INNOBLOG

In January, Apple CEO Steve Jobs introduced the companys latest innovation: The wafer-thin MacBook Air laptop. Jobs proudly touted how it was the worlds thinnest laptop, measuring just three-quarters of an inch at its thickest point. Commercials show the laptop coming out of a thin manila envelope.

Is the MacBook Air a good product? We get asked this question in different guises a lot. Is this a good product? A good service? A good business opportunity? A good process? A good idea?

The answer is always the same: It depends.

Quality is a relative term. You can only assess quality by looking at an idea through the eyes of a potential customer. Will they deem it to be a good product, service, business opportunity, or process?

Consider MinuteClinic, a leading provider of diagnostic services that is owned by CVS Caremark

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More at Innovation Insights

Its often said that generals "fight the last war. They use tactics that worked in the last war and struggle when conditions change in ways that render those tactics ineffective. For example, after years of bloody trench warfare in World War I, France built heavy fortifications along its borders (the "Maginot Line) to prevent a full-on assault. The Germans innovative "blitzkrieg model obviated Frances brute force.

Companies oftentimes run into the same trap. They assume tactics that led to success in the past will lead to success in the future. Even worse, companies can choose the right tactics to win a particular battle, only to find out they have lost the innovation war.

This often happens in disruptive circumstances. Market-leading incumbents can do everything absolutely right, achieve dominance in their core market, and stumble in the face of a disruptive attacker that changes the game through simplicity, convenience, or low prices.

Consider Sonys efforts in the battle for next-generation DVD technology...

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More over at HBSP's Innovation Insights

As many of you know, Innosight, the company behind the Innoblog, has deep ties to the Harvard Business School and the Harvard Business School Press, beginning with Innosight founder, HBS professor, and frequent HBSP contributor Clayton Christensen. Our latest collaboration is a blog Ive been keeping over on their site called Innovation Insights. The content is similar to what we post on the Innoblog, so Ill cross-post the first few paragraphs of my entries here, beginning with yesterdays:

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As the U.S. presidential primary season approaches critical contests in Ohio and Texas next week, pollsters are again taking a prominent place in the daily news. The unreliability of these polls provides an important lesson about innovation.

An unusually tight primary campaign has placed greater importance on frequently updated polling numbers. Different polls report different numbers, and polls change significantly from one day to the next. While this ensures pollsters get airtime on CNN, it makes it difficult for politicians and their advisors to make decisions based on poll results. Even polls administered 24 hours before an election can miss the mark.

Think about that for a second. How could scientifically derived estimates by professional pollsters modeling behavior that will take place 24 hours in advance be wrong?

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Head on over to HBSP for the rest!

Here at Innosight, we often encourage would-be innovators to consider taking a business model from one industry where it is well established into another where it is not. This type of play is often very disruptive, as the imported business model allows an entrant to either meet a previously unsatisfied need or meet an already satisfied need, but in a cheaper or more convenient way. MinuteClinic, for example, is a disruptor weve been tracking for some time now that has realized success by applying a fast-food business model to healthcare.

Baby Plays is another example of this type of disruption that is just starting to build momentum. Baby Plays was launched last October by a Houston, Texas mother who became frustrated as she watched her home fill with toys her twin infant sons quickly lost interest in. As she thought about how she could rent DVDs online, she realized that a rental option for toys would satisfy her need perfectly. But since no company she could find was offering such a service, she decided to launch one herself.

The Associated Press called it "Netflix for the toddler set. I think its a very appropriate label. Not only does the service work a lot like Netflix does (you pay a monthly subscription fee, create a wishlist of toys, etc), but I think Baby Plays is similarly disruptive.

It isnt a solution for everybody (at roughly 30 dollars a month it seems a bit expensive), but I think for many young, stressed-out mothers, or for those who might only occasionally care for children, like grandparents, the convenience offered by Baby Plays will trump online buying from eToys or trips to brick-and-mortar outlets like Toys R Us.

Rebecca Waber

 

Theres a lot of excitement, as well as a lot of skepticism, surrounding e-readers like Amazons Kindle and Sonys Reader. Believers in the technology are thrilled with the ability to carry an entire library around with them, as well as the ease of looking up an unknown word or immediately purchasing the sequel when they finish a novel. On the other hand, skeptics point out several disadvantages: the high price point ($399 for the Kindle), peoples psychologically high standards for replacing the revered book, and an e-books inability to be lent out, written on, or passed on through the generations. On balance, it appears uncertain if the Kindle will spark the reading revolution Jeff Bezos is hoping for.

One thing stands out to me amid the debate, though- why the exclusive focus on books?

The technology that makes these e-readers possible is electronic ink (eInk) and electronic paper, which work by using electrically charged ink particles suspended between two layers. The Kindle uses an electronic paper product made by eInk Corporation. The eInk technology has many novel advantages; not only does it allow you to change text after a document has been produced, it also works in all light levels, including direct sunlight, its flexible, and doesnt need to use power when maintaining an image. This gives it disruptive potential vis--vis both hard-printed media as well as electronic screens.

Many other applications would welcome these advantages and could be accepting of the tradeoffs. Some ideas that come to mind are signage and flexible electronic price tags. In fact, there is already movement down the non-book path; an eInk watch is already for sale, and several cellphones in Europe are being developed to have roll-out flexible displays that significantly increase screen real estate while maintaining the phones small form factor. These markets may well prove to be important stepping-stones for the commercialization of this potentially disruptive technology. Ultimately, given the more recent developments in both color and video-capable epaper, eInk may eventually allow us to rethink the very definition of screens.

 

The influential Wall Street commentator Henry Blodgett has some darned good advice for Yahoos Jerry Yang as he begins to digest Microsofts 45 billion dollar takeover bid:

Bring Steve [Ballmer, Microsoft CEO] a copy of The Innovator's Dilemma and ask him to read it before he goes to sleep. Suggest he focus on the chapter that describes how some companies have successfully resisted being disrupted (by creating stand-alone entities that are free to destroy the mothership).

Blodgett is exactly right. As he argues, Microsoft is so focused on sustaining its massively successful core products Windows and Office that its approach to the Internet is inherently shackled. It has never fully embraced the dynamic power of the Internet to unleash transformative new business models. Instead, it has used the Internet in a sustaining fashion to supplement its core properties (Internet-based help for Microsoft Word, anyone?), while clinging to web 1.0 platforms like Hotmail.

Unsurprisingly, MSN continues to lose ground to Google. While everyones favorite search engine wholeheartedly embraces cloud computing as the ultimate destiny of the Internet and fashions its business model accordingly, Microsoft demurs. Cloud computing, after all, will spell the death of its core products as we know them.

This, of course, is the sort of classic behavior that Clayton Christensen describes in his books. The essence of the Innovators Dilemma is that powerful incumbent companies become blinded by their success to the point where they cannot understand or contextualize new, different, and disruptive business models that threaten their core businesses. This pattern has played out in industry after industry, from the disk drive companies, minicomputer manufacturers, and integrated steel mills that Christensen first wrote about to the newspapers, cable TV providers, and department stores that continue to get disrupted today.

Microsoft is no different. Over a decade after it publicly committed to the Internet and took on Netscape, the company still has not opened the aperture to new and different business models, still has not thought outside the box about what the Internet is and can be. Unless it handles the Yahoo acquisition correctly by maintaining an appropriate degree of autonomy, or, as Blodgett calls it, leaving it free to destroy the mothership Googles disruptive march will continue.