Tag Archives: Chasm Group

The risk of NOT innovating

We are at that time of the year when many of us are working on next year’s strategic plans. A question that often arises is, “What is the risk of [doing something new]?” What is asked less often is, “What is the risk of not doing something new or distinctive?”

‘Innovation = life’ when you court early adopters

In newly emerging markets—be they as high-tech as augmented reality or as low-tech as fashion—the answer is obvious. Innovation is occurring all around you; those who so not innovate enough will be left behind. The challenge here is to stay ahead of everyone else (instead of copying the innovation of others).

Examples:

  • Facebook out-innovated MySpace, Friendster, and everyone else
  • Can you name three competitors of Amazon from the late 90s?
  • FourSquare crushed Gowalla (and is standing up to Facebook)

Innovation allows you to ‘cross the chasm’

When you are entering the tornado, (i.e., when demand takes off and the top leaders are established), the speed of change requires innovation to shift from creation to speeding and scaling execution. You need to be able to out-market, out-deliver and out-support the competition. If not you will find yourself as Chimp (or worse).

Examples:

  • AOL out-ran all other ISPs—including a buy-or-break challenge by Microsoft
  • McDonalds’ innovations in franchising has enable it to serve billions
  • Ford’s Model T made cars affordable for the masses

Innovation keeps leaders on top

When you are the leader, everyone is aiming to displace you. Innovation in marketing and promotion will keep demand for your product fresh. Innovation in partnerships and distribution will create barriers to block you competition. The challenge is ensuring your teams know they have to keep innovating once they have reached the top.

Examples:

  • Intel is still the worlds largest chip maker (in a world with Moore’s Law)
  • GE is the only original Dow Jones stock still independently trading
  • Nike has been the top provider of sporting equipment for decades

Innovation is the only way to disrupt the leader

The familiarity and market share of leaders gives them enormous advantages in terms of cost of sales, speed of sale, distribution, etc. If you are smaller, you cannot disrupt a market leader by being playing “me-too” (unless the leader makes a big mistake). You need to “change the market” by meeting needs your customers did not realise they had or delivering in ways established “leaders” cannot match.

Examples:

  • Salesforce is worth nearly 3x what Siebel was when it sold to Oracle
  • RedBull has wings
  • President Obama’s campaign managers used social media, mobile, and CRM software to raise more money than more-established opponents

Innovation is the only way to ensure life in the future

Clayton Christensen has written volumes on need the foster disruptive innovation to ensure your remain a leader in the future (see my notes below). If you do not invent the future, someone else will—moving your market to a place where they lead (and you do not). If you want to avoid this, you have two option (ones that need not be mutually exclusive): 1) create incubation teams to innovate the future or 2) acquire proven innovators (this can be expensive).

Examples:

  • Apple continuously invents the “next big thing”
  • Amazon is selling more books on Kindle than in print
  • IBM went from typewriters to computers to services (and acquisition of many business information infrastructure innovators)

So what is the risk of not innovating?: your entire future

Notes: This post draws on two of my favorite books, “The Innovator’s Dilemma” and “Crossing the Chasm.” If you like this post, I encourage you to read “iPad’s Climb Up the Disruptive Innovation Cycle” by Hutch Carpenter and “Social Networking Sites, Market Segmentation and the Innovation Cycle” by Digvijay Singh.

Gartner’s 2009 “Hype Cycle for Emerging Technologies”: Reflections and prognostications

The 2009 Gartner Hype Cycle Special Report evaluates the maturity of 1,650 technologies and trends in 79 technology, topic and industry areas. I applied the Gartner Hype Cycle Concept to the Web 1.0 Internet Boom and (current) Web 2.0 Slope and found Search to be a key Web 1.0 winner and an overlay of Meritocracy to Search Results to be a big bet for Web 2.0…

Gartner’s Hype Cycle Special Report for 2009

The Gartner Group just published their annual Hype Cycle Report for 2009. You can find the report here.

In an approach similar to that used by the Chasm Group, this report combines Schumpeter’s concepts of Creative Destruction for innovation with the ADKAR model for individual and organization change management. It proposes that new innovations and technologies traverse five stages:

  1. Technology Trigger. When some event or product triggers rapid growth in the use of the technology
  2. Peak of Inflated Expectations. When the “bubble of hype” (vs. the achieved results) regarding use of the technology reaches its peak
  3. Trough of Disillusionment. When the bubble bursts and people say, “I told you that was just a fad.”
  4. Slope of Enlightenment. When the technology becomes sufficiently mature, standardized and adopted to start generating mainstream market results
  5. Plateau of Productivity. When these results begin to flatten out and reengineer of use of the technology (or a new technology) is needed to create big productivity changes

The diagram below captures a snapshot of Gartner’s view of “what technologies are where” on the current lifecycle. What has captured the attention of most is that Micro-blogging (e.g., Twitter) is now entering the trough.

gartner_hype_cycle

A Reflection on The Internet (Web 1.0) Boom

Reports like this always serve as a good trigger for reflection on the past. My experience is not broad enough to look at the entire technology world of the last 10 years. However, I have been lucky enough to have broad experience in the Internet “Web 1.0” boom. Here are my reflections on how three technologies of the Web 1.0 Internet Boom weather Gartner’s Hype Curve:

Big Winner: Consumer-based Search Traversed the Curve Most Successfully

Search radically changed how we live. We no longer spend lots of time looking though reference materials (from newspaper stock prices to encyclopedias) to find information we need. We now use search, enabling us to find information much more successfully.

Companies like Google have shown this can be a moneymaking industry. However the flatting of competition shows the curve on innovation is also flattening. Clearly something new is needed to create the next spike

Work In-Progress: Enterprise-based Search Is Still Stuck in the Slope of Enlightenment

We still do not have equally powerful search techniques inside the enterprise. Imagine how productive we could be if we simple search for answers to basic questions at work (instead of looking for the internal expert with tribal knowledge.)

Today, most enterprise search engines do not use good algorithms, generating results based primary on document titles. This is still an industry where someone could make a killing if they made it easy both to index a wide range of knowledge sources and search on them effectively.

Left Behind: Instant Messaging

Instant Messaging (IM) was incredibly powerful. I still remember the recorded phone call at AOL where a Customer Service agent showed a retired grandmother how to IM her grandchildren, reducing her long distance telephone fees (and making her cry with happiness when she initiated an IM session with her grandson). IM could have been used in so many places to transform how we communicate. However, it devolved into a service supported only by advertising of private network licensing.

This one makes me particularly sad given my years at AOL (especially my work trying to use IM to transform customer service). Imaging how much better it would be if we did not have to wait on hold (and if customer service agents could IM us links to answers). This does exist, but only in niche areas. The big transformation never came.

A Look to the Future of Web 2.0

Reports like this always serve as a good trigger for prognostication on the future (a scary topic that tests our wisdom.) What will be the biggest winner of the current hype cycle? Again, I am not going to try to boil the ocean of all technologies (groups like Gartner can do this much more effectively). However, I will go out on a limb and make a prediction for what will be a big winner in the Web 2.0 world.

I believe Online Meritocracy will be one of the biggest winners. Why? Because it is useful and it is a natural extension of what we do today:

Today we can search for information easily. In our personal life, if we want to find a gardener in zip code 91362 we can do this in seconds. In our work environment, we can also look up a list of approved vendors that we can purchase consulting services from. However, which of these groups are good? Simple Search does not answer that.

Kim Kobza, CEO of Neighborhood America, often shares a statistic that we are 9x as likely to act on recommendations from a friend or colleague than information found in impersonal references. If we can create technologies that enable us to overlay easily searchable feedback with search results, we can really find the information we are seeking. Imagine a world where I can find gardeners that my neighbors in zip code 91362 or consultants that colleagues in my corporate function have had good results from…

This requires combinations of search technology, social networking, content moderation, survey design, location-based searches and other technologies. We have niche versions of this technology today, mostly in the form of destinations (e.g., Angie’s List, Epinions or Amazon Customer Reviews). However, we don’t have the ability to easily stand this up anywhere we need it (e.g., a B2B, vendor or specialist network for my enterprise or integration of meritocracy into Google or Bing results). There is a lot of market share (and money) for the group who make this clear, easy to use and scalable.

Special Follow-up (January 2011)

The last 12 months have shown how social media, recommendations based on what your friends are doing and commerce have all come together in examples like the rise of Groupon and FourSquare.