The product lifecycle is: Functionality > Reliability > Convenience > Ultimately to Price
Only companies who are paying CLOSE attention to the customer will see the points at which their needs and wants will evolve.
Hard Disk Drive Industry: In this industry, when the best firms succeeded they did so because they listened responsively to their customers and invested heavily in the technology, products, and manufacturing capabilities that satisfied their customers’ next generation needs. But paradoxically, when firms failed – it was for the same reasons.
- The industry had 2 kinds of firms: Ones that enhanced the products (rapid improvements to performance and capacity. Some incremental, some radical) and those that disrupted/redefined performance trajectories.
- The first took early leads, and the 2nd killed the first.
- One served what people wanted. Other served what people are going to want. The first did it to get into the lead, then stopped innovating.
- First the race was capacity (different materials and tech). Then those people got blindsided by people seeing the coming need for smaller-sized drives for desktops and laptops. Then solid state/flash memory. Then they all got smoked by The Cloud
Technology S Curve & Value Networks: Suggests that the magnitude of a product’s performance improvement in a given time period – or due to a given amount of engineering effort – is likely to differ as technologies mature.
- Rate of improvement at the beginning will be relatively slow. Then the rate will accelerate as people understand and adopt. Then it will decline as hit maximizations.
- The trick is to recognize when the S Curves of old and new technologies intersect. Recognize the technologies attacking from below
- The product will start in it’s “Home Value Network” to develop and grow. If lead by innovators, it will then find ways to invade and grow in Another Value Network.
- Sometimes the decisions made within a value network makes no sense outside of it. And THAT is the problem.
- Innovative technologies often work parallel to the S Curve of the established company, but below. The question is if the curve ever intersect.