I have to hand it to Seth Godin for his blog post today on what to do about Detroit. His point of view is this:
Not only should Congress encourage/facilitate the organized bankruptcy of the Big Three, but it should also make it easy for them to be replaced by 500 new car companies.
He goes on to describe that this is what it was like 90 years ago, and suggests what it could be like in the future. Great idea.
I would build on Seth's idea to suggest an increase in the incentives for companies that are built around consumer needs, rather than new technologies. Never before have consumers been so available, ready and willing to be part of the process. As I've said many times before, valuable innovation is not random. The tools are available for a company to identify a real need (not just a preference), define the market for it, and connect the dots for how their solution will satisfy that need. Companies who do this should be rewarded with the most incentives, as their value propositions will be able to support multiple types of products and services to satisfy those needs. They will have a clear roadmap, and will be less likely to get bogged down in the development of a solution in search of a market.
This could also provide a new perspective for the way VC's evaluate potential investments. But that is a story for another time...