Interesting look at the notion of a scientific process to business success, as espoused by a popular book of the same name. It’s worth reading the review if you are interested, as I am right now, about how to better manage people, however there is a concluding paragraph that captured some wisdom we all need to be reminded of from time to time.
When I had my web-based business, we found ourselves in 1998 and 1999 up against some competitors with frightening amounts of venture capital. However, we soon noticed that they put most of their efforts into trying things that we already knew did not work. Our most valuable intellectual property was this knowledge of "what ought to work, but doesn’t."
The wisdom of crowds is quite often positioned as an absolute, however it’s also rather obvious that just becuase everyone is doing something, it doesn’t mean it’s a good idea. Something your mom once told you about people jumping off bridges, I would imagine.
Every venture capitalist has a story about some space they didn’t fund even though it was one of the hot memes because they knew the model was fundamentally flawed. Of course, there are probably an equal number of stories from the other direction, but even they reflect a contrarian view to the popular wisdom of the time.
In 1998 how many investors would have looked at Google in a dorm room and passed on the deal because Inktomi and Yahoo! dominated search? YouTube? How many B2B exchanges got funded even though the physical realities of those markets made them ill-suited for e-commerce? A lot, and I funded a couple of them when I was at SAP Ventures so I’m guilty as well, but for the most part this entire sector has been a bust because of things "that ought to work, but don’t".
It’s pretty obvious stuff I guess, but always good to dust off and be reminded about nonetheless.