When I was a scientist, the process of innovation was throwing ideas on the wall and seeing what stuck. That felt good—think of an idea, test it, and share it to the world. I thought I was innovating. I had three whole papers to show for it!

Was I though?

Well, I certainly was adding to the body of knowledge, creating something that didn’t exist before. However, I did not solve any problem of significance. Expanding beyond myself, science, as a whole, has this problem. From my interaction with numerous scientists, the act of “innovation” was the addition of knowledge. Novelty was more important than usefulness.

In contrast, startups operate that usefulness is the atomic unit of innovation. A problem exists and the solution removes the obstacle. In this innovation, novelty is not a factor. From a birds-eye-view, most common case of startup is that they repurpose existing knowledge and technology to sidestep or remove the obstacle. Novelty could exist, but it’s unimportant.

Two examples come to mind.

  1. Uber solved the problem of getting from point A to Z. The key obstacle is that the profession of a cab driver was a regulated, only those working for accredited taxis could pick up passengers. Uber created a free market by sidestepping regulation allowing anybody to be a driver and purchase rides, sidestepping the regulatory burden. No new technological innovation occurred, just removal of arbitrary rules.
  2. Wealthfront / Acorn / etc. are robo-investors that automatically invest your money. The problem was that investing is difficult and has extremely delayed gratification. The key obstacle was human psychology desires the easy, instant reward, and fun. Well, the simple solution is removing the human and make the investment automatic. Now, the burden on the consumer is one conscious decision to invest for the financial future and forget about it. Again, nothing new has been invented or discovered.

The common thread among these companies is that their “innovation” are process innovations. Often, they are not adding to body of literature, and instead they are subtracting obstacles. Thereby, they provide immense value.

Academia could learn a lot from private sector here. Novelty is not very important. Adding to body of knowledge isn’t either. Solving problems are.