bethtemple4u llc
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the new product economy
why the practice of building new products
is critical to yo...
2
It is commonly estimated that between
33-95% of new products fail.
bethtemple4u llc
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Sources: 1) http...
3
Which is a frightening statistic because
new products are continually in demand.
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4
Evidenced by the fact that
product lifecycles are shortening.
bethtemple4u llc
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5
Why product lifecycles are shortening
bethtemple4u llc
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rapid
advancement of
technology
an
overabunda...
6
The short life of the netbook
bethtemple4u llc
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1977 2001 2007
5 years
iPod/
iTunes
PC
desktop
iPhone...
7
A company can’t rely on
outside forecasts – change is
occurring too rapidly and it is directly
affecting product viabilit...
8
Change happens within industries when
new products with
new business models enter the market.
bethtemple4u llc
ALL RIGHT...
9
bethtemple4u llc
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Industry leader New industry entrant
1985: first Blockbuster store opens
1986: goes ...
10
bethtemple4u llc
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Industry leader New industry entrant
1971: opens first store
1995: goes public
2011...
11
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Industry leader New industry entrant
?
12
Even more concerning is competition
comes from non-peer companies
building new products that aren’t
obviously competiti...
13
bethtemple4u llc
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Industry leader Non-industry entrant
1889: founded by George Eastman
1976: 90% mar...
14
bethtemple4u llc
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Industry leader Non-industry entrant
2007: first Flip Ultra
2009: acquired by Cisco...
15
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Industry leader Non-industry entrant
?
16
And it’s not only traditional companies
that are at risk from
new products entering the market.
bethtemple4u llc
ALL RI...
17
“(Steve) Blank believes that the leading
tech companies are in a particularly
vulnerable spot. Tech behemoths —
Oracle,...
18
How many businesses will be
at risk with the adoption of this
new product?
bethtemple4u llc
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19
bethtemple4u llc
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3D printing: The Printrbot Jr. in the process of making a 3-D model.
20
So how can a company survive in this
new product economy?
bethtemple4u llc
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21
ü  Be paranoid – expect constant change
ü  Have a vision – allow for wiggle room
ü  Establish a distinct value propo...
22
Be paranoid - expect constant change
n  Specifically, don’t assume long-term dominance or marketshare.
n  Intel's Andy...
23
Case study: Facebook
n  Facebook was built on the web (founded in 2004).
n  With a clear dominance on the web, the co...
24
Have a vision – allow for wiggle room
n  Establish a broad mission for the company but don't box the
business in.
n  ...
25
Case study: IBM
n  IBM has been brilliant at being agile with their vision.
n  From the beginning their vision was to...
26
Packaging technology for businesses
bethtemple4u llc
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1911
1992 2002
ThinkPad
laptop
Punch-
card
tab...
27
Establish a distinct value proposition – don’t veer
from it
n  Once you have a clear (and flexible) vision, let the wor...
28
Case study: Apple
n  Apple has always had a distinct value proposition based on high
design.
–  All decisions are base...
29
Create an amazing experience – constantly make
it better
n  The value proposition should come shining through in the
e...
30
Case study: Netflix
n  Netflix introduced itself by delivering a better rental experience.
n  Not only did we not have ...
31
Make size an advantage
n  We often hear that bigger companies can’t move fast enough to
counter smaller insurgents, an...
32
“One of my fears is being this big, slow,
constipated, bureaucratic company that’s
happy with its success … Companies f...
33
Case study: Nike
n  Nike became famous for its shoes and then its apparel.
n  In 2012 they added the FuelBand bracele...
34
Hire Swiss Army knives
n  A flexible company needs an adaptable, curious, and self-
directed workforce.
n  Along with ...
35
Case study: W. L. Gore
n  While not exactly employing ‘Swiss Army knives’ (employees
have specialities), W.L. Gore (a ...
36
In the new product economy,
its not good enough to survive –
you have to thrive!
bethtemple4u llc
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37
bethtemple4u llc
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Beth Temple
bethtemple4u llc
http://bethtemple4u.com
Let’s build your next
new pro...
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The New Product Economy _bethtemple4u

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More than ever before new products, especially digital-enabled ones, are critical to a company’s success. This deck outlines why product cycles are shortening, how the trend has already affected major companies, and provides a strategy of how to get ahead in the New Product Economy.

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The New Product Economy _bethtemple4u

  1. bethtemple4u llc ALL RIGHTS RESERVED 1 the new product economy why the practice of building new products is critical to your business 2013 SlideShare! FEATURED!
  2. 2 It is commonly estimated that between 33-95% of new products fail. bethtemple4u llc ALL RIGHTS RESERVED Sources: 1) http://faculty.msb.edu/homak/HomaHelpSite/WebHelp/New_Product_Failure_Rates.htm 2) Clay Christensen's Milkshake Marketing, Harvard Business School, Working Knowledge, 2/14/2011
  3. 3 Which is a frightening statistic because new products are continually in demand. bethtemple4u llc ALL RIGHTS RESERVED
  4. 4 Evidenced by the fact that product lifecycles are shortening. bethtemple4u llc ALL RIGHTS RESERVED
  5. 5 Why product lifecycles are shortening bethtemple4u llc ALL RIGHTS RESERVED rapid advancement of technology an overabundance of products creates consumer attention spans shortening requiring
  6. 6 The short life of the netbook bethtemple4u llc ALL RIGHTS RESERVED 1977 2001 2007 5 years iPod/ iTunes PC desktop iPhone 2010 iPad 1985 Laptop 2012: end of Netbook2 2013 Surface Pro Sources: 1, eWeek, July 2010; 2, The Guardian, Dec 2012 “Netbook sales are showing no signs of waning, ABI Research announced July 22 [2010] … Nearly 60 million netbooks are expected to ship worldwide by the end of 2010, and that figure is likely to double by 2013.”1 2007: Netbook introduced2
  7. 7 A company can’t rely on outside forecasts – change is occurring too rapidly and it is directly affecting product viability. bethtemple4u llc ALL RIGHTS RESERVED
  8. 8 Change happens within industries when new products with new business models enter the market. bethtemple4u llc ALL RIGHTS RESERVED
  9. 9 bethtemple4u llc ALL RIGHTS RESERVED Industry leader New industry entrant 1985: first Blockbuster store opens 1986: goes public 2010: filed for bankruptcy Out of business in 25 years Blockbuster photo credit: Los Angeles Times, latimes.com
  10. 10 bethtemple4u llc ALL RIGHTS RESERVED Industry leader New industry entrant 1971: opens first store 1995: goes public 2011: filed for bankruptcy Out of business in 40 years
  11. 11 bethtemple4u llc ALL RIGHTS RESERVED Industry leader New industry entrant ?
  12. 12 Even more concerning is competition comes from non-peer companies building new products that aren’t obviously competitive. bethtemple4u llc ALL RIGHTS RESERVED
  13. 13 bethtemple4u llc ALL RIGHTS RESERVED Industry leader Non-industry entrant 1889: founded by George Eastman 1976: 90% marketshare 2012: filed for bankruptcy From market leader to bankruptcy in 36 years
  14. 14 bethtemple4u llc ALL RIGHTS RESERVED Industry leader Non-industry entrant 2007: first Flip Ultra 2009: acquired by Cisco 2011: division shut down Out of business in 4 years
  15. 15 bethtemple4u llc ALL RIGHTS RESERVED Industry leader Non-industry entrant ?
  16. 16 And it’s not only traditional companies that are at risk from new products entering the market. bethtemple4u llc ALL RIGHTS RESERVED
  17. 17 “(Steve) Blank believes that the leading tech companies are in a particularly vulnerable spot. Tech behemoths — Oracle, SAP, Cisco, even Google — are facing serious threats from smaller players, who can push new products into the market at a faster rate.” bethtemple4u llc ALL RIGHTS RESERVED Steve Blank on ‘continuous innovation’ February 16, 2013
  18. 18 How many businesses will be at risk with the adoption of this new product? bethtemple4u llc ALL RIGHTS RESERVED
  19. 19 bethtemple4u llc ALL RIGHTS RESERVED 3D printing: The Printrbot Jr. in the process of making a 3-D model.
  20. 20 So how can a company survive in this new product economy? bethtemple4u llc ALL RIGHTS RESERVED
  21. 21 ü  Be paranoid – expect constant change ü  Have a vision – allow for wiggle room ü  Establish a distinct value proposition – don’t veer from it ü  Create an amazing experience – constantly make it better ü  Make size an advantage ü  Hire Swiss Army knives new product economy bethtemple4u llc ALL RIGHTS RESERVED
  22. 22 Be paranoid - expect constant change n  Specifically, don’t assume long-term dominance or marketshare. n  Intel's Andy Grove had it right: “only the paranoid survive”. This has to be top-down paranoia that requires constant evaluation of customer needs, market opportunities, and emerging trends. –  Make your Chief Strategic Officer is a Chief Paranoid Officer (seriously!) n  Foster open communication and on-going ideation. –  Take in data from all levels, create a system to share the findings. n  Don’t assume your competition is in your category or industry. bethtemple4u llc ALL RIGHTS RESERVED
  23. 23 Case study: Facebook n  Facebook was built on the web (founded in 2004). n  With a clear dominance on the web, the company continued to grow the web platform. n  However, by early 2012, as it prepared for an IPO, there was glaring evidence that Facebook was critically behind in mobile (despite the fact that the founder was using a smartphone). n  Facebook had to ramp up fast and just prior to the IPO made a $1 billion acquisition of the mobile app Instagram to prove its mobile intentions. bethtemple4u llc ALL RIGHTS RESERVED
  24. 24 Have a vision – allow for wiggle room n  Establish a broad mission for the company but don't box the business in. n  Constantly reexamine your overall vision in the context of the wider market and make strategic adjustments as necessary. –  Do this, at least, annually – quarterly would be better. n  Think: flexibility and agility. bethtemple4u llc ALL RIGHTS RESERVED
  25. 25 Case study: IBM n  IBM has been brilliant at being agile with their vision. n  From the beginning their vision was to package technology for use by businesses. n  They started out making and selling punch-card tabulators and ended up as technology consultants. –  In between they brought to market some of the most well-known business technologies: the mainframe, the PC, the ThinkPad, to name a few. n  As business needs changed over the past 100 years, so did IBM. bethtemple4u llc ALL RIGHTS RESERVED
  26. 26 Packaging technology for businesses bethtemple4u llc ALL RIGHTS RESERVED 1911 1992 2002 ThinkPad laptop Punch- card tabulators Acquired PwC consulting 1957 Electronic data processing machine/ FORTRAN This is only a partial list of the many transitions and products (including patents) developed by IBM. 1961 Selectric typewriter 1964 IBM System/360 computer 1974 UPC and scanner 1981 IBM PC 1997 Coins the term “e-business” 2005 Sells PC business to Lenovo 1952 Mainframe
  27. 27 Establish a distinct value proposition – don’t veer from it n  Once you have a clear (and flexible) vision, let the world know why you exist and are different than all the other alternatives. n  A value proposition equates a company’s core offering to audience needs. n  It is the standard by which all decisions must be made. n  Too often companies try to duplicate the efforts of the market leader – these companies can end up late to the market and first to exit, decreasing overall value. –  Example: HP’s TouchPad was on the market for a total of 48 days. bethtemple4u llc ALL RIGHTS RESERVED
  28. 28 Case study: Apple n  Apple has always had a distinct value proposition based on high design. –  All decisions are based on creating a well-designed product. n  From the early Mac through to the iPad, they’ve designed great- looking products, both hardware and software, that work well together. –  More recently that design has included the commerce-based ecosystem based on the centralized iTunes. n  In the beginning design was seen as a benefit to only a small percentage of the market – but this market grew, exponentially. bethtemple4u llc ALL RIGHTS RESERVED
  29. 29 Create an amazing experience – constantly make it better n  The value proposition should come shining through in the experience your customers have with your products and your company. n  Every touch point should reinforce both your vision and your promise. n  When adding to an established experience, any incremental decisions must result in a much better experience. n  To ensure this, comparison test the present experience against any possible changes with customers before going to market. bethtemple4u llc ALL RIGHTS RESERVED
  30. 30 Case study: Netflix n  Netflix introduced itself by delivering a better rental experience. n  Not only did we not have to drive someplace to pick one up, there were no late fees and we could manage our own video list. n  Unfortunately they made a major decision (splitting streaming from DVD and making a significant price change) without considering the impact on the existing experience. –  It’s unlikely they tested the change with customers. n  Customers noticed a dilution in the experience and left in droves (yes, pricing is part of the experience). bethtemple4u llc ALL RIGHTS RESERVED
  31. 31 Make size an advantage n  We often hear that bigger companies can’t move fast enough to counter smaller insurgents, and there is some truth in it. n  But size has its advantages: established distribution channels, financial resources, brand recognition … customers! n  Assuming you are being paranoid and you are looking across industries, you should be identifying possible disrupters earlier giving you an earlier head start. n  Use some of the human and financial resources to test new products throughout the year – be proactive. bethtemple4u llc ALL RIGHTS RESERVED
  32. 32 “One of my fears is being this big, slow, constipated, bureaucratic company that’s happy with its success … Companies fall apart when their model is so successful that it stifles thinking that challenges it.” - Nike CEO Mark Parker bethtemple4u llc ALL RIGHTS RESERVED Source: Fast Company, March 2013
  33. 33 Case study: Nike n  Nike became famous for its shoes and then its apparel. n  In 2012 they added the FuelBand bracelet because their customers were going digital. –  Could have easily lost their large audience to competitors Jawbone & FitBit. n  They also disrupted their own main product – shoes! –  Their FlyKnit material changes the shoes and how they are manufactured. n  Nike proactively tests new products in multiple ‘innovation’ labs. n  All of these evolutions and still true to its performance brand. bethtemple4u llc ALL RIGHTS RESERVED
  34. 34 Hire Swiss Army knives n  A flexible company needs an adaptable, curious, and self- directed workforce. n  Along with the specialists, hire generalists who can interpret what is going on from multiple perspectives. n  Reconstruct yearly reviews to focus on what employees are seeing in their jobs and in the marketplace; talk to them about the products they use. –  Make these reviews quarterly. –  Couple this with the reviews of market needs and emerging trends that are hallmarks of a company that is aware that change is constant. –  Eliminate: “This is the way we’ve always done it.” bethtemple4u llc ALL RIGHTS RESERVED R
  35. 35 Case study: W. L. Gore n  While not exactly employing ‘Swiss Army knives’ (employees have specialities), W.L. Gore (a product development company) has one of the most innovative organizational (non)structures to foster creativity and teamwork. –  There are no bosses – instead associates and sponsors. –  Teams organize around opportunities and leaders emerge; this is dynamic and not structurally permanent. –  Associates have freedom to commit to projects that match their skills. –  No pre-determined chains of command or channels of communication. n  W. L. Gore has both consistently churned out innovative products and received honors for being one of Fortune’s “Best Companies to Work For.” bethtemple4u llc ALL RIGHTS RESERVED
  36. 36 In the new product economy, its not good enough to survive – you have to thrive! bethtemple4u llc ALL RIGHTS RESERVED
  37. 37 bethtemple4u llc ALL RIGHTS RESERVED Beth Temple bethtemple4u llc http://bethtemple4u.com Let’s build your next new product together! beth[at]bethtemple4u.com

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