Wicked Innovation

We can lament the mischief of hackers, thieves, and tricksters-or we can learn lessons in innovation from them.

I love you.

I love you with a passion that burns like a white-hot nova. As a digital testament to my love, please put this magazine down and immediately go to to download a very special “I love you” screen saver. You’ll love it almost as much as I love you.

Are you back? Actually, I don’t love you. I never did. In fact, I’d think you were a few bits short of a byte if you ever clicked to such a site or opened an “I love you” e-mail attachment from someone you’ve never met. Nevertheless, millions of PC owners have had their machines brought to their metaphorical knees by viruses and worms (virms?) promising love from strangers, “wicked screen savers,” or compromising photos of Anna Kournikova. Lord, what fools we mortals be.

But let’s turn these bugs into a feature. Cold, dispassionate analysis affirms that such “virmen” are among computerdom’s most successful innovations ever. They’ve utterly transformed the network experience. They’re global; they’re local; they’re persistent; they’re pervasive. They cleverly exploit both human and technical weaknesses. They matter.

The proliferation and permutation of viruses and worms offers a superb case study in wicked innovation and innovative wickedness. Why do such innovations succeed? What can and should we learn from their continuing success? Just as society better understands health by better understanding disease, markets better appreciate healthy innovation by grasping the dynamics of pathological innovation.

Deception is at the dark heart of wicked innovation. Alluringly misrepresented e-mail attachments and “phishing” expeditions-the fraudulent use of corporate names and logos to gather people’s credit card numbers-are only the most obvious examples. The use of anabolic steroids, human growth hormone, and other illicit performance enhancers in baseball, football, and Olympic sports represents another genre of effectively deceptive innovation. In a field where the price of being found out is high, these “natural” substances give users a competitive edge with a low risk of detection.

Precisely because cheating is the essence of wicked innovation, we need to rethink the role of competition in its pathology. Two kinds of innovators stand out. The first are those who “compete with” each other; that is, they respect certain rules in their efforts to succeed in the marketplace. The second are “compete against” innovators whose goal is to spread their own inventions and eliminate their competition, free choice in the marketplace be damned. Compete-with innovation is about value creation; compete-against innovation is about value negation.

Microsoft vs. open source is a classic compete-with contest; both sides, for the most part, play fair. World War II’s “Battle of the Beams” between German and British engineers trying to coordinate-and thwart-electronic navigation aids for nighttime bombing raids is a perfect example of a compete-against innovation marketplace. The compete-against dynamic is an escalating innovation arms race where the economic goal is less to create new value for customers than to defeat or hoodwink the enemy. The conflict is defined by “measure vs. countermeasure vs. counter-countermeasure.” The result? Deceit, deception, and misrepresentation are the mission-critical media for compete-against innovation.

Viruses, identity theft, performance-enhancing drugs, phishing, and other compete-against innovations succeed because they so effectively exploit both human virtues and human venality. They alternately appeal to the seven deadly sins-vanity, sloth, envy, gluttony, etc.-and to our compassion and curiosity. “Social engineering” matters as much as technical engineering.

Equally important, wicked innovators prey upon the fact that in most arenas of technology, security and authenticity are afterthoughts. The Internet, for example, was never designed with security in mind; the most important protections have all been retrofits. Neither the Olympics nor Major League Baseball evolved with the expectation that so many world-class athletes would choose to cheat chemically. Pathological innovation has moved cheating from the margins to the mainstream.

Should compete-with innovators fight fire with fire and use deception of their own to combat wicked innovators? Should they give their customers and clients better tools to battle pathological innovation? Or should we simply throw up our hands, declare wicked innovation a “public policy” issue, and count on the regulators, courts, and legislators to rescue us?

The correct answer, of course, is “all of the above.” Honesty compels us to admit that dishonesty is often a superb innovation strategy. Compete-with innovators have little choice but to grow a bit trickier and more deceptive in their own security investments, creating tools such as the online “honey pots” that use dummy credit card data to lure in and trace hackers. Wicked compete-against innovators, ironically and inevitably, will increasingly drive innovation in compete-with markets. The single most important lesson pathological innovation teaches is that the economics of cheating play as great a role in defining value as the economics of adoption. You’ve got to love that.

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