Posts Tagged ‘lifecycle’

Assuming this is truly the end of the recession, we can all look forward to a spate of product innovations unlike any since World War II. These products will solve previously unknown problems in brilliant new ways and make their manufacturers millions. If you’re in the business of designing, making or delivering products, the anticipation can be thrilling . . . or daunting.

After all, how exactly do you innovate? Tons have been written on the subject, and yet innovation still comes off as requiring either genius or black magic. If your company lacks a systematic framework for doing innovation, it’s not prepared for this new global economy.

Here’s ours. It’s not really magic: it just works that way.

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Buyers are complex, goal-driven analyzers and organizers of the world around them who are uncompromising when assessing their own experience. Our machine lets you design or adjust that experience by turning a few metaphoric dials.

Here’s how it works. People buy products to achieve outcomes. But rarely can they achieve those outcomes with a product alone. Products often need other products or services to form more complete systems, which in turn may need some kind of infrastructure (e.g., electricity, a road, etc.) to make the product go. Even then the user may need other requisites to use the product — anything from additional people to specialized skills. And of course, not all users are the same. They may use the product in very different contexts — for different purposes, in different environments, in different time frames.

When people evaluate a product, they weigh the outcomes achieved against the requisites required. Whether you’re a product manager, CEO, engineer or whatever, your job as an innovator is to maximize the outcomes while minimizing the required requisites. You do this by modifying the product, the system or the context in which it’s used.

Let’s take an easy one, Coca-Cola. Coke didn’t come in bottles until someone imagined users consuming it in a context other than the soda shop. That idea led to eliminating the requisites of a soda fountain (infrastructure) and the skills to use it — dramatically changing the outcome-requisite equation. Questioning the system comprising grocery stores led to vending machines. Rethinking the purpose led to Diet Coke.

Innovation can be hard to come by if you try to ideate too much at once. Instead focus on very discrete aspects of the user experience as defined in our innovation machine. It works, like magic.

I was having a heated discussion (and a few margaritas) with dear friend about the merits and perils of entering a category after it has fully formed. On one side, you have the opportunity to be a fast-follower. On the other, you can just as easily become a failed-follower. In the end, I believe there is nothing inherently good or bad about being a late entry, provided you position yourself according to your timing.

Almost every product or service exists in a category along side similar products or services.  Just as products have a life-cycle from introduction to discontinuation, so do categories. The goal of positioning should always be a move toward category dominance (Technically, that’s when your product has twice the market share of any competitor).  Your positioning strategy should be guided by the timing of your entry into the category.

The following illustration shows the relationship between positioning strategy and timing. I’ve borrowed the adoption life-cycle curve from Geoffrey Moore’s Crossing the Chasm. It describes the number of new buyers entering the market for products in a category — not the lifespan of the category. (A category can go on for decades even if no new buyers are entering the category.)

On top of Moore’s lifecycle curve, I’ve overlayed four different positioning strategies — each coinciding with a specific point in the category’s maturation.

A new product can be launched (or repositioned) in a category at any point in the lifecycle.  How you position the product should be based on when it’s launched.

Market-forming strategy:  A useful definition of a market is “a group of people with a common problem who reference each other.” A market forming strategy identifies groups of people who don’t yet realize they have a problem and may or may not yet reference each other, but they have the potential to come together around an innovative idea and form a market — e.g, FedEx or Starbucks.

Category-creating strategy:  Most new products are clumsy, incomplete, flawed in ways that contribute to their getting stuck in what Moore called the Chasm.  If the shortcomings are real, a second-mover might exploit them and turn a quirky technology with limited appeal into a significant new product category.  I can think of no better example than the iPod. It isn’t just an mp3 player: along with iTunes and the iTunes Store, it’s an entire personal music system, the like of which never before existed.

Benefit-surfacing strategy:  Once the category has caught fire, you can’t expect to get in front of it without offering a fundamentally different reason to buy.  Amateur golf was enjoying a surge in popularity about the same time Callaway introduced the Big Bertha.  While other clubs touted distance and control, Big Bertha offered forgiveness — exactly what the amateurs needed, even if they previously didn’t realize it.

Delivery-differentiation strategy:  New products can be launched even when the category is fully matured and the number of new buyers is waning.  But the focus needs to shift from the product to the way it’s delivered. Laggard buyers often lag because the product benefit doesn’t outweigh the hassle of getting and using it. This is not the time for a faster, better, cheaper product; but faster, better, cheaper system for acquiring and using it.  In other words, Amazon.

Late in the lifecycle, new benefits and even better delivery systems tend to take a back seat to price.  The goal should be to so significantly change the user experience that it’s no longer comparable to its original category.  For example, Miller Lite is not a beer; it’s a light beer.