The ‘Reverse Causality’ Trap: Embracing Nonlinear Innovation
Companies around the world are faced with increasing costs, greater technological complexity, and growing data regulations that all dictate how a business can operate. In the face of these growing challenges, why do they struggle to come up with genuinely innovative solutions—and actually adopt them?
At the Nordic Data Festival in Helsinki, our CEO John Bruce delivered a keynote on the problem with a phenomenon he calls “reverse causality.” It’s when companies believe they can predict the success of future products based on the results of past ideas. He encourages organizations to break out of this limited mindset and open themselves to the possibilities of true innovation.
Below, we share three key takeaways from his talk that will empower business leaders to shape a better future—for themselves, their organizations, and their customers:
- Don’t Fall for the Trap of Reverse Causality
When deciding on future products or services to invest in, companies often turn to complex forecasts and analyses of the total winnable market to make decisions. They look back at the history of a successful product and try to tell a neat and tidy story of why it was a success. This phenomenon is known as reverse causality. Of course, this type of linear innovation can play out well and lead to faster and cheaper services. But these ideas are rarely paradigm-shifting.
Take a look at Inrupt’s co-founder, Sir Tim Berners-Lee. When he invented the World Wide Web, no one understood how powerful it would become—now, every organization has an online presence, and relies on the web to connect with their customers every day. When businesses step outside of reverse causality, and are willing to explore the potential of emerging technologies without knowing exactly what will happen, they can create better and more powerful business paradigms.
- Evolve ‘Pipeline’ Businesses into ‘Platform’ Businesses
Today, both consumers and organizations are frustrated by the state of the online experience. Users are fed up with surveillance capitalism, and businesses are stuck trying to collect as much data as possible to even try to guess at their customers’ intentions. Web 2.0 has evolved in a way that only truly advantaged a few major companies, leaving other businesses and all consumers without any real economic gain.
“The digital world is at a real tipping point.”—Inrupt CEO John Bruce
What can we do to fix this relationship? The biggest businesses on the web today are platform businesses—companies that don’t only ship products, but act as an intermediary between supply and demand.
To act as a next-generation platform business, organizations need to truly understand their customers to properly bring together supply and demand. The best way to do that is to open up a genuine dialogue with customers about what they want.
Technologies—such as Solid—already exist today that allow organizations to truly understand their customers’ intentions, leading them to offer better products and customers to once again delight in trusted digital business relationships.
- Embrace Nonlinear Innovation
When business leaders embrace nonlinear innovation, they open themselves up to a world of previously impossible ideas. The state of the digital world today presents endless opportunities for companies to innovate and take advantage of shifting customer sentiments, emerging regulations and technological transformations—but only the most forward-thinking companies will break out of the trap of reverse causality and embrace true change.
“Some of the most significant shifts in economies and ecosystems are examples of nonlinear innovation.” —Inrupt CEO John Bruce
Interested in learning more about how Inrupt’s Solid technology can help your organization provide genuinely innovative solutions? Get in touch today.
