The blogger BankerVision, James Gardener, has posted an in-depth piece on how he thinks innovation happens, and how things become big hits.
His view, which I totally back up, is that innovation of the sort where something grips everyone, where something becomes the new big thing that everyone must have / do / buy, this happens through incremental improvements to existing things.
Whenever I have to explain what the new must-have technology, network or online community is, the answer is often an explanation of this theory.
James' summary is below, and his blog is well worth a read:"My key observation is this: breakthrough, radical innovations are never hits. Hits happen when a previous breakthrough is incrementally improved over time, and then shifted sideways into an aligned problem space where they cause a revolution. In all the cases I've been able to find so far, this seems to be true."