Rob May outlines a fascinating hypothesis that product innovation has become relatively easy and now the competitive edge lies in marketing innovation. 

Coconut Headsets: Innovation is dead–it was killed by innovation, 2011-Oct-30, by Rob May

Innovation happens when it gets rewarded, and the rewards for product innovation are smaller than they used to be. It’s easy to get stuff built and it’s easy to copy new product innovations and be a fast follower, so your returns to product innovation are dropping.

But marketing… returns to marketing innovation are climbing. In a crowded world, getting your message out matters more, and is more difficult, than before. If you can figure it out, the gains can be huge. Look at Dropbox. I don’t buy this BS that the key was a great product. Why? Because there are LOTS of great products out there that don’t gain users as fast as Dropbox. A great product is necessary but not sufficient for good marketing in this day and age. Dropbox’s real innovation was in their marketing.