inflicted because you chose to leave the city walls or because you were tossed out. You build an Innovation Stack the same way the pioneers traveled without maps.

And here’s where it lands: When you’re innovating and solving problems this way - copy everything that works. Innovate only when necessary.

Copying and innovation are partners. If you choose to solve a perfect problem and create explosive growth, most of what you do will still be copying, you just won’t copy everything. Copy when you can; invent when you must.

We see the end, and it looks amazing. But to get to success, a great idea is followed by strong execution – one step at a time.