I was running an executive education class last week for a group of people from an engineering firm. At the course dinner, we had a speaker from a cutting edge research group within the firm who described a bunch of technology that will completely transform their industry when it hits.

The reaction of the class the next morning when we discussed that talk was interesting. Instead of saying “That stuff will never work,” which I think would have been their reaction at the start of the week, they said “None of that stuff has a business model.” And then we had a great conversation about what the business model could be, how it relates to their current business model, and how they can start planning a transition.

It reminded me of something I had just read by one of my favourite authors William Gibson in his collection of non-fiction essays Distrust That Particular Flavor:

A BBC executive working on another version of “interactive television” offered me a tour of a small research facility in San Francisco. He was interested in having me “do” something with this new technology: the lab we visited was devoted to…well, there weren’t verbs. I looked at things, watched consoles as they were poked and prodded, and nobody there, it seemed, could even begin to explain what it was I might be doing if I were to, uh, do one of these projects, whatever it was. It wasn’t writing, it wasn’t directing. It was definitely something, though, and they were certainly keen to do it, but they needed those verbs.

The business model is where you get the verbs. And without them, you just have a great idea that does, well, something.

But of course, it’s not that easy, is it? We do need the verbs. The reason that building a business model is so important (and so hard) is that it is hard to know in advance which verbs will work. Another quote from Gibson explains why:

The Internet, an unprecedented driver of change, was a complete accident, and that seems more often the way of things. The Internet is the result of the unlikely marriage of a DARPA project and the nascent industry of desktop computing. Had nations better understood the potential of the Internet, I suspect they might well have strangled it in its cradle. Emergent technology is, by its very nature, out of control, and leads to unpredictable outcomes.

And that’s precisely right – we often don’t know in advance how to best make our new ideas work. To find those verbs and build a business model, we need to experiment.

But that’s hard to do, and it leads to uncertainty, which most people hate. So why would you do it? In discussing why he started to get interested in vintage mechanical watches long after quartz made them obsolete, he says:

Collections of things, and their collectors, have generally tended to give me the willies. I sometimes, usually only temporarily, accumulate things in some one category, but the real pursuit is the learning curve. The dive into esoterica. The quest for expertise.

It’s one of the best descriptions I’ve read of drive we have to learn. That’s what leads us to come up with our great new ideas. Which then need some verbs so that we’ll know what they’re for.

That’s how my engineering friends can use that great new technology to transform their industry.

That’s innovation.