Where is the real innovation

Business is rapidly expanding into the web 2.0 space now that Millennials and the Internet generation start hitting the work force. The problem right now is that we are in a cycle of incremental innovation rather than any real true disruptive innovative technology. While VC’s might have passed on Google and a host of other companies initially, with the cycle of incremental innovation that we are in now, VC’s are busy looking for the next “big thing”.

Can’t blame them for this one either.

The next big thing offers the payoff that a VC is looking for. In an Article by Jeff Nolan at Sandhill.com the problems with finding the next big thing in a world of incremental innovation is not a surprising issue. Incremental is easy, disruptive technologies are hard to find.

We don’t teach enough critical thinking.

The picture above from sandhill and how they invest is an interesting number to know, bur what is interesting is the information on page two, the trouble with Web 2.0. While techwag has lamented the fact that many web 2.0 products all look alike, there is more to web 2.0 than a glossy flash based interface.

What’s frightening is the inability to answer the basic question “What’s next?” The Valley thrives on “The New New Thing” (possibly one of the most poignantly titled books ever) and with every turn of a generation, there is an awkward moment where we’re just figuring out where we’ve been but have yet to see where we are going… Right now is that moment. Source: Sandhill.com

Right now is the moment to come along with something truly disruptive, and we have not seen it yet. That is a problem, it is a problem for the hype machine, it is a problem for the valley, it is a problem for Seattle, Boston, Austin, Colorado, and a host of other cities/states hosting many startup wannabe’s. We have looked at a ton of technology, few we continue to use because they make things easier for us to gather and collect what we are interested in.

Stumbleupon, Friend Feed, Linked In, Facebook, those are the ones we use all the time. They are immediately useful. To feed our links in friend feed, we use twitter to announce a post on the blog, we use YouTube for our videos (which we have not made many of lately), but friendfeed ties everything we do on the Internet in a nice fashion.

Little of it is innovative, stumbleupon owes its existence to the success of Digg and Reddit, friend feed owes its success to being just another aggregation system, only this time it is personal, twitter owes its existence to some of the early communication systems that existed that only could handle 140 text characters (it looks a lot like the old military order wire system), Facebook owes its success to Harvard and to the success of MySpace. They all tie into some other system in the past that lead the way.

If you have the next big thing, what are you basing it on? Is it just an incremental improvement, or is it really something truly innovative and disruptive?

Keywords: vc, funding, digg, reddit, innovation, money, funding, stumbleupon, facebook, friend feed, internet