The New Product Economy _bethtemple4u
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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 ...

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 The New Product Economy _bethtemple4u Presentation Transcript

  • 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 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 Which is a frightening statistic because new products are continually in demand. bethtemple4u llc ALL RIGHTS RESERVED
  • 4 Evidenced by the fact that product lifecycles are shortening. bethtemple4u llc ALL RIGHTS RESERVED
  • 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 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 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 Change happens within industries when new products with new business models enter the market. bethtemple4u llc ALL RIGHTS RESERVED
  • 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 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 bethtemple4u llc ALL RIGHTS RESERVED Industry leader New industry entrant ?
  • 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 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 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 bethtemple4u llc ALL RIGHTS RESERVED 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 RIGHTS RESERVED
  • 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 How many businesses will be at risk with the adoption of this new product? bethtemple4u llc ALL RIGHTS RESERVED
  • 19 bethtemple4u llc ALL RIGHTS RESERVED 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 ALL RIGHTS RESERVED
  • 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 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 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 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 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 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 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 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 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 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 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 “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 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 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 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 In the new product economy, its not good enough to survive – you have to thrive! bethtemple4u llc ALL RIGHTS RESERVED
  • 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