How quickly is your market changing? Bet it’s faster than you thought.
Michael Ray Hopkin points us to a great video presentation on the rate of change / growth in our society.
One of my favorites – the amount of unique information created this year will exceed the amount created in the previous 5,000 years.
Keeping Up Is Important
Keeping up with the changes in your market is important. In fact, someone has created a product that is driving the changes and defining your market. Is it your product, or someone else’s?
In our article about gaining or extending competitive advantage, we showed how product innovations cause a market to change.
Each innovation acts as a disruptive event. Within a short time horizon (maybe months, depending on your market), each disruptive event is comparably sized. As the video points out, time scales are changing – and the rate at which they are changing is increasing. Markets aren’t just changing, they’re accelerating.
Not only is it important that you innovate, but your product needs to be the one with the most recent innovation.
Pushing Ahead is Critical
The continual need / value of being the innovator that most recently modified your market leads to an obvious conclusion – you either need to be the company that is constantly redefining your market, or you need to be a very effective second-mover (a.k.a. fast follower). Everyone else increasingly gets left behind. Both strategies require that you stay on top of your market, and then innovate to move ahead.
Your Current Product
Think about what you’re working on today. Consider it relative to the changing markets and your competition. There’s a great line from one or all of (The Hustler, Rounders, The Grifters) – “If you look around the [poker] table, and don’t see the sucker – it’s you.” If you don’t think your market is changing…
Here are some products/projects I’ve worked on in the past.
- Goal: Replace man-weeks of engineering work during a sales cycle with automation that runs in a few seconds (with better quality). Disruptive. Dominated the market. Until the market reinvented itself, eliminating the need for the engineering work during the sales cycle.
- Goal: Duplicate existing [5 year old] eCommerce site with current platform that allows incremental improvements, with target to provide “same as every other eCommerce site” features.
- Goal: Consolidate data for tens of millions of customers from multiple channels, to discover market opportunities and drive business intelligence, while providing operational efficiencies that ‘pay for themselves.’
- Goal: Automate insurance agent licensing, compliance, and compensation to reduce regulatory risk while increasing incentives for agents and lowering operational costs.
- Goal: Redefine how people deal with [something I can’t mention] – rethinking a common problem with a novel solution.
The first one absolutely had a great value prop, and truly disrupted the market, then the company failed to stay on top of that market, and lost it. The second one doesn’t even talk about markets. The third one could be a game changer for the company, if it can leverage the data to drive business agility. Otherwise, it is just a nice cost reduction (and some very cool, but otherwise irrelevant) technology. The fourth one drives bottom-line improvements, presenting the company with an opportunity to invest those funds in innovation. The fifth one is all about innovation, and aggressively trying to reshape the market – focusing on the ideas that will be reality in a few months, not what was done years ago. Time will tell if the product is focused on the right market, or the right problems in that market.
What about some of your experiences? How much of your career has been helping companies dominate, and how much of it is slogging along as an also-ran?
Thank you for an interesting article!
Thanks, Anna, and welcome to Tyner Blain! One of the things I love about the internet is that not everyone reading this is in the USA, and a lot of our traffic is from folks overseas who aren’t just watching (American) football and eating poultry today.
Scott, Excellent application of one of the key points to the video! You point out nicely the importance of focusing on the market, anticipating upcoming changes, an innovating your products and services to stay ahead of the game. It requires consistent effort, which goes to the core of product management. And [for me at least] that’s what makes product management so fun and keeps it exciting.
I’ve worked on projects at companies on both sides of the innovation chain, and the ones that were trying to lead [dominate] their markets made for the best experiences, hands down. Thanks for the great insight! -Michael
The question is, is what is being innovated exceeding what is required? Will Intel be able to sell their new chips or are the ones currently in PCs, Laptops and cell phones “good enough”? Vista may be a superior operating system, but is XP good enough? The amount of technical information may double, but is that information relevant?
Clayton Christian posed the question about whether a company innovates beyond what their mass of customers require in “The Innovator’s Dilemma”. There is also a question about whether one has innovated beyond the point of delivering value.
There is nothing that says innovation is inherently good. Financial services innovated a tremendous amount of financial engineering. So much so that no one understood it, could regulate it or apparently manage it. Investment Banking has innovated itself out of existence. One has to remember that IB really does provide the very valuable and needed service of analyzing companies and allocating capital to those who can effectively deploy it. That IB has innovated it’s self out of existence isn’t the real horror.
The real horror is that because that IB paid so well that it sucked up a huge percentage of our best, brightest and most capable minds. Where did the engineers, scientists and doctors go? Wall St. Where are they now? Forget about the credit crisis, that pales in comparison to the crisis of IQ misallocation. For 30 years Wall St has been attracting the most capable and talented minds and focused them in an innovation competition, and just like Wiley E. Coyote, the entire field ran off a cliff, then looked at the abyss below and has collectively said ‘Help!’
You’re right that innovation can provide value, but there has to be a reason otherwise it’s a bridge to nowhere.
Andy E. Coyote
@MRH – Thanks, yep – the projects that push to innovate are the ones that provide me with the most personal satisfaction too.
@AM – Thanks, and welcome to Tyner Blain. You’re definitely right that innovation is not an end to itself. Innovation needs to provide differentiated value, or it is not worth pursuing (it won’t have an impact). Further, to your point, it needs to be directed in a positive way to have a positive impact.
You also make an excellent point about innovating beyond the capacity of your market to consume the innovation.
Scott,
I’m not necessarily a new commenter, we’ve actually exchanged emails. Anyways, giving you’re interest and work in blogging, you might find this interesting. It’s a site that does a Myers-Briggs analysis on bloggers based on what they write:
http://www.typealyzer.com
Quite fun and if you check out the analysis of my little blog, you’ll see why I like you so much…
http://tinyurl.com/AlignAssessment
Wishing you all the best,
Andy
The 18th century person didn’t need all that information. They filtered their consumption to reinforce their beliefs. With video, we can’t do that.
Information is a layered proposition. It doesn’t really matter how it explodes, because we live in a particular information space. That space is organized logrithmically, so it is difficult to move into those exploding layers.
These layers provide persistence. You still need those pedegoical layers before you can consume the explosion. Too much of the explosion is noise. In that explosiion are presentations that expand your understanding, but most of it remains inaccessible, and thus ineffective and impervious to your use.
Beliefs require pedegogy. Pedegogy provides the entry points into a culture, a community of practice. A culture makes information discontinuous. A discovery within one culture is meaningless outside of that culture.
Given that we ignore culture in our requirements elicitation, we don’t notice the texture of the information. It’s like we threw it all in a blender and just made a shake out of it.
I drove through a cloud one morning. It wasn’t fog. It was a real cloud just squeezing itself through the Rockies. A cloud clumps. Likewise, information clumps. Functionality clumps. Value clumps.
Bad Ass site thumbs up ;)
I discovered your weblog web site on google and check a few of your early posts. Proceed to keep up the excellent operate. I simply additional up your RSS feed to my MSN Information Reader. Searching for ahead to studying extra from you in a while!…