There are actually a number of those algorithms, often it is either a combination of two existing things (G+ is like Facebook but with asymetric relationships like Twitter); a twist on something that already exist (Firefly is a western but with an oppressive government set in space); or (but mostly with physical things) something that is not as good as what was previously but ordinary people can afford it (indoor plumbing which is not as good as servants preparing your bath, but much much cheaper or the Ford T).

Sometimes it is a mixture of these.