HBS Working Knowledge: Special Reports: Scott Cook: The Power of Paradigms What is clear, Cook said, is that the fundamental activity underlying paradigm shifts is directly related to the practice of good business in general. "That means getting the decision makers close to the customer," he said. "That's one of the distinguishing characteristics of HBS, in fact—to drive research and teaching close to practice, close to executives in their day-to-day lives." "The customer is the compass; that's where the learning comes from," Cook concluded. "And don't forget to truly respect surprises."

HBS Working Knowledge: Special Reports: Scott Cook: The Power of Paradigms "The biggest business innovations are not technology-based. Major breakthroughs come through a unique mindset or paradigm," said Cook (HBS MBA '76), citing eBay's revolutionary e-commerce model as an example. "There was no inventory, no guarantee that merchandise was authentic, and no easy way to pay for or receive goods—it might take a customer one week to buy a $10 item, and another two to three weeks to receive it," he remarked. "Needless to say, retailers and venture capitalists ignored him, thinking he was either irrelevant or crazy." When Benchmark Capital finally took a chance on the new auction site, eBay's IPO and subsequent stock movement rewarded the investment company with the single largest gain in the history of venture capital. The technology supporting the eBay Web site took its founder, Pierre Omidyar, less than a week to build, Cook continued. "What was significant was the power of this new paradigm or mindset," he said. "People who shift paradigms have the same facts as everyone else, but they see them differently. The end result either revolutionizes the customer experience, or the economics of the business, or both, as was the case with eBay."

Grow Your Site, Keep Your Users | Computerworld News & Features Story Sometimes even false user perceptions must be considered in designing new features. On a home-page redesign in March of last year, eBay produced a page that was "very colorful and looked very graphically intense," yet took less time to load than the older version, says Borns. However, in testing the page with a few thousand users, concerns arose. "We showed them an image of the page—it didn't actually work—and they said, 'This page has so many graphics on it, it's going to take forever to load,' " says Borns. "We knew it loaded faster, but because they thought it wouldn't, we ended up paring it down a little bit."

DaveNet : The power to publish as an individual Weblogs are the anti-newspaper in some ways. Where the editorial process can filter out errors and polish a piece of copy to a fine sheen, too often the machinery turns even the best prose limp, lifeless, sterile and homogenized. A huge part of blogs' appeal lies in their unmediated quality. Blogs tend to be impressionistic, telegraphic, raw, honest, individualistic, highly opinionated and passionate, often striking an emotional chord.

Innovating For Humans In general, though, software demands constant innovation for two reasons: to differentiate one product from another and to justify upgrades. If an innovation sets your product apart enough to increase its market share, others will imitate it and the differentiation will slowly disappear; to keep your software distinct, you have to constantly innovate. And to keep generating profit from existing customers, you work to improve your product in a way that is compelling enough to make people want to go out and buy it again. Innovation becomes a careful, strategic game in which everyone tries to innovate enough to distinguish their product and justify upgrades, but not so much that they alienate their installed base or step too far away from the familiar.