Innovation is About Reading Between the Lines

To be average is to see what exists. To innovate, create, and be above average is to see in between what exists, to what could be.

Example of seeing in between: people use social media to connect, and people call taxis to get rides. What if the two were combined, and people used social media to get rides? That was the basis of Zimride, the original ridesharing service that later morphed into Lyft. Acquired FM did a phenomenal episode on this story, which you can find here.

Logan Green and John Zimmer (the co-founders of Zimride and later Lyft) looked in between things that already exist, and saw the potential for what might be. They combined things that already existed and remixed them (the basis for all creativity), and they read in between the lines of what exists.

Here’s an exercise: look at a city skyline. If you’re in a city, look at it in person (it’s more powerful that way). If not, look at a photo. Look not at what’s already there, but the spaces in between, and imagine what could be. What would the city look like with ten more buildings, twenty, fifty? Where is there empty space waiting to be filled?

To be average is to see what’s there — the buildings rising towards the sky, the concrete and the glass and the steel. There’s a lot to look at — the human engineering, the business, the industry. It’s enough to keep one busy for a lifetime, just exploring what already exists.

But exploring what already exists doesn’t create anything new. There’s no forward progress, no creativity, no exploration beyond the bounds of what’s known.

To be a creative force, look at what isn’t yet there.

It isn’t just about raw speculation and blind imagination. There are indicators one can learn to read to see what likely will be there in future — what will be needed, or wanted, or created by circumstance.

Human development and human needs aren’t random. There’s a spectrum of things humans need and desire, and a variety of circumstances that elicit those needs and create opportunity.

As an example: the following is an excerpt from David Perell’s newsletter, which came out this evening. It expounds upon this quite nicely:

Munger, China, and Vietnam

While traveling by bus in Missouri, I sat next to a Hong Kong based investor who recently had dinner with Charlie Munger at his home in Los Angeles. After hearing about his dinner, I asked him what he’s excited about. He responded with two surprising insights:

  1. China has the fastest growing elderly population in the world. Due to the one-child policy (enacted in the 1970s) and the country’s wealth boom, the elderly care industry is about to explode.
  2. He was more bullish on Ho Chi Minh City than any other city in the world. Median wages in China are growing fast, so manufacturing is moving abroad. A lot of the low-end manufacturing is moving to Bangladesh and the higher-end manufacturing is moving to Vietnam, a country with 95 million people and a 98.5 percent literacy rate. Thus, he believes that Vietnam is an attractive place to invest.

This investor is looking at a) what will be (the circumstances that are unfolding and the needs and opportunities that will arise) and b) what could be (how to capitalize on those opportunities).

Human desire is based around pain points and needs, and opportunity is created by fulfilling those needs. Learning to predict needs helps you see the spaces between what currently exists in a constructive way, that allows you to treat them as opportunities to be intentionally executed on.

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