Thanks again for the great discussion!

On problems solved, the underlying concept that drove Christensen’s stating the issue in that way begins with what sales reps call the FAB framework. FAB is features, advantages, and benefits. In software, benefits are task performance, or doing a job. Advantage claims come from weak differentiation.

On marketing vs. tech, see “War in the Boardroom” by Al and Laura Ries. It talks about the way left-brain managers and right-brain marketers. Being both a manager and a marketer, I see the need to do both technological innovation and branding, so no, I’m not passive. Being a value merchant, I know that I have to address a wider range of messaging that just innovation and brand.

As for category emergence with its market leader, and the market leader’s next challenge, I go back to Moore’s technology adoption lifecycle. Entry into the late market kills companies. You either arrive reaady and conscious of it, or you go out of business. It is also in the late market that you have to brand, as in advertising, because you are in the red ocean. Frankly, I’ll come out with another disruptor, and leave the end of life to a product manager. Entry into the late market is the end of organic growth for that technology and the products based on it.

Innovation is a wide word that I tend to use narrowly and others use broadly. In “Living on the Fault Line,” Moore talked about the need to limit differentiation to being that that matters. I’ve worked in places that changed the red background art to green. Call that an innovation if you must, but if you follow the technology adoption lifecycle, there are times to innovate the carried, the benefits, the job being done, and the rest is innovating the carrier. Most of the discussion by product managers is about the carrier, or churn to the real business value of the carried.

As for Twitter, it is currently in the geek/technical enthusiast (non-)market, a non-market, because you can’t monetize this market, rather you leverage it to reach people other than yourself who have a real job to do. Enabling this you end up with a product to sell into a vertical. Then, you repeat. And, then …. The place where we really innovate is pretty distant from the everything is innovation crowd. Some of that crowd never ever visit that place.

The real place to compete is in the construction of a category, and the winning of the market leader spot in that category. Then, oddly enough, it is the market, rather than customers, that gets the buying done. But, this only lasts so long. Microsoft branded quietly for years, and for investor communincations, rather than product. This beyond the geeks. They also provided free technical support, but not because the market made them do it. You might say that they spent money on tech support, documentation, etc. to create a market barrier for other software startups. We mimiced them at our expense, but since we were not the market leader, customers demanded this from us.

All processes are phase specific in the technology adoption lifecycle. What I will do in one phase, I may not do in the next. I may wait to do something that everyone else things of as being constant and always.

On the proprietary nature of HHI, I’ve run into the profit pool concept, which is very interesting, but when you want to create profit pool representations for your industry or category, or potential blue ocean competitors, you run into the problem of finding the data. Historical data is a matter of public record, but forward looking or real-time data would involve collusion. You might be able to do that if you have a standards body approving the standard before members code competing products. That standards body could gather the data without legal issues, but then you have a best practice situation where everyone is doing it, so it provides no competitive advantage.

I’m also reading “Hype Cycle.” It presents another proprietary data situation.

If I only had revenue data, I would develop an estimate for average selling price (ASP), and back out an estimate of “units sold.”

I don’t have to look any further than my engagement with my current client. They defined a product that solved a specific problem for a set of users. I worked with them to add/change the problems being solved, and the people for whom the problems are being solved. The product is evolving. The addressable market is evolving. The solutions being provided are evolving. The positioning (using Roger’s definition) is evolving.

You might argue that as a consultant, I’m using a loophole since I wasn’t “hired” as an employee. I’d argue that the company founder was the original product manager, even if he has other responsibilities. He’s still the “top” product manager, and my decisions are really just “suggestions” :). Is that any different anywhere?

Positioning in the mind of the customer – ok, maybe, but I think it is a semantic distinction. While every customer (or potential customer) has their own perspective on where a product is “positioned,” every company should be defining what they want that perspective to be, and working to achieve it. I’m not willing to take a passive perspective on positioning (e.g. we are what our customers say we are) – that’s a valid static analysis. I’m going to engage my markets and help drive our customers and prospects to adopt the perception that my product is where I can compete most effectively.

One thing that confuses me in your second paragraph – you said “The next event for that market leader is entering the late market, a bad place to be avoided, and the place where every web startup starts.”

I really don’t understand where you’re going with that. I see Twitter as an example of someone who created a new market as a web startup – asynchronous real time communication. Real time was a red-ocean because of instant messaging. But it required symmetric relationships (people became “friends”). Many asynchronous communication mechanisms already existed (publish-subscribe model), but none of them were real time. The second movers (Pownce, Identica, etc) entered a “red ocean” here. I guess, by definition, most companies enter red oceans, since only one company can be first in any given ocean. Anyway, I probably just missed you point – if so, sorry.

On HHI data – in an ideal world (populated with unicorns – thanks Justin Burrows for the imagery), you would just access freely available market research data like I did for this article. Or have access to for-a-fee data. Barring that, you have to estimate. You can identify competitive products and their companies. By researching the company announcements, press releases, securities filings, etc, you can create an estimate of their sales. You can ask customers who they feel your competitors are (and why). I think those are the old-school “who plays in your market” approaches. I’m not an expert on this.

What makes a lot of sense to me is to identify the problems you solve for your customers, and then identify other companies and products that solve those same problems. That seems like a much better way to populate the list, while gaining insight into your customers’ needs. For example, if you are going to start an airline, your competition is not just other airlines – it is bus lines, trains, and people who choose to drive. The problem being solved is getting from A to B, not getting from A to B in a plane.