Corporations, in practice, aren't that. They are not disposable in practice. Large companies dominate their markets, expect to live forever, etc.

Innovations that don't happen within Google, microsoft, etc... those innovations don't happen.

This isn't an absolute statement. Innovations can happen outside and new companies can be founded. We went through a period in internet-based innovations where a lot of innovation happened outside of existing large corporations and became their own giant corporations. That's not a long term norm though. That reality was largely driven by really low capital costs. These days, new internet companies raise a lot more money... mostly to pay for advertising that goes to google and facebook, who control access to users.

More likely than innovation outside of existing companies gets bought into bigger ones.

Consider Tesla. Obviously Musk's abilities played a big part. So did his bank account, his ability to raise capital, etc. It takes that much force to innovate in that market from outside. Very difficult.

I think it's reasonable to ask why existing car companies couldn't pull off anything like it. There are incentive/incumbent reasons, but I don't think these are the whole story.

I agree that innovation should and could come from outside big corporations. But, the reality is that resources, market power and such are highly concentrated within large corporations. There isn't much space to operate outside of it. We can't expect a sub-1% section of an industry to do all the innovation... outside of rare examples like the internet circa 1995-2015.

Also, consider that tech giants are a lot more innovative than incumbents in other industries, largely because of the pressure from small companies and their relative youth. Trains, Planes, Cars, Roads, Banking, smelting, etc... these industries are not like that. Nothing at all happens outside of large corporations, innovative or otherwise.

Usually I leave comments alone unless I agree or disagree, but this is a really easy one to answer - the entire Tesla experiment has been grossly unprofitable so far and there isn't any concrete evidence that any business should follow in Tesla's footsteps. They just posted their first measly profit after a decade with not much to show for it.

It may yet come good and it has been a good ride for shareholders, but if you want to know why nobody is rushing to innovate like Tesla it is because they have been leaking money like a drunken sailor.

The MEB platform is part of a Volkswagen strategy to start production of new battery electric vehicles between 2019 and 2025.[3] In 2017, the VW Group announced a gradual transition from combustion engine to battery electric vehicles with all 300 models across 12 brands having an electric version by 2030.[4]

As of May 2018, the VW Group had committed US$48 billion in electric-vehicle batteries supplies[5] and announced plans to outfit 16 factories to build electric cars by the end of 2022.[6]

They’re also doing more to help the environment than any other corporation (and probably government) on earth.

But, yeah, their quarterly profits kind of suck.

What’s wrong with that? An “innovation” is not always a product. Sometimes it’s just a feature of a larger product.

Apple for instance acquires a company every couple of weeks according to Cook. Those companies’ innovations get integrated into an already successful product.

“The Innovator’s Solution” is for larger companies to start a small independent team not beholden to the corporate structure. That’s basically what an M&A strategy is.

Either way, you now have a more concentrated industry, with a larger share of resources in non innovative hands.

Also, don't rely too much on internet companies for your example. This is (was?) a sector with high, fast returns on innovation, low barriers to entry and low capital requirements. That's not the norm.

Also many of its most strategic acquisitions have been used to design and manufacture hardware from processors, biometric sensors, etc.

Yes I realize Apple doesn’t “manufacturer” anything. But its just a legal construct. More of a difference in degree than kind. It pours billions in its manufacturing partners.

Apple sells 300 million+ physical goods every year.

I think you're selling some of these companies short -- the thing they might seem focused on now was not the thing they initially got popular for doing. In other words, they innovated outside their expertise to stay relevant.

I don't see who the loser is in this story. It isn't Cisco shareholders; they can be Zoom shareholders too if they want to be.

Sure Cisco shareholders would have been better off if Zoom was an in-house project, but investors are really the ones who are supposed to be making the value calls on teleconference-or-routers market exposure style decisions. If I'm a Cisco shareholder I don't think management made a mistake. I think I made a mistake not becoming a Zoom shareholder.

I want them to fire the management chain that was involved in the zoom debacle, and also fire the people that hired / promoted that management chain.

Opposite - they are designed to be incumbent.

Once a product sticks, companies become 'operational' and not 'dynamic' which is to say they excel at customer, product, regulatory, lobbying, scale, RFPs, branding, little features that satisfy a range of customers. Everything done 'just well enough' but otherwise the entity has not reason to innovate.

Innovation is just a pile of risk to the system, when in fact, the 'incumbent corporation' is a 'cog' in that system so there's no reason to change it.

Not only is there little incentive to change, there is 'anti incentive' in many cases.

Also - innovators are really hard to identify, and that thing may not be part of the job anyhow. There are all kinds of creative innovators, with many kinds of specialisation, the Zoom case I'm not sure is very exemplary anyhow.

Boeing I would say has a lot to learn from SpaceX.

>If someone has great ideas, we should invest in the person not in their employer.

But what if the employer is investing? This talks about how corporations dismiss good ideas, but large ones like Bell fostered it. Not sure if Apple had some innovators leave, but if they did, I haven't heard of them.

Bell Labs was a classic blue sky internal research outfit. Modern corporate culture can't quite handle the concept, so modern R&D is more constrained and "results driven."

There's a critical difference between implementing existing ideas and inventing completely new classes of ideas and devices - like the transistor, or information theory as a discipline.

Modern corps do a lot of the former, but not so much of the latter. Far less than Bell Labs used to.

I think it's in the nature of big companies to view everything as a process optimization problem and losing out on "innovators" is viewed as a gap in optimality that needs to be filled. An environment tuned to value extraction is inherently going to be hostile to exploration. Can't have your cake and eat it too, buddy.

Large companies can identify innovators, or at least learn to do so. In some cases, it will be as obvious as the founders of companies they've acquired. In other cases, it may be simply polling the engineering and product management ranks and tracking down those who are considered innovative by their peers. Or, you may even make it egalitarian and offer developers a 'year of invention' after some number of years at the company.

One point I think is key is to create an environment that is conducive to innovation. Relaxed administrative obligations, flat organization structure and a budget. Nominal oversight and justification requirements. Then, a simple guideline: What is developed needs to be on a path to becoming a product or service the company could offer.

Innovators could be supported with HR for finding contractors or consultants to work with, purchasing for buying components or equipment, marketing and business development persons could be assigned to the program to help innovators with business plans, cost and pricing analysis, market research. The innovation organization could be placed in a work space with dedicated space for their project, and a common space to meet and collaborate with other innovators.

Rewards for successful products could simply be additional stock grants and recognition, or perhaps simply another tour of innovation.

The risks would be if the program were abused and budget misspent, or the innovator simply didn't do any real work, or went off the rails with their projects. Also, development projects could have many budget sizes from virtually nothing to multiple millions. Perhaps the business development partner could help with proposals to request additional budget, once prototypes were far enough along to be compelling.

A multi-billion corporation could easily allocate a few million to this type of environment and keep a dozen or so innovators busy. You'd only need one success every so often to make it worthwhile.

If you are in an organization filled with vindictive employees, I recommend terminating them all if you have the power, or finding a new place to work. Not everyone can be part of the A-team. Trying to constantly appease those who feel entitled to the highest levels of the software engineering ivory tower will never end in a good outcome for the organization and will dis-incentivize those who actually bust their ass every day.

Finding and terminating toxic employees is the single best thing every company should do to improve its health, but few do. Probably because some of the most toxic people are very skilled at looking good to their superiors while causing huge amounts of damage.

I think that's not how it'd work. Instead, those vindictive people would be managers, and they'd be the ones that provided you with information, and based on what they said, maybe statistics they show, it'd seem like obviously good ideas to scrap those projects

From "Ask HN: Insider history of the demise of Kodak?" https://news.ycombinator.com/item?id=12111597

Bingo. Innovator’s Dilemma. You have to be willing to eat your own lunch because otherwise a competitor will eat your lunch.