The Big Idea vs. Incremental Improvements - Problem #2

A Balanced Path to Innovation

The accompanying podcast was created with NotebookLM

This article is the second in a five-part series based on common business problems discussed in the popular Fish Food for Thought newsletters, The Human Condition. In response to the widespread interest generated by that piece, we are diving deeper into these problems, with this article focusing on the balance between big, transformative ideas and incremental improvements, a theme that resonates strongly across industries and leadership discussions.

The Allure of the Big Idea

Big ideas have an undeniable allure. Whether it’s Steve Jobs introducing the iPhone in 2007 and transforming not just the mobile phone industry but music, photography, and personal computing, or Elon Musk’s vision of colonizing Mars, bold, disruptive ideas have a way of capturing imaginations. They promise breakthrough innovations, market dominance, and lasting legacy.

Why do companies chase big ideas? There are several reasons, ranging from external market pressures to internal leadership desires. Venture capitalists often reward companies with potential for exponential growth, and executives want to lead organizations that will be remembered for transforming industries. The excitement of disruption, the thrill of being first-to-market, and the potential for massive profits all make big ideas an attractive pursuit​.

Take Apple’s iPhone launch, for example. When Steve Jobs stood on stage to unveil the iPhone, he wasn’t just introducing another phone. He was declaring a bold vision for the future, one where this single device would fundamentally change how we communicate, work, and entertain ourselves. The success of the iPhone exemplifies how a big idea, when executed properly, can reshape industries and drive innovation. However, as we’ll explore, not every big idea has this success story. Chasing big, bold ideas without sufficient groundwork can be risky, especially if they fail to meet market needs or operational feasibility.

The Risk of Overcommitting to the Big Idea

While big ideas can lead to success, they also carry significant risk, particularly when businesses place too much emphasis on a single transformative concept. The case of Juicero serves as a cautionary tale. This Silicon Valley startup raised $120 million to develop a high-tech juicing machine, only to see the product flop when consumers realized they could squeeze the juice packs by hand, rendering the expensive machine unnecessary. Juicero is a prime example of betting too heavily on a big idea that lacked practical value​.

Similarly, Google Glass, which promised to revolutionize wearable technology, failed to resonate with the public due to privacy concerns and an unclear value proposition. In 2014, Google set out to change the way people interact with the world through a revolutionary piece of wearable technology: Google Glass. It was supposed to be the next step in the fusion of the digital and physical worlds, a product that would seamlessly integrate augmented reality into everyday life. The device, a pair of sleek, futuristic-looking glasses, came equipped with a tiny display mounted in the corner of the user’s vision. By using voice commands or subtle head movements, wearers could take photos, get directions, send messages, and access the internet, all without needing to pull out a smartphone. But just two years later, Google Glass was quietly pulled from the consumer market. What was supposed to be the future of wearable tech had instead become a cautionary tale of misjudged timing, privacy concerns, and consumer hesitation. These examples demonstrate the danger of becoming enamored with a bold vision while neglecting to address fundamental market needs and consumer readiness​.

The Power of Incremental Improvements

In contrast, businesses that pursue continuous, incremental improvements often find greater long-term success. While big ideas promise radical transformation, small steps deliver sustainable progress over time. This approach allows businesses to experiment, gather feedback, and gradually refine their offerings without the high-stakes gamble of betting on one grand idea.

Amazon’s rise from an online bookstore to the world’s largest e-commerce platform illustrates the power of incremental improvements. Jeff Bezos didn’t start with a vision of selling everything from books to cloud services. Instead, Amazon’s growth was fueled by a series of small, calculated steps. Each step, whether adding customer reviews, personalizing shopping experiences, or optimizing its supply chain, was grounded in a deep understanding of customer needs. This culture of constant iteration is what allowed Amazon to launch initiatives like Amazon Prime and become a leader in cloud computing through Amazon Web Services (AWS)​.

Case Study: Quibi – The Rise and Fall of a Big Idea

In 2020, Quibi launched with all the fanfare one might expect for a platform backed by $1.75 billion in funding and led by two industry titans. Jeffrey Katzenberg, a former Disney chairman and co-founder of DreamWorks Animation, and Meg Whitman, former CEO of eBay and Hewlett-Packard, were at the helm. With their combined experience and vision, Quibi promised to revolutionize mobile video streaming with an innovative concept: short-form content specifically designed for mobile phones, or as they branded it, "quick bites" of entertainment.

The timing seemed perfect. Mobile consumption was booming, and people were consuming more content on their phones than ever before. Katzenberg and Whitman envisioned a world where viewers would watch high-quality, bite-sized episodes on the go, whether they were waiting in line at a coffee shop or commuting on public transportation. With an impressive war chest of funds and top-tier talent producing original shows, including Steven Spielberg, Reese Witherspoon, and Chrissy Teigen, Quibi looked poised to make a splash in the streaming market.

But despite its star-studded beginnings, Quibi’s fate was sealed before it truly had a chance to establish itself. What seemed like a winning concept on paper quickly unraveled in the face of unforeseen obstacles, misjudgments about consumer behavior, and a stubborn reliance on the big idea.

At the heart of Quibi's bold concept was a new format for storytelling. Katzenberg and Whitman believed that the future of video entertainment would be defined by short-form, high-quality content created exclusively for mobile phones. These "quick bites" were episodes lasting between 5 to 10 minutes, perfect for the modern viewer with a busy, on-the-go lifestyle. They envisioned people watching on their phones during those spare moments in their day when they had a few minutes to kill but didn't have time for a full-length TV episode or movie.

Quibi's content was designed to be consumed vertically or horizontally, with each viewing mode offering a slightly different perspective. The platform was optimized for mobile, meaning there was no TV or desktop viewing option. Everything about Quibi was built around the idea that consumers wanted quick, polished stories designed for the small screen, tailored to fit into the tiny gaps of their everyday lives.

With content spanning genres like comedy, drama, news, and reality, Quibi secured a roster of Hollywood's best talent. The buzz was undeniable. The entertainment world held its breath as Quibi prepared for its April 2020 launch, eager to see if this new format would usher in the next evolution of mobile entertainment.

Despite its initial promise, Quibi stumbled almost immediately out of the gate. Katzenberg and Whitman had envisioned people watching Quibi on the go. But when the pandemic hit and the world went into lockdown, there was no longer a commuter crowd looking for quick, mobile-friendly content. People were stuck at home, with far more time to consume long-form entertainment on larger screens. Services like Netflix, Disney+, and YouTube thrived as audiences sought out more immersive experiences. Meanwhile, Quibi’s rigid mobile-only format felt increasingly out of place.

Another critical miscalculation was the way Quibi underestimated its competition. While Quibi was banking on viewers to pay for short-form content, platforms like YouTube and TikTok were already offering millions of free videos that catered to the same quick-hit viewing habit. Moreover, these platforms had a major advantage: community and interaction. Viewers on YouTube and TikTok were part of a larger ecosystem where they could comment, share, and engage with content creators. Quibi, by contrast, offered no way for viewers to interact with the shows or each other, making the platform feel isolated and disconnected from the social aspect of modern digital consumption.

The final nail in the coffin was the pricing model. Quibi offered a 90-day free trial, after which it charged users $4.99 a month with ads or $7.99 for an ad-free experience. But with so much free content available on other platforms, consumers were hesitant to pay for something they could easily get elsewhere at no cost. Quibi’s premium pricing for short-form content didn’t align with what viewers were willing to pay for in a market where long-form, high-budget shows were available for roughly the same price.

Quibi’s downfall was not simply the result of bad timing or competition; it was the product of a rigid focus on its big idea. Katzenberg and Whitman believed so deeply in their vision of mobile-only, short-form content that they failed to adapt when warning signs began to appear. They ignored the shifting consumption habits during the pandemic, clinging to the belief that their content would resonate even as viewers gravitated toward longer, more immersive formats.

Even more telling was Quibi’s failure to recognize that the idea of short, premium content wasn’t as revolutionary as they had thought. Viewers had already shown that they valued interaction, community, and the flexibility to watch content on multiple devices. By refusing to deviate from its mobile-only approach, Quibi alienated potential users who would have gladly watched the same content on their TVs or computers.

The platform’s inability to pivot quickly in the face of changing circumstances revealed a major flaw in its strategy. Had Quibi been more flexible, more willing to listen to market feedback, and less committed to the grandeur of its initial concept, it might have had a chance to evolve and find its place in a crowded streaming market.

By October 2020, just six months after launch, Quibi shut down operations. Katzenberg and Whitman admitted defeat, returning what remained of their investors' money and pulling the plug on a project that had once been hailed as the future of mobile entertainment.

Quibi’s failure serves as a cautionary tale about the risks of betting everything on a single, big idea. While bold visions can certainly lead to success, they must be grounded in an understanding of market dynamics and consumer behavior. When a company becomes too fixated on its original concept, it runs the risk of ignoring the very people it’s trying to reach. In Quibi’s case, the inability to adapt to changing conditions and consumer expectations was the fatal flaw.

Balancing Big Ideas with Incremental Progress: The Case of Netflix

Perhaps the best example of a company that has successfully balanced bold ideas with incremental improvements is Netflix. When Reed Hastings founded Netflix in 1997, it started as a DVD rental service, a relatively simple concept. But Hastings had a bigger vision. He saw the future of entertainment in streaming, but rather than making an all-or-nothing bet on streaming from the outset, Netflix took a measured approach.

In 2007, when the technology and infrastructure for streaming video were mature enough, Netflix made its shift, initially offering a limited catalog of streaming content alongside its DVD rental service. Over the next decade, Netflix continually improved its service through iterative changes, enhancing its content library, refining its recommendation algorithms, and investing in original programming​.

One of Netflix’s most important incremental improvements was its focus on data-driven decision-making. By analyzing viewer habits, Netflix fine-tuned its user interface and content offerings, ensuring that each improvement was informed by real customer feedback. This iterative approach allowed Netflix to scale up its streaming service without alienating its user base, turning it into the entertainment powerhouse it is today.

Why Incremental Progress is Often Overlooked

Despite its advantages, incremental progress is often undervalued in favor of bold, attention-grabbing initiatives. This stems from the fact that small improvements don’t generate the same excitement or media attention as big ideas. Leaders and investors are often more drawn to the potential of major disruptions rather than steady, continuous advancements. Take Brian Chesky’s “new playbook” which moved Airbnb to semi-annual releases as a prime example. 

However, companies that embrace incremental improvements are more likely to stay flexible and resilient. They can adapt to changes in the market, test new ideas without overwhelming their resources, and make course corrections as needed. This adaptability is particularly crucial in fast-moving industries like technology, where consumer preferences and market conditions can shift rapidly.

While there are clear advantages to focusing on incremental improvements, the best approach often lies in finding the right balance between big ideas and small steps. Companies like Amazon and Netflix have succeeded because they didn’t rely solely on bold, transformative concepts. They paired their big visions with a commitment to iterative progress.

While admittedly the iPhone was a big idea, even Apple didn’t stop innovating after the initial success. Each new iPhone release brought incremental improvements, better cameras, faster processors, longer battery life, that built on the success of the previous model. This steady refinement kept customers engaged and ensured that Apple stayed ahead of its competition​​.

Conclusion: The Sustainable Path Forward

Both big ideas and incremental improvements play critical roles in driving business success. Bold visions can inspire breakthroughs, disrupt industries, and create new markets. However, without the disciplined pursuit of continuous, customer-centered improvements, even the most transformative ideas can falter.

For businesses looking to innovate while mitigating risk, the key is to strike a balance. Big ideas should be grounded in reality, informed by data, and paired with an iterative approach to execution. By combining the excitement of bold concepts with the discipline of small steps, companies can build the foundation for long-term success, ensuring that they not only disrupt markets but also sustain their leadership over time.

As we continue this series, we’ll explore the next challenge in the Five Common Business Problems series: "The Brilliant Jerk vs. Team Performance." This issue addresses a frequent dilemma faced by many organizations, how to deal with high-performing individuals who may be exceptional in their personal contributions but toxic to team dynamics. These so-called “brilliant jerks” can often seem indispensable due to their expertise or results, but their negative impact on collaboration, morale, and overall team productivity can be far-reaching. In the next article, we’ll delve into the trade-offs businesses face when managing such individuals, examine the long-term consequences of prioritizing individual talent over team harmony, and explore strategies for building a high-performing team culture where collaboration and mutual respect are paramount. Stay tuned for a deeper look into this critical business challenge and how to strike the right balance between talent and teamwork.