Large successful organizations have a hard time creating large scale innovations. When a company’s on the brink of death, they entertain many radical alternatives, but economic health is the enemy of change — which is one of Microsoft’s great problems. Ray Ozzie, now the Chief Software Architect of Microsoft, was at Lotus development when they dominated PC software. According to my friend and Diamond Fellow, David Reed, Lotus was making a lot of money and investing in R&D, but Ozzie wanted to build his own start-up. Because Ozzie had delivered Symphony, an updated version of the 1-2-3 software, Mitch Kapor agreed to help Ozzie find the funding. By late 1984 Ozzie founded Iris corporation, backed by Lotus, because he was convinced that groupware would transform business. There were a number of interesting features of the deal. First, Lotus agreed to fund Iris’s development efforts as long as …