Rev Mentor

It has revolutionised one industry after another. Now Apple hopes to transform three at once

Illustration by Jon Berkeley

APPLE is regularly voted the most innovative company in the world, but its inventiveness takes a particular form. Rather than developing entirely new product categories, it excels at taking existing, half-baked ideas and showing the rest of the world how to do them properly. Under its mercurial and visionary boss, Steve Jobs, it has already done this three times. In 1984 Apple launched the Macintosh. It was not the first graphical, mouse-driven computer, but it employed these concepts in a useful product. Then, in 2001, came the iPod. It was not the first digital-music player, but it was simple and elegant, and carried digital music into the mainstream. In 2007 Apple went on to launch the iPhone. It was not the first smart-phone, but Apple succeeded where other handset-makers had failed, making mobile internet access and software downloads a mass-market phenomenon.

As rivals rushed to copy Apple’s approach, the computer, music and telecoms industries were transformed. Now Mr Jobs hopes to pull off the same trick for a fourth time. On January 27th he unveiled his company’s latest product, the iPad—a thin, tablet-shaped device with a ten-inch touch-screen which will go on sale in late March for $499-829 (see article). Years in the making, it has been the subject of hysterical online speculation in recent months, verging at times on religious hysteria: sceptics in the blogosphere jokingly call it the Jesus Tablet.

The enthusiasm of the Apple faithful may be overdone, but Mr Jobs’s record suggests that when he blesses a market, it takes off. And tablet computing promises to transform not just one industry, but three—computing, telecoms and media.

Companies in the first two businesses view the iPad’s arrival with trepidation, for Apple’s history makes it a fearsome competitor. The media industry, by contrast, welcomes it wholeheartedly. Piracy, free content and the dispersal of advertising around the web have made the internet a difficult environment for media companies. They are not much keener on the Kindle, an e-reader made by Amazon, which has driven down book prices and cannot carry advertising. They hope this new device will give them a new lease of life, by encouraging people to read digital versions of books, newspapers and magazines while on the move. True, there are worries that Apple could end up wielding a lot of power in these new markets, as it already does in digital music. But a new market opened up and dominated by Apple is better than a shrinking market, or no market at all.

Keep taking the tablets

Tablet computers aimed at business people have not worked. Microsoft has been pushing them for years, with little success. Apple itself launched a pen-based tablet computer, the Newton, in 1993, but it was a flop. The Kindle has done reasonably well, and has spawned a host of similar devices with equally silly names, including the Nook, the Skiff and the Que. Meanwhile, Apple’s pocket-sized touch-screen devices, the iPhone and iPod Touch, have taken off as music and video players and hand-held games consoles.

The iPad is, in essence, a giant iPhone on steroids. Its large screen will make it an attractive e-reader and video player, but it will also inherit a vast array of games and other software from the iPhone. Apple hopes that many people will also use it instead of a laptop. If the company is right, it could open up a new market for devices that are larger than phones, smaller than laptops, and also double as e-readers, music and video players and games consoles. Different industries are already converging on this market: mobile-phone makers are launching small laptops, known as netbooks, and computer-makers are moving into smart-phones. Newcomers such as Google, which is moving into mobile phones and laptops, and Amazon, with the Kindle, are also entering the fray: Amazon has just announced plans for an iPhone-style “app store” for the Kindle, which will enable it to be more than just an e-reader.

If the past is any guide, Apple’s entry into the field will not just unleash fierce competition among device-makers, but also prompt consumers and publishers who had previously been wary of e-books to take the plunge, accelerating the adoption of this nascent technology. Sales of e-readers are expected to reach 12m this year, up from 5m in 2009 and 1m in 2008, according to iSuppli, a market-research firm.

Hold the front pixels

Will the spread of tablets save struggling media companies? Sadly not. Some outfits—metropolitan newspapers, for instance—are probably doomed by their reliance on classified advertising, which is migrating to dedicated websites. Others are too far gone already. Tablets are expensive, and it will be some years before they are widespread enough to fulfil their promise. In theory a newspaper could ask its readers to sign up for a two-year electronic subscription, say, and subsidise the cost of a tablet. But such a subsidy would be hugely pricey, and expensive printing presses will have to be kept running for readers who want to stick with paper.

Still, even though tablets will not save weak media companies, they are likely to give strong ones a boost. Charging for content, which has proved difficult on the web, may get easier. Already, people are prepared to pay to receive newspapers and magazines (including The Economist) on the Kindle. The iPad, with its colour screen and integration with Apple’s online stores, could make downloading books, newspapers and magazines as easy and popular as downloading music. Most important, it will allow for advertising, on which American magazines, in particular, depend. Tablets could eventually lead to a wholesale switch to digital delivery, which would allow newspapers and book publishers to cut costs by closing down printing presses.

If Mr Jobs manages to pull off another amazing trick with another brilliant device, then the benefits of the digital revolution to media companies with genuinely popular products may soon start to outweigh the costs. But some media companies are dying, and a new gadget will not resurrect them. Even the Jesus Tablet cannot perform miracles.

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Much debate these days over innovation and open systems. Apple is a semi-closed system and I think that's good. What's closed? The mechanism's integrity. What's open? Anything you want to create within that. The results speak for themselves.

Today at the COP 15 Climate Change Conference in Copenhagen, M.I.T. students introduced the technologically advanced Copenhagen Wheel. In addition to including various sensors and Bluetooth capability, the tire stores kinetic energy from braking for a later burst of speed.

The makers of the Copenhagen Wheel from M.I.T.'s SENSEable City Laboratory claim that the new features mark the advent of "Biking 2.0," a new era based on smarter bikes and easier rides. The wheel is certainly a step in that direction; it includes sensors for detecting distance, speed, direction, all of which are beamed via Bluetooth to the rider's iPhone. The wheel also includes a built-in lock that sends the rider a text if tampered with.

But the most notable feature of the Copenhagen Wheel is its KERS or Kinetic Energy Recovery System, a mechanism by which energy from braking is stored up for later use, giving the rider a boost when going up a hill or speeding through traffic. Some bicycle purists have already dismissed the wheel as a novelty while others suggest that M.I.T. has succeeded in reinventing the wheel.

[MIT via Inhabitat]

via fastcompany.com

Clever, economical design. I'll be interested to hear how the users of the wheel respond.

Incremental versus Disruptive

by Hutch Carpenter

I recently wrote up a post, "Innovation Perspectives - No Shooting Stars." In it, I discussed the issue of organizations myopically focusing on only disruptive innovations to the exclusion of more incremental or sustaining innovations.

In doing more research on the subject, I began thinking about the dynamics that apply when a firm pursues different kinds of innovation. A post by Venkatesh Rao, Disruptive versus Radical Innovations, was very useful for distinguishing between disruptive and radical innovations.

Building on that, I wanted a framework for delineating innovations based on their technology and business impacts. Because they're not necessarily the same. The four quadrants below describe the dynamics for innovations according to their technology and market impacts:

In each quadrant, there are different rationales and issues that apply. Let's take a look.

Existing Tech, Manage Existing Market

The lower left quadrant represent innovations that leverage existing technology, and service existing customers. This is every day innovation. The block-n-tackle innovation that keeps companies nimble and operating at rates above industry averages.

Example? See how Wal-Mart improved the fuel efficiency of its vehicle fleet:

"Wal-Mart has taken a number of steps, including the installation of diesel Auxiliary Power Units on all its trucks, and applying aerodynamic skirting. On the tire side, Wal-Mart is working with super single tires. and is testing nitrogen-filled tires and an automatic filling process to maintain constant tire air pressure."

Improving the customer experience is also a critical opportunity. In an era of social-media empowered customers impacting your brand, the consequences of failing to improve the customer experience are higher than ever.

But this quadrant is the one often pooh-poohed by many in innovation. I like the way PriceWaterhouseCoopers puts it in this blog post:

"An unintended consequence of the Innovators Dilemma has been that companies have begun believing that unless they were pursuing a strategy of seeking disruptive innovations, they were somehow losing out."

Wal-Mart's efforts have paid off. The retailer has held relatively strong during the Great Recession, as seen in its stock price. And Toyota famously gathered over million ideas a year from its employees to emerge as a global leader in the automotive industry.

Existing Tech, Create New Market

In this quadrant, existing technology is leveraged to create a new revenue streams. This is the quadrant where the following phrase applies:

"Good artists borrow. Great artists steal."

The simple application of a technology that serves one purpose toward a different purpose can be disruptive from a market perspective. It's not a large technological leap. It's the intelligent application of what's already at hand.

Twitter is a great example. The technology itself is...simple. Web form. Subscription model. Limit to 140 characters. Yet it's revolutionized the way people share and find information, causing Techcrunch's MG Siegler to compare it to a modern day Walter Cronkite. All for a simple little web app. Here's what WordPress founder Matt Mullenweg says about Twitter:

"Whether the Twitter team intended it or not, they've built a killer and highly addictive reader platform with dozens of interesting UIs on top of it."

The thing with these innovations is that they are very much a market-determined disruption. This isn't some sort of EUREKA! the moment the technology is rolled out of the labs. It takes the market to say that it's disruptive.

Clayton Christensen (Innovator's Dilemma) types of innovation will often fall in this quadrant. Existing technologies applied in new ways to address the lower end of the market.

Venkatesh Rao has a great perspective on this quadrant:

"In fact, in most documented cases of disruption, the disruptive innovation was a minor/incremental change and well within the technical capabilities of the incumbent (and was often taken to market by a renegade spin off from the original company)."

This quadrant is the best one for producing organic growth for companies. It has lower risk, but produces meaningful revenue growth.

Radical Tech, Create New Market

If any one quadrant defines the popular view of innovation, it's this one. And that's not without good reason. In the previous quadrant, existing technologies are applied to new markets. Well, existing technologies have to come from somewhere. That's this quadrant.

This is the cool stuff that the press writes about. Check out AT&T's Technology Showcase for a great example of some of these new technologies.

Amazon's Jeff Bezos has done well in this quadrant. His latest innovation, the Kindle, is an example. It includes a new "electronic ink". Ability to read text aloud. It's incredibly thin profile.

And it's paying off. Amazon reports that the Kindle set a new sales record this November. Which points to the Kindle as a strong new revenue stream down the road, and a new source of sales for Amazon's book sales. A home run in this quadrant.

These types of innovations are important for maintaining the long-term growth rates of companies. They provide needed growth, replenishing changes in existing markets.

Which leads us to the final quadrant...

Radical Tech, Manage Existing Market

There are times a company's business is under attack, and it needs to address changing behaviors in its market. Innovations in this quadrant share the high risk profile of the previous quadrant, but they have a defensive nature to them. They don't seek to find new opportunities, they seek to address changes in customer behavior.

Hulu strikes me as an example of this. A joint venture of NBC, Fox and ABC, Hulu lets users view shows on computers. This initiative addresses the emerging market shift away from televisions to viewing on all sorts of devices. It's a better answer for this shift than the music industry initially had for the proliferation of MP3 songs on various P2P sites.

Gary Hamel has noted the increasing volatility of markets across the globe. Customers have better access to information about new options, and are willing to shift their spending more quickly. With this dynamic, expect some increase in activity for innovations in this quadrant.

Companies Need a Portfolio of Innovation Opportunities

In a recent Accenture survey, 58% of executives said their organization is looking for the next silver bullet rather than pursuing a portfolio of opportunities. When I hear that, I think first of the upper right quadrant (radical tech, create new market). These types of innovations are incredibly important, and should be part of a company's innovation efforts.

But there's really a good basis for expanding that view to look at the other types of innovation: technology vs. market, disruptive vs incremental.

Hutch Carpenter is the Director of Marketing at Spigit. Spigit integrates social collaboration tools into a SaaS enterprise idea management platform used by global Fortune 2000 firms to drive innovation.

Labels: Accenture, amazon, ATT, Disruption, Hutch Carpenter, Incremental Innovation, Innovation, kindle, Toyota, Twitter, wal-mart

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posted by Braden Kelley at 5:27 AM

http://www.business-strategy-innovation.com/2009/12/four-quadrants-of-innovation.html">

This is a good one to read and explore if you're about to put a good bit of effort into building an app in Revolution. Although Rev is a fourth generation language (4GL), it still requires a great deal of effort to build a product with it and bring it to market. Therefore, forethought and strategic thinking are very much still in order.

Great find by Rick Hapanowicz. Particularly like the info on cargo cults which so apt in today's app building frenzy.

Good watch and a good read. Worth the time.