Failing Innovation

Avoiding bad markets is half the battle.

Annually I see multiple software vendors pitching products designed to improve the performance of computers, databases or networks. With few exceptions, these tools disappear within two years because the underlying commodity (computer server, network connection or DBMS) becomes faster and cheaper. One of the most common technology and marketing mistakes is to create a product for an industry that will inevitably correct the problem.

innovating-the-futureTake home Internet connections (please, take mine and bring me FttP). Long, long ago — about 20 years back — having a 4,800 baud modem for connecting to the Internet was considered state of the art and painfully slow (recent college CS graduates may have to look-up archaic words like ‘baud’ and ‘modem’). Without fail, once every quarter, someone pitched a software solution for raising the data transfer rate across antiquated telephone technologies. The following quarter a faster modem would become the new standard and obviate the software solution. Modems were eventually replaced with cable, then by 3G wireless, then fiber to the premises, then 4G wireless … well, you get the picture. The providers of personal network connections knew what people disliked most about their service (namely having to wait for anything) and kept advancing the product while simultaneously eliminating software speed-ups.

Hence, the classic marketing mistake is to create a product destined for rapid obsolescence. Riding a commodity wave is a fine way to make money, but trying to sell patches to limitations of a commodity that can be fixed by the providers is fast fiscal suicide.

Understanding this method of mistake leads to understanding innovation and value, which brings us around nicely to marketing and where it fits into the process. “Innovation” is, by etymology, something new (from Latin innovatus, from in- “into” + novus “new.”). Software accelerators and their crippled cousins are by definition something old. To be new requires being something unanticipated by the market. This still is a rather broad notion. Early iPods were not new given that MP3 players had been around for quite some time, and the notion of portable music had existed since transistor radios. But Apple marketed iPods as fonts of spiritual liberation, and that was new (along with white ear bugs, slicker case design, etc). Marketing cannot by itself innovate, since innovations requires the unique human insight that aggregates what is possible (engineering) with what people want to achieve. Marketing contributes by assessing what people want to achieve, and then validating product concepts before build commitments are made.

No amount of survey triangulation will create inspiration.

Inbound marketing adds to the base of knowledge that feeds inspiration and innovation. Though Steve Jobs was not a fan of focus groups during product development, they remain great vehicles for discovering what people are frustrated about or wish to achieve, which can lead to innovation moments. More directly, market research can unmask gaps between competitor offerings and the expected outcomes of buyers. Such investigations lead to +1 value points that decide what company dominates their segment or market.

Most important though is knowing where not to go. Since the probability of success equals one minus the probability of failure [ P(s) = 1 – P(f) ] not failing is always your first mission and not entering doomed markets eliminates a lot of potential failure.


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