Innovation and the Credit Crunch: tell me a new, new story

This post is a response to a call for writing for this discussion.

I recently read London Lore: The Legends and Traditions of the World's Most Vibrant City by Steve Roud. One thing I learned from this book is the power of certain types of story to dominate over troublesome facts and details. For example, any tract of land in London that appears disused was once a plague pit: "The plague pit idea, for example is particularly common among legend makers...for many years any unused piece of land seems to have attracted the story to explain its condition, and in the last fifteen years or so there has been a veritable explosion of these stories."

Several other stories also recur: that buildings are haunted, that ugly buildings were built incorrectly because the architect got the plans upside down or that buildings hide secret tunnels used by "monks, nuns, smugglers... assorted kings and queens with motives criminal, religious, amorous, or if possible, all three."

In form and in content, the stories that people tell very often have much more to do with stories that other people tell and the stories that people want to hear than they have with the actual facts. Even though the world is a very complicated place with new things happening all the time that we need new concepts to understand, there is a tendency to explain it to ourselves in terms of the same few old old stories.

This was never more clear than in the way that the credit crunch has been reported, even in the supposedly "serious press". Runs on banks, announcements of job losses, and scape-goating of "greedy" bankers and short-sellers: these few stories seemed to account for almost all stories about the credit crunch. There were far fewer stories about the precise nature of collateralized debt obligations and how similar financial derivatives might be regulated in the future.

I think the stories that we tell ourselves about innovation are a similarly impoverished set. Internet success stories are perpetrated by geek geniuses in their bedrooms. The story of Google is of two really, really clever guys, not the story of Stanford University's enlightened attitude to intellectual property. The story put out about Facebook is that it is another "bunch of college kids in a dorm" success story, not the story of part-ownership by a defence research company part-owned by the CIA. But this in itself shows how hard it is to avoid one old, old story, without slipping into another (in this case a conspiracy theory).

As with the credit crunch, there is a real danger that clinging to old old stories can prevent us from making any real sense of new data that we need new models and new stories to understand. There's no way of getting away from what Steve Roud in London Lore calls "The astonishing power of narrative in our everyday lives." But perhaps by collecting stories which don't fit comfortably inside the same three or four old old formats and paying less attention to those that do, we can get a better understanding of what's happening.

Here are few just for starters:

• Ebay was started by a French-Iranian geek in his bedroom but almost as soon as the company started to make money he hired serious business people with MBAs into all the company's senior positions.(see The Perfect Store: Inside Ebay by Adam Cohen)


• Adobe started off as a hardware company and went through 5 years and at least as many business models before it started to make any serious money. Postscript started off as a way of describing the movement of ships in New York harbour. (See Accidental Empires: How the Boys of Silicon Valley Make Their Millions, Battle Foreign Competition and Still Can't Get a Date by Robert X. Cringely)


• Edison may have had some inspiration, and perspiration but a some of his success was down to theft from inventors like Nikola Tesla. (See http://en.wikipedia.org/wiki/Nikola_Tesla and The 48 Laws Of Power by Robert Greene)

For further information, contact Mark@agilelab.co.uk (07736 807 604) or Matt@agilelab.co.uk (07713 634 830)