commentary
Predicting the impact of an innovation
Monday, November 9th, 2009 | commentary, product vision | 2 Comments
Over at Steve Portigal’s blog there was a discussion of France Telecom which has been introducing high quality audio to cellular voice calls. (This is #7 on my 10 UI Wishes for 2008.)
A commenter asked, and I paraphrase, “The question is, will people care? Is existing voice quality ‘good enough’ that a jump in quality won’t matter that much?”
What is important about this question is that it gets to the product vision skill of being able to distinguish revolutionary technologies from those that only sound revolutionary.
One guy seemed to think HD audio was radical, “This is a bigger innovation than cameras on handsets or app stores for the industry.”
Is he right? Here was my response on Steve’s blog:
Will customers care about HD audio? I like to think about these things in terms of needs. The HD audio people cited in the NYTimes thinks that this is more revolutionary than the camera in the mobile or the app store.
The guy is wrong. The cellphone camera and the app store are important because they enable the satisfaction of a host of new needs and scenarios. You can now email a picture of a sinking airplane from a boat on the Hudson river. The innovation is valuable to customers because more real needs are being met. Simple as that.
HD audio,while difficult to do and very welcome, is still an incremental innovation to customers, because it merely does a better job of addressing needs that were adequately covered for the last 70 years.
In the market, incremental refinements like HD Audio are not irrelevant, but they tend to be tie-breakers. Given two otherwise equal offerings, a customer might as well choose the more refined one.
Eventually the competition responds, and the refinement becomes table stakes for all players. But until the advantage is neutralized, the company with the more refined solution has bragging rights that can distract customers from more important unmet needs.
It may be fairly obvious that HD audio is a nice-to-have, because we are all intimate users of telephony. However this way of thinking — connecting the technology back to scenarios and needs — applies to less familiar ideas. It’s a useful way to break through reality distortion fields and make predictions about the true relevance of exciting looking technologies to customers.
What is a realistic growth rate?
Wednesday, October 21st, 2009 | commentary | No Comments
What is realistic growth rate to expect for a high-potential startup?
Here is an inflation-adjusted chart of 100 high-tech companies (click for interactive chart):
This chart is a useful reality check on business plans. It’s very hard to be a “rocketship” – one of the red curve companies in the chart that attains $50mm within 5 years. Neither Microsoft nor Oracle did so and if your business plan says you will, it’s probably incorrect.
Steve Blank on Customer-Driven Development
Friday, October 16th, 2009 | commentary | No Comments
Fantastic slide share by Steven Blank. Ostensibly on Customer-Driven Development, but really about so much more:
Complexity slays giants
Thursday, October 15th, 2009 | commentary, predictions, product vision | No Comments
Nokia reported a $1.36 billion loss in the third quarter as the company wrote down the value of its wireless networks venture by $1.35 billion and global sales declined 20 percent.
The company [..] acknowledged that its lead in smartphones, the fastest-growing segment of the market, had fallen to 35 percent from 41 percent, losing ground to Apple’s iPhone and Research in Motion’s BlackBerry devices.
Nokia’s problem is not execution. It knows how to build things and bring them to market: it cranks out new models by the dozen. Its problem is not innovation, at least not at the tactical level: every feature you’ve heard has made it into a shipping Nokia device. Nokia’s problem is in product vision, of being able to imagine a coherent future reality with an ideal smartphone.
You might think that Nokia, with 25 years in the business, wouldn’t have allowed itself to be surpassed so easily. But we should expect it. It’s common pattern among big, old, successful companies. Sony, Dell, GM, Motorola and countless others have fallen into the product vision trap, opening the door to disruptors.
Product vision becomes a bigger factor the more dials there are to turn in product formulation.
Sony traveled a similar arc in consumer electronics. Sony was untouchable when their gadgets did only one or two things. Like Nokia, it could master those core capabilities and move on to providing a variety of product variants for every segment, on marketing and on operations. These were the business drivers as long as there was a steady state in the market.
But as technology enabled new classes of products, those old recipes no longer worked. As the number of dials to turn in product formulation increase, the tried-and-true approach of cranking out incrementally better products breaks down. Leadership gets overwhelmed by the plethora of choice. In lieu of product vision to guide the way, they resort to guesswork, throwing everything against the wall to see what might stick.
Without a clear, coherent image of how things should be, design suffers. Nokia’s products (and Sony’s, and Motorola’s, etc.) became complex, incoherent, and frustrating to use. When products take on more capabilities, keeping things simple gets exponentially harder, because every feature relates to every other feature. The possible associations grows with the square of the number of features. (Even the best-of-class iPhone and Palm Pre are not immune. Both could do their core tasks considerably easier.)
When products get more and more capable, the only way to cut through the jungle of choice, and the only way to keep the user experience coherent is with a clear product vision.
PS: Nokia has the market power but not the product vision. Palm has the vision but not the market power. I’m hungry for my Reese’s Peanut Butter Cup. When will Nokia acquire Palm?
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Philip Haine is principal of Product Vision Associates, a product innovation consultancy that helps product leaders and their teams envision new, breakthrough products and reboot older ones. To follow him on Twitter click here.
Prototyping your store
Monday, October 12th, 2009 | commentary, news | No Comments
Apple and Steve Jobs influence the re-imagining of Disney stores. This tidbit stuck out:
Mr. Jobs [..] insisted that Disney build a prototype store to work out kinks, a costly endeavor that most retailers skip.
Most retailers skip the prototype step for store redesigns? Really? Then how do they know the full rollout, which is much more costly, will work?
What is this, advertising? (ba dum tchhh)
Dell innovates for real
Tuesday, September 29th, 2009 | commentary, news | 2 Comments
Some meaningful innovation coming out of Dell. Its premium Latitude Z has:
- a second on-board OS (Linux) and subsystem for instant-on computing:
“Some users Dell surveyed spent 70 percent of their time working in the instant-on mode. Microsoft is sure to take note of that figure. Windows has turned into a clunky, cup holder.”
(Then again, this sub-system is not integrated with the main system. Different OS, different file system, different apps. It’s like having a cheap netbook hacked into your laptop.
This all points to the still-unmet need of a truly instant-on system. I still await the time when our main laptops achieve the instant-on performance of the 1983’s TRS-80 model 100.)
- a docking without cables, including inductive charging (is that energy efficient?),
- wireless USB (sweet!) and:
- wireless display interface (beat Apple to the punch)
- a super thin enclosure (Zzzz)
- an interesting black cherry finish (ooh aah)
- “the right side of the monitor acts as a sort of touch-wheel, letting you scroll through application icons and start applications just by rubbing your finger along the edge of the laptop.”
It reportedly doesn’t work well in this incarnation, but the idea of having more touchable surfaces has potential. (Wouldn’t it have been more convenient to reach along the edge of the base rather than the edge of the display?)
- a few other minor innovations
Good for Dell. These premium innovations can be perfected, reduced in cost, and trickle down over time to their lower end hardware.
Take this as a sign that the world is finally learning Apple’s lessons. Consumers will be better off. Product companies better be prepared for more intense competition.
My big question: did Dell pull all of this off in-house? Or did they enlist the help and vision of an external innovation agency?
You can’t focus on fog
Monday, September 14th, 2009 | commentary, product vision | 2 Comments
The CEO of a hitherto search engine company reportedly told the troops:
Let’s focus on a great Yahoo! Our average user is just trying to get through the day…looking to find out what’s going on in the big world and their own world. They want their Internet site to be great, and to work. They don’t care about how or about deals. They care that we are a trusted dependable site.
That is our simple mission. Focus on it!!!
Let’s itemize that. Yahoo’s simple mission is to:
- Help users get through the day
- Help users find out what’s going on in the world and their own world
- Make an Internet site that is great, and works
- Have a site that is trusted and dependable
That’s a rather hazy vision to try and focus on. Only #2 provides a modicum of guidance. And even that amounts to, “Let’s do more of what we’ve been doing for the past 10 years.” If that was the right strategy I doubt Yahoo would be where they are now.
Someone could use a little help with their product vision.
Reed Hastings on Culture of Innovation
Tuesday, September 1st, 2009 | commentary | 2 Comments
Reed Hastings, CEO of Netflix, made his first batch of millions building a company that merged with another. Things went downhill for the combined company as bureaucracy set in. He then spent two years thinking about what went wrong.
This remarkable deck on Netflix corporate culture reflects what he figured out in those two years. It’s longish, but worth grabbing a cup of tea, closing your door, and taking time to reflect upon each slide and what it says about your company.
Reed Hastings has been added to my list of heroes.
How to transition newspaper readers to paying customers
Friday, August 28th, 2009 | commentary | No Comments
The jury is still out on whether newspapers will be able to sustain themselves by charging for content.
But if it were to happen it would have to be done right.
Over at my sister blog, StealThisIdea, I describe a strategic approach for newspapers to start charging for content, that borrows heavily from the proven precedents and takes customer psychology into account.
Please check it out: How to transition newspaper readers to paying customers
Driving the new GM into the ground
Wednesday, July 15th, 2009 | commentary | 1 Comment
If the first step to change is admitting you have a problem, we shouldn’t expect much from the new GM.
Earlier I wrote about the need for fundamental cultural transformation at GM. I was cautiously optimistic that bringing in outside leadership might usher in real change.
Well, the “new” GM has brought back some old leadership, Bob Lutz, and here is what he had to say:
The problem we have right now is getting the breadth of the American public [..] to realize the transformation that has taken place in GM’s quality, design, fuel efficiency and so forth, and to expunge some of these hoary old conventional wisdoms that General Motors builds gas guzzlers, General Motors has sloppy interiors, General Motors this, General Motors that, none of which is true anymore. But it tends to get endlessy repeated in the popular press.
Incredibly, this is the same story that GM has been telling itself for years.
Dear Bob, it cannot possibly be true that GM is transformed. You just emerged from bankruptcy. You are still necessarily selling the cars built by the old GM.
Those “hoary old conventional wisdoms” you deride? They are true. Anyone who rents a GM vehicle can reconfirm this for you in a minute.
Your biggest job right now is not to “get the American public to realize the transformation that has taken place.” That’s the old PR-driven culture rising from the ashes of the old GM.
Your biggest job is to actually to create better products for customers. Drive success by driving better products that customers will, um, want to drive.
The Enlightened Stupid Marketer
Tuesday, June 23rd, 2009 | Uncategorized, commentary | No Comments
Brilliant…
h/t The Cranky PM
GM: Epic failure of vision? Or culture?
Wednesday, June 10th, 2009 | commentary, product vision | 3 Comments
Through the lens of product vision, I’ve been watching the devolution of GM for years. So when it declared bankruptcy last week I was ready to commemorate the occasion by pronouncing it an epic failure of product vision.
After all, they permitted the competition to consistently be superior in quality, not for a few quarters or years, but for a few decades. Their best efforts at innovation were directed not towards better cars, but the problem of preserving the status quo. And they willfully ignored the writing on the wall with respect to future oil crises and the latent demand for efficiency.
Did you know that, as a result of progressive legislation, GM had an early lead not just in electrical vehicles like the EV1, but in hybrids as well? As soon as lobbyists managed to squelch California’s strict emissions standards (with the aid of the White House at the time) GM yanked the plug on electrics.
The incredible postscript to this story is that it was America’s call-to-arms for efficient vehicles that panicked Honda and Toyota into action. The Japanese manufacturers invested heavily in hybrids, leading to Toyota’s years-long lead in hybrid vehicles and the birth of the Prius. While the American auto execs congratulated themselves for persuading government not to force it to invest in the inevitable future, Toyota went ahead and invented it. Hybrids “make no economic sense,” said GM vice-chairman Bob Lutz. Oops.
And so an epic failure of product vision it certainly was. But that is not the heart of the story, or its root cause. The root cause is a cancerous corporate culture.
It’s a corporate culture where dissenting opinion is marginalized and only the yes-men survive. (For a taste of this, check out the sycophantic employee comments at GM’s own blog.)
It’s a corporate culture that’s driven by PR rather than product. It’s a culture with a cynical view of customers that says that you don’t have to actually deliver the best products to them. You only have to convince customers that they are the best products. You don’t have to actually be a green company. Job #1 is to convince everybody that you’re green. The first act of a supposedly chastened GM? Yet another PR campaign stating (yet again) how it’s turned the corner. At GM, image follows product.
This culture neglects the fact that between what you say and the money you want to make, you actually have to provide significant value to customers. Making a lot of money in a sustainable fashion requires consistently satisfying important unmet customer needs.
GM’s is a corporate culture that resolves the cognitive dissonance between the claimed and actual quality by truly believing that they are delivering quality. A company that believes its own BS sets sail from the reality-based community. If it cannot be honest with itself, so loses its ability to self-correct and goes increasingly off-course.
GM’s is a corporate culture that is in denial about its own and failures and limitations, where everyone else is the scapegoat. No failure is admitted, except perhaps the failure to get their message across to the public.
“G.M., for all these decades, has been a ‘know-it-all’ company that had all the answers [..] I think it’s been proven that they really didn’t know it all.” – David Lewis
GM’s culture is a systemic cancer that is not easily cured.
That’s why I was not very hopeful that a new GM, radically cut back, would be much different than the old, bloated GM. The only hope of turning around a corporate culture around like this is by decapitation. The old leadership is simply too vested in their past decisions, too stewed in ancient assumptions and attitudes. For fundamental change, the company’s values, reward system and world view must be turned upside down. That is only possible with strong new leadership.
And that’s why it’s encouraging news that the shareholders of GM — i.e. us, the American public, as represented by our government — are replacing its leadership. Not just the CEO, but the entire board of directors, which somehow — someone please tell me how — tolerated the destruction of billions of dollars of value before their eyes over decades.
It won’t be easy to turn GM’s culture around. Old habits die hard, and remember, it’s the yes-men who survived at GM, not the innovative rebels. But at least now, with new leadership, it stands chance.
For the rest of us, GM’s insidious corporate culture is worth pondering and comparing against the institutions over which we have influence.
Update 6/10/09 nytimes has more on the challenges of reinventing GM’s culture.
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Philip Haine is principal of Product Vision Associates, a product innovation consultancy that helps product leaders and their teams envision new, breakthrough products and reboot older ones. To follow him on Twitter click here.
Reverse income statement
Wednesday, May 13th, 2009 | commentary | No Comments
Here’s an interesting idea for doing a reality check on the business plan component of a product vision. It’s called a reverse income statement.
Typically, what happens when somebody designs a conventional plan is they start off with the revenues they hope to get. They estimate what the costs are. They subtract the costs from the revenues and that tells them what the profits are going to be. A reverse income statement starts with the profits I must earn to make it worthwhile. I can then calculate what the maximum cost can be in order for me to make those profits, and then what the revenue should be in order for me to make the profits.
So, you start with the income statement at the bottom and you work up instead of starting at the top and working down. That’s what we mean by the reverse financials. Very rapidly, you may find that in order for you to be able to make the numbers that you plan to make in terms of profits, all you need is 5000% market share — at which stage you say, “Oops, let’s go and do something else.” You really don’t know, but it gives you a sense of what the scope is.
[By Rita Gunther McGrath, courtesy knowledge@wharton]
Paleofuturism
Monday, May 4th, 2009 | commentary | 1 Comment
It’s interesting to look back at old visions for the future and compare them against how things really turned out.
Like these 1993 “You Will” commercials from AT&T that includes a glance at something resembling an EO.
I was at GO Corp at the time and it was exciting to see something like what we were doing be exposed to the mainstream.
The field is called w PS: They were wrong in their prognostication about me sending a fax from the beach.
Wikipedia calls it retro-futurism. Matt Novak has a whole blog devoted to the cause he calls Paleo-Future. This site is a great resource for those of us interested in the nature of envisioning future products. What did our predecessors get right and wrong? What are the patterns of failure that we can apply to our predictions today?
PS: AT&T was wrong in their prognostication about me sending a fax from the beach.
Apple bans keyboards from iPhones
Friday, April 24th, 2009 | commentary, news | No Comments
Apple has a long standing button-phobia. But their recent declarations that iPhone are a no-keyboard zone are disheartening:
Apple said “emphatically” that it did not believe in fixed keypads for phones, since the touch screen provided more flexibility for alternative keypads and for various App Store offerings, and that it is portable across geographies and languages, providing significant scale economics.
There is something Apple is not getting, which is that having a physical keyboard is not just another design choice like making a bezel brushed or polished aluminum. Barring the thumb keyboard from iPhones cuts out whole usage scenarios from the iPhone product vision.
The evidence is in plain sight. Today, heavy texters think twice about going with the iPhone. Those with stubby fingers are annoyed at having to type on-screen. Blackberry crack addicts give up on the iPhone and return to Blackberries.
You can prove to yourself using the hallway usability test I conducted with a friend. On your mark, get set, transcribe two sentences from a newspaper simultaneously, one of you with a Blackberry and the other with an iPhone. Even experienced iPhone typers must double-check the work, override the iPhone’s auto-correct feature as necessary, and make corrections. Experienced thumb typists on the Blackberry never have to look back beyond the last letter or two. For an on-screen keyboard, the iPhone’s is excellent, but it’s significantly worse than a real-life, tactile keyboard. No onscreen keyboard has yet to outperform the best thumb keyboard.
Most existing iPhone users won’t consciously miss the on-screen keyboard. They just won’t be typing as much as they would were the device to do it well. (Here, as fan boi of both Apple and the iPhone, I speak from personal experience.)
An Apple ban on thumb keyboards matters because it confers a massive strategic freebie to Apple’s competitors. The others, like the Palm Pre can trumpet their legitimate superiority at sending texts, emails and blog posts. (It was sad to see Blackberry buy into the Reality Distortion Field and stumble with its keyboard-less Storm. A Blackberry without a keyboard is like a lollipop without a stick. The thumb keyboard and it was an advantage, not a liability.)
There is a chance Apple has something up their sleeve. Part of Apple’s design modus operandi is to try and think beyond the current generation of a technology, and implement that. They could, for example, conclude that the thumb keyboard is inelegant and below them and been done, and that the underlying need — for efficient text entry — could be served better (and with more patented Apple PR pizzazz) by, say, voice-to-text. Instead of texting your message, just dictate it and send it.
This is not unheard of: there exist today of human-assisted services for phones that will transcribe your utterances to text quickly and pretty accurately. The voice-recognition approach has great promise for some scenarios, but is not without the usual downsides of voice recognition. Responsiveness and immediacy suffer. Dictated text demands proof-reading for accuracy and correction when there are errors. And whereas texting your message is discreet, speaking it out loud is as conspicuous.
Another “out” for Apple is to make a great physical keyboard as a separate object that snaps onto the iPhone. ”Haha, see? We didn’t desecrate our beautiful device with a ‘fixed keyboard’. It’s removable!” (This do-it-without-doing-it solution would be analogous to Apple finally providing the highly demanded left-mouse button on the mighty mouse by not providing it: instead of a second button, it’s a separate touch-sensitive zone.)
Apple could, of course, be lying about banning the keyboard. They have been known to misdirect in the past. Let’s hope so. As the Palm Pre demonstrates, a slide-out keyboard and a touch UI can coexist beautifully.
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Philip Haine is principal of Product Vision Associates, a product innovation consultancy that helps product leaders and their teams envision new, breakthrough products and reboot older ones. To follow him on Twitter click here.
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