Most New Ideas Are Terrible

I’m something of a tech nerd – I enjoy new gadgets and technology more than the average person. As a result, I keep up with the latest news and rumors in the gadget and gizmo space. I also follow the work of various tech reviewers and bloggers. One such person, Michael Fischer (aka “MrMobile”) posted a video recently talking about upcoming products he had a chance to explore at the Consumer Electronics Show. 

One of the first products he describes is the R1, made by company called Rabbit. This is a small device that uses AI to perform automated tasks on your behalf – they give the example of using a voice command to tell the R1 to order you an Uber, and it places the order itself without you needing to unlock your phone and use the Uber app. 

While Michael Fischer seemed excited about this device and optimistic about its potential, I’m much more skeptical. I’m not sure why I’d pay $200 to pull one device out of my pocket and tell it to operate an app for me, rather than just pull my phone out of my pocket and just use the app myself. And this is a reaction I have at seeing a lot of things on the cutting edge of the tech space – most new ideas seem pretty ill-considered to me, and most new product innovations seem likely to fail, or at best find only niche appeal.

And this very fact – the fact that new ideas mostly seem pretty terrible – highlights something I think is great about markets. 

Part of this relates to Vernon Smith’s insight about the interaction between constructivist rationality (deliberately thought out and articulated reason) and ecological rationality (emergent, evolving, and nonarticulated processes). As Smith put it in his book Rationality in Economics:

The constructivist rationality of the people who run Rabbit tells them the R1 is a good product many people will find helpful or useful. My constructivist rationality tells me this product will probably be a dud. But thanks to the market, we have a way to figure out who is right – because the ecological rationality of the market process will sort that out. I’ve certainly been wrong before, after all. I remember when the iPad was first announced, I thought it would be a flop.

All I saw when I looked at it was just an oversized iPhone that didn’t actually make phone calls. Who was going to want to drop several hundred dollars on something like that? Well, it turned out, quite a lot of people. 

If I had been assigned the role of Technology Czar and given sole authority to decide what new products would be available on the market, I would have prevented a lot of flops from ever occurring. However, I would also have prevented some truly great products from arriving as well – products that I eventually came to use myself! And many things I thought would be great successes in fact turned out to be flops. The same would true for any other prospective Technology Czar, or Technology Committee. What’s great about markets is that nobody gets to be a Czar, and new ideas don’t have to be approved by committee. Markets allow a tremendous amount of variation to be generated, and markets generate selection from that variation using what Deirdre McCloskey calls market-tested betterment. So when I see a product like the Rabbit R1 on the horizon, it makes me smile. Someone has an idea for an innovation, and they are taking a chance to put it out there and see if it works. Maybe I’m wrong and it’ll be a big hit! But even if my skepticism turned out to be correct, the fact that new ideas get to be constantly tried and tested is a beautiful thing.