The Lean Enterprise: How Corporations Can Innovate Like Startups

Chapter 2

Strategy

The environment for innovation has evolved dramatically in recent years. Not long ago, raising capital was difficult, determining what people would buy was hit-or-miss, developing new products was slow and cumbersome, and attracting large numbers of customers was costly. These barriers have fallen as, in the memorable phrase of venture capital superstar Marc Andreessen, “software is eating the world.”

In an essay published in the Wall Street Journal in August 2011, Andreessen called attention to the fact that an increasing variety of products and services were being delivered in the form of digital code. A decade after the dot-com bubble burst, he noted, the infrastructure was finally in place to distribute software directly to businesses and consumers, via the Internet, to laptops, phones, tablets, and a growing variety of so-called smart consumer devices such as ereaders, wristwatches, and media players.

The book industry is a clear example. Bibliophiles once flocked to Barnes & Noble to buy the latest best sellers. Now they download them from Amazon.com and view them on their Kindles—no more printing, no more driving, no more brick-and-mortar stores. The same scenario is playing out in all the publishing industries—newspapers, magazines, maps, music, movies, games—but it doesn't stop there. Facebook and Google Plus hangouts are replacing face-to-face social events. Coursera, Khan Academy, and Udacity are replacing schools. Photography has become a digital ...