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Exit and Experimentation Drive Innovation

November 5, 2012

Patri has a post up over at TSI on the relative weakness of “voice” to effect change:

Imagine it is 1998, and Digital Equipment Corporation’s “AltaVista” is the most popular search engine on the young internet. Two Stanford graduate students, Larry Page & Sergey Brin, have an idea for a better search engine. With DEC’s annual shareholder meeting coming up, Larry & Sergey organize an activist campaign, soliciting their community to write letters to the board of directors and distributing material to current shareholders. Their goal is to get nominated, then elected to the board of DEC so that they can implement their new algorithm in Alta Vista.

With no proof, no website, no users – only claims about their algorithm – their attempt fails. DEC assigns a small research team to investigate new search algorithms, but with a successful and enormous popular website to run, company management is only willing to authorize small tweaks that don’t risk offending current users. Larry & Sergey go back to focusing on their studies, and Google is never born.

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