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July 24 - July 24, 2022
we can safely predict that the basis of product competition and customer choice will shift away from these measures of functionality toward other attributes,
such as reliability and convenience.
Each of the disruptive technologies studied in this book has been smaller, simpler, and more convenient than preceding products. Each was initially used in a new value network in which simplicity and convenience were valued.
Using these qualities as my guiding principles, I would instruct my design engineers to proceed according to the following three criteria.
First, this vehicle must be simple, reliable, and convenient.
Elements of Richard koch's price simplifying strategy
Second, because no one knows the ultimate market for the product or how it will ultimately be used, we must design a product platform in which feature, function, and styling changes can be made quickly and at low cost.
More elements, adding functionality/benefits to a minimum utility model set no extra cost to increase market adoption and potential
Third, we must hit a low price point.
Disruptive technologies typically have a lower sticker price per unit than products that are used in the mainstream, even though their cost in use is often higher.
Lower price to adopt, but requires customers to take on the additional operating costs over time
Accordingly, our electric vehicle must have a lower sticker price than the prevailing price for gasoline-powered cars, even if the operating cost per mile driven is higher. Customers have a long track record of paying price premiums for convenience.
Sounds like cost / unit of operation is typically higher for disruptive technologies in early market segments. What would be the equivalent for qdir? Lower cost per unit but...
Our technology plan cannot call for any technological breakthroughs on the path critical for the project’s success.
No development, only marketing and distribution
The reason these companies view a breakthrough in battery technology as the critical bottleneck to the commercial success of electric vehicles, of course, is that their executives have positioned their minds and their products in the mainstream market.
They need a breakthrough in battery technology because they made the choice to somehow position electric vehicles as a sustaining technology.
choose to harness or account for the basic laws of disruptive technology by creating a market in which the weaknesses of the electric vehicle become its strengths.
The companies that ultimately achieve the advances in battery technology required to power cars for 150-mile cruises (if they are ever developed) will be those that pioneer the creation of a new value network using proven technology and then develop the sustaining technologies needed to carry them upward into more attractive markets.
Disruptive companies commercialize disruptive technologies then lead sustaining innovations of this technology into mainstream markets
It has almost always been the case that disruptive products redefine the dominant distribution channels,
Can't go through mainstream distribution channels, no leverage ...yet
The reason disruptive technologies and new distribution channels frequently go hand-in-hand is, in
fact, an economic one. Retailers and distributors tend to have very clear formulas for making money,
Just as disruptive technologies don’t fit the models of established firms for improving profits, they often don’t fit the models of their distributors, either.
What is the current model for infrared detector distribution? Value added resellers. Direct sales.
have as a basic strategic premise the need to find or create new distribution channels for electric vehicles.
succeeded because they created organizations whose survival was predicated upon successful commercialization of the disruptive technology:
These firms embedded a dedicated organization squarely within the emerging value network.
I would strongly urge corporate management to create an independent organization to commercialize electric vehicle technology, either an autonomous business unit, such as GM’s Saturn Division or the IBM PC Division, or an indepen...
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In a small, independent organization, these small wins will generate energy and enthusiasm.
business. I want my organization’s customers to answer the question of whether we should be in the business.
I could create an organization that is small enough, with an appropriate cost structure, that my program can be viewed as being on its critical path to success.
In a small, independent organization I will more likely be able to create an appropriate attitude toward failure.
I don’t want my organization to have pockets that are too deep.
I want them to feel constant pressure to find some way—some set of customers somewhere—to make our small organization cash-positive as fast as possible.
spinning out is an appropriate step only when confronting disruptive innovation.
products that do not appear to be useful to our customers today (that is, disruptive technologies) may squarely address their needs tomorrow.
Requires a rich understanding from customers of their needs, what and why (think faster horse = faster transportation, to get to places farther and faster)
managing innovation mirrors the resource allocation process: Innovation proposals that get the funding and manpower they require may succeed;
just as there is a resource allocation side to every innovation problem, matching the market to the technology is another.
If, as most successful companies try to do, a company stretches or forces a disruptive technology to fit the needs of current, mainstream customers—as
it is almost sure to fail.
Historically, the more successful approach has been to find a new market that values the current characteristics of the disruptive technology.
Look for product market fit with simplest value proposition deliverable today!
Disruptive technology should be framed as a marketing challenge, not a technological one.
organizations have capabilities to take certain new technologies into certain markets. They have disabilities in taking technology to market in other ways.
enabled by disruptive technologies require very different capabilities along each of these dimensions.
Makes it very difficult for incumbent to reorganize its business structure to compete in the new market for disruptive technology
Failure and interactive learning are, therefore, intrinsic to the search for success with a disruptive technology.
Lean startup method is essential practice for disruptive technologies
Although the mortality rate for ideas about disruptive technologies is high, the overall business of creating new markets for disruptive technologies need not be inordinately risky.
leave room to try, fail, learn quickly, and try again, can succeed at developing the understanding of customers, markets, and technology needed to commercialize disruptive innovations.
Again, overlap of customer discovery, lean startup, agile development strategy
Companies need to take distinctly different postures depending on whether they are addressing a disruptive or a sustaining technology.
Know which one you are
Perhaps the most powerful protection that small entrant firms enjoy as they build the emerging markets for disruptive technologies is that they are doing something that it simply does not make sense
for the established leaders to do.
successful companies populated by good managers have a genuinely hard time doing what does not fit their model for how to make money.
conventional managerial wisdom at established firms constitutes an entry and mobility barrier that entrepreneurs and investors can bank on.
