Matt Ridley: How Innovation Works, Part 1

Innovation is the child of freedom and the parent of prosperity.

Most of the time, innovation is an incremental process. It looks disruptive when you're looking backwards, but at the time, it's surprisingly gradual. The first version of a new technology looks surprisingly like the last version of an old technology.

This pandemic is accelerating things and forcing people to work remotely. Twitter recently announced that they're going fully remote. Many of the companies I'm involved with are wondering if they should even go back to having an office. I wouldn't be surprised if the next Silicon Valley moves to the cloud. That would be an incredibly good thing for all of humanity because then we could distribute it.

Invention is the coming out with a prototype of a new device or a new social practice. Innovation is the business of turning a new device into something practical, affordable, and reliable that people want to use and acquire.

The crypto system is starting with finance but laying the foundation for future companies to be built completely distributed with potentially anonymous contributors, anonymous funding, anonymous cash, and anonymous developers.

This is something that you learn in Silicon Valley very early on—ideas are a dime a dozen. Every idea has been floating around. Even a lot of the old ideas that failed were initially bad ideas had at the wrong time.

I wouldn't be surprised if in ten years from now, the rest of the tech industry is just as distributed as the crypto industry is today.

Innovation is a process of evolution, and like any process of evolution, it requires trial and error. Innovation happens by taking the body of innovators that surround you one step further, engaging in lots of trial, having error, and obtaining feedback from customers in the economy. All of those pieces are necessary.