I’ve been thinking about something that I heard in a podcast recently (from the Stanford Entrepreneurial Thought Leader Series in iTunes U). The thought could be paraphrased as, “It’s as difficult to bring a small idea to market as to bring a big one, so you might as well do the big idea”. I’ve been chewing on that one for a while, thinking maybe my app idea isn’t quite… well, big enough. The other phrase that has been floating around in my head is Apple’s tagline, “Think Different”. What can I do that might build on all the work I’ve done so far, yet be bigger and different? I’m not abandoning my original idea of creating an app, just thinking of ways it can be bigger, tweak it somewhat. And you know, after a little thought, I came up with some interesting possibilities.
My original app idea was a more-of-the-same-but-a-little-bit-better idea, and I think it still has some potential. “More of the same” can be an obvious way to enter a market, since there’s a known market, with a known market size, known customers, etc. The problem is, it’s hard to distinguish yourself among your competitors, especially if they are well-established. If you’re going to be better, you have to be a lot better to woo customers away from what they are used to. On the other hand, if you do something different, something disruptive of the current models, you can create your own market space, bring in customers than you would never have had otherwise. That’s what I want to do. But if I do the bigger idea I’m thinking of, something different than the prevailing business models, there’s no data showing that it would work. In that sense it would be a disruptive business, as that term is used to describe new businesses, and there would certainly be a risk.
Thinking about disruptive businesses has led me to wonder about other new technologies and ideas and how they are introduced in the marketplace. To that end, I read The Innovator’s Dilemma by Clayton M. Christensen. It’s an excellent book about new or disruptive technologies and ideas, based on a load of solid research, describing why and how companies innovate (or as often, don’t).
Most of his focus comes from his data on the computer disk drive industry. Without going through all the details, it can be summarized by looking at what is happening in the industry right now with the introduction of SSDs (solid-state drives) for computers. They are an exciting new technology, with the potential to disrupt the older model of the spinning magnetic disk that makes up most drives today. It seems apparent that they are the future of the disk drive industry.
But why on earth would you want one? SSDs are smaller in capacity, more expensive, and cannot be written over as many times as a current model disk drive, so they would need to be replaced more frequently. Sounds like a great deal? Not! If nobody wants to buy them, however, how can they be introduced into the market? Existing companies don’t want to invest in them – it would mean abandoning something (regular disk drives) that happen to be selling pretty darn well right now, thank you, for a product that isn’t selling well and is a competitor to a profitable market. How do you convince your board of directors to go for that?
What you do is rethink the market for the product. For example, the advantages of SSDs are that they are faster to read/write, they are lighter and more robust, and they don’t have any moving parts so there is nothing to break. Therefore, they are really good for ultralight ultrafast computers, such as first-adopter computer geeks might use – expensive machines like the MacBook Air. It’s a new market, something different that may or may not sell, because it’s missing a lot of features people are used to in a laptop computer.
Over time, improved technology will allow SSD storage capacity to increase, making them more attractive to users, and economies of scale will make production more inexpensive, causing the price to drop, making them far more reasonable competitors for magnetic disk drives to the general public. Now the advantages of the SSDs become compelling and people will buy them readily. Since the existing disk drive companies are likely not to have invested in the new, untried technology, they will be left in the dust, and new companies that did invest in the technology will become established.
This simplifies a detailed book, but it shows Mr. Christensen’s basic premise of how new technologies and ideas are introduced into the marketplace. It can be hard to introduce new things, but with a willingness to give up preconceived ideas about how a product is to be used, it can be done. There are also several other lessons to be learned that I’ll save for my next post.
Next: Lessons Learned.