People innovate in America out of anger

UPDATE: 

I received a lot of comments on hacker news and twitter. Some of them asked “if anger is so important why is there not as much innovation coming out of Greece or Nigeria or Ethiopia” which misses the point.

1) Solving a problem and scaling the solution across America is a huge market opportunity and is also very difficult. America is the 3rd largest country in the world by land mass. It’s larger than China.

2) While I don’t know about innovation in every country, I think it presumptuous to assume no innovation is coming from other countries. But the scale is vastly different. With the exception of Africa as a continent. If an innovative solution can be developed in one African country it often scales to other similar countries in the continent. The largest mobile payment provider in the world? From Africa.

 

America suffers from poor infrastructure. The railway infrastructure in the USA was built primarily for the transport of oil (freight) and hasn’t evolved much since then. There is one railroad company in America built for the transportation of passengers, Amtrak. Amtrak is short for American Track, which is funny because it only covers half of America.

The majority of the tracks Amtrack runs on are owned by freight companies and Amtrak is beholden to the freight companies in many ways. For example, if Amtrak is late and misses its scheduled time on a freight rail line, the freight company can and often does force the Amtrak passenger trains to follow the slower freight trains. The average freight train runs between 10 mph to 79 mph while Amtrak has a top speed of 150mph.

While 150mph is nothing compared to other national rail systems, the effective speed of an Amtrak train is actually 79mph. Either because they are running on those rented rails from freight lines who have no motivation to upgrade the infrastructure to support faster trains or because they are rolling along at 20mph behind a train full oats. God bless America.

In the late 1960’s the US postal system was an unreliable and slow machine. It hasn’t improved much since then. Today I can fly from NY to San Francisco in 6 hours but if I send a 1oz letter the same route it will take one week. National firms in the late 60’s figured this was lunacy and instead placed company employees on planes to take interoffice mail between offices.

Putting people on airplanes was exactly how DHL got its start. Flying interoffice mail for companies between San Francisco and Honolulu. This mail transportation system was actually illegal and the US Government went through a lot to try and shut DHL down.

The founder of DHL, a guy named Larry Hillblom was a lawyer and had obvious physical abnormalities (and is alleged to have been a pedophile). After winning his battle against the US Government, he re-wrote the laws of a small nation as a way of saying F-U to the US Government, then had that nation sue the US at the United Nations. I think it’s fair to say he was a little crazy. Who would challenge the USPS then sue the US in front of the UN after changing the constitution of a small nation state? I think he might have been a little angry too.

Spending so much time in Japan made me wonder why so much innovation comes from the USA. I think it’s because despite being a wealthy country there are a lot of services in the USA that can be considered frustratingly “poor.”

People build solutions out of frustration and given the size of America, solving a common problem in America requires the infrastructure of a small multinational company.

If Amazon.com wants to ship books across the United States should they place all their faith in the Postal Service? Our rail and freight system? It requires an incredibly complex operation for Amazon.com to be able to ship a book from a warehouse to customer in three days anywhere in the United States because the infrastructure in the USA can be unreliable. But they managed to do it.

When Amazon.com expands to a country like Japan, where it takes one day to ship anything from one side of the country to the other Amazon still manages to reduce shipping to 12 hours. Suddenly they look like shipping geniuses. After going through the school of hard-knocks in the USA, it’s much easier to go abroad.

Airbnb exists because the hotel industry in the USA doesn’t add a tremendous amount of value outside of providing a safe place to sleep unless you are paying more than $500 a night. The entire Airbnb operation violates numerous state laws in the process. Despite that, they made it work in the USA.

With success in the USA going abroad is easy. Airbnb could never have started as a business in Japan where there just weren’t enough angry people prepared to ignore dozens of laws to make a buck or find a cheap place to sleep.

Uber exist because the taxi system in San Francisco is horrible. You make an appointment for a taxi to show up at 6:30 and they show up at 7:00 if they show up at all. Uber was built out of anger. Uber is compelling in a city like San Francisco where the taxi service is horrible, not as compelling in NYC where there are too many taxis most days. Uber couldn’t have started in NYC.

Many great innovations in the USA come out of anger and frustration and an attitude that makes Americans believe that when you see a broken system, you should replace it. When implemented across a country the size of the United States, Airbnb, Uber, DHL have to deal with laws and regulations unique to this country, in states the size of small countries. At this scale innovative is the only solution.

  1 comment for “People innovate in America out of anger

  1. November 30, 2012 at 10:26 pm

    You have a way with expressing a complex principle in a vey simple and strait forward way.I am most struct by your infrastructure example. I ride Amtrack on a regular bases and I never thougth about or realized the structure of the original purpose of the rails nor had I thought about it as insight toward innovation. Glad to know that you are still at the cuttung edge. American youth need your vison ,your insight and your forwarding thinking vibe.

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