There’s been a lot of debate recently about the dangers of incrementalism. Peter Thiel wrote a whole book about it and Elon Musk is celebrated in part because his startups are so bold. Much of the criticism of incrementalism points to the swathes of apps and social sites that have been created in recent years as evidence that without big thinking you don’t get anything worthwhile.
These polarised opinions point to some important truths, but are also dismissive of some important developments.
It’s true that some, maybe even many, entrepreneurs build products that are only slightly better than the competitors that they copy, and that many others try to iterate their way to success from an impossibly poor starting point. However, it’s also true that some founders of apps and social sites build products with tens of millions of users and whilst they may not have changed the world it’s safe to say they have bettered people’s lives.
That is to say that company ideas don’t have to be as big as SpaceX to be worthwhile. There are lots of companies that are worth $100m-1bn that have made small but significant dents in the universe. Here in the UK I would put consumer companies like Mind Candy, Boohoo, Hailo and Zopa in that category (the last two are in our portfolio) as well as a host of B2B companies including the AI company Deepmind which was recently acquired by Google.
However, whilst smaller ideas can be worthwhile they still need to have some meaning, an intent behind them. Zopa’s founders were rallying against the bureaucracy and inefficiency of banks and Mind Candy was about creating amazing game experiences.
That intent informs initial product ideas which are then most efficiently developed and tested using iterative methods, but it’s the intent that provides the initial leap forward. Critics of incrementalism sometimes also criticise lean startup and other iterative development methodologies, but that confuses the best way to develop an idea with the quality of the idea in the first place. It’s true that some founders practice lean methods on low quality incremental ideas, but that doesn’t mean that all ideas developed with lean methods are low quality.