While I have always been quick to point out that there is no such thing as “the New Economy” I have to admit that several playing fields have been more than levelled in the internet age, they’ve outright cratered.

What makes a lot of the innovation possible is the drastic reduction in the opportunity costs of failure. Examples range from telephony to the recording industry. Where once a state-of-the-art SS7 telecom switching station cost several million dollars to construct, today you can pratically hookup a laptop with
SER and Asterix to a PRI card and be in the same business for under two thousand bucks.

Yesterday if an artist wanted to record an album, he usually needed major label backing and minimum several hundred thousand dollars went into one album, and even the indie cinderella stories spent in the 10’s of thousands of dollars to record their sleeper hits. Today you can do it for, again, under a two thousand bucks.

So today in many cases we have virtually cost-free failure, and that fuels a lot of innovation. People don’t have to bet the farm, max out their credit cards and mortgage their house in order to give an idea a shot. They can bootstrap, edge-in or hell, spend one afternoon coding and 10 bucks on PPC and they’ll have a good indication of whether an idea may have legs.

Unsuccessful searches are opportunities in disguise

Out of all my ideas I realize the ones that seem to work best are those for which I have personal use for. Rather than sitting around trying to think up something to invent, I end up wishing for something I could use, right now. If it turns out not to exist, or at least I can’t find it, the lightbulb goes on. My basic assumption is I am not the only person looking for this, but I just may be one of the few who will do something about it sooner than later.

This occurred to me yesterday when I was explaining the origins of easyDNS to a reporter. It’s background was in another company where we kept running into the same problems whenever we added a new client and needed them to make changes to their domain name. So we built a system to solve this problem, and this tool took on a life of its own. Nobody remembers the original company.

Around the same time I was playing with what I called a “context-based junk mail filter”, because I wanted something like that but it also didn’t exist yet. A couple other guys joined in on the collaboration but eventually, it just petered out and died on the vine. But then one of the guys took that failure, refined it, made it into something new, and you may have heard of the result. It’s called SpamAssassin

I’m constantly spinning out ideas and launching things and they don’t always get off the ground. I have one website I launched last year and I’m the only person using it. It has lots of members, they never actually activate the service. I personally find it invaluable,but I consider the site, on the whole, to be a flop. It didn’t take much more than some coding time and a server.

Failure in this context is no big deal and one person’s failure may be an acorn for somebody else’s grand slam.

So build things that you find useful for yourself. There is no shame in building yourself a tool even if nobody else uses it. Even if it stiffs, it may plant a seed that somebody else can run with.

It all adds to the sum total of knowledge and exerience.