From the November 2009 issue of Entrepreneur

Make the Leap. . .

True innovation, Peter Diamandis says, means accepting risk--and failure

Peter DiamandisPeter Diamandis sees a future filled with brilliant innovation--with cars that drive themselves, software that can diagnose illnesses and humans populating new planets like subdivisions--but not without a lot of failure before we get there.

"If you're not willing to fail, to do something that fails and fails until you get it right, then you're stuck," says Diamandis, founder of the X Prize Foundation, a nonprofit group that holds global competitions to spur innovation in technology and other disciplines. "I fear that we have become very risk-averse in our society--when you do something risky, it means having a willingness to fail."

More and more, Diamandis sees fear of failure ruling the day. It's what makes business and government focus on safer, short-term goals at the expense of the long-term, and riskier, R&D needed for true innovation. Most funding today is directed toward what Diamandis calls "incremental innovation"--say, a faster computer rather than a "fundamental breakthrough" that could solve problems current computers can't.

With the X Prize, "we look for innovations where capitalism isn't doing its part," he says. The first X Prize awarded $10 million to Burt Rutan and Paul Allen for developing a vehicle to take tourists into space. A dozen new X Prizes, with funding that could hit $300 million, are aimed at eliminating wheelchairs with robotic legs, breakthroughs in clean fuel and connecting rural hamlets with cheap energy. The group is looking at a prize for the first car that can drive itself from New York to Los Angeles.

"Ultimately, innovation comes from identifying clear inspirational objectives and providing people with incentives to try to solve those problems," Diamandis says. "First, someone has to believe that a problem is solvable. If they don't, they're not going to go after it.

"Then, they need to have a clear goal of what they're shooting for. A friend of mine says, 'Without a target, you'll miss it every time.' Driving a breakthrough means not pre-guessing the solution of how you're going to get there."
 

. . .And Stop the Yammering!

When Tim O'Reilly hears the word 'innovation,' he knows he'll find anything but

Tim O'ReillyIs there any quality today that's more prized--and endlessly discussed, touted, even brandished--than "innovation"? Tim O'Reilly isn't buying the hype: He calls the era of the I-word "dead on arrival."

O'Reilly--co-owner of the computer manual and tech conference titan O'Reilly Media--knows the real thing when he doesn't hear it. O'Reilly launched the first commercial website, coined the term "Web 2.0" and was instrumental in the popularization of open-source software. His prescience, known as the "O'Reilly radar," has earned him a million followers on Twitter.

But call any of that innovative?

"If it is innovative, everybody will know," O'Reilly says. "Adding words to it does not help."

The current "innovation" overload is the result of folks who don't know what true invention is trying to pass themselves off as trailblazers.

"It's another word for envy," O'Reilly says. "They think there's something important going on. They don't know what it is. They know they've got to get some of it. It's like that old Buffalo Springfield song--There's something happening here. What it is ain't exactly clear.' "

At the center of the tech revolution for two decades, O'Reilly has had a ringside seat to moments of real breakthrough, and he's developed some unconventional ideas about how it happens.

"If I hear somebody bragging about their innovation, then I'm a little put off," he says. "If I hear somebody saying we want to be innovative, I hear it as a cry for help. Part of what I tell them is, if you want to be innovative, stop trying to make money."

He's seen companies throw away great ideas because it wasn't immediately obvious how to make money from them. Then smaller companies and entrepreneurs would come along and play with the idea, just because they're passionate about it. And they would be the ones to unlock the idea's potential and grow into the money.

"We find innovation where people are having fun," O'Reilly says. "If you do that, you kind of have almost a dowsing rod for innovation."