Creativity, Market Domination and Innovation

Executive Summary: Filter thoughts on creativity, competition, and market domination, through the lens of experience and business history. Play devil's advocate to the obvious- Is all creativity about finding monopolistic market positions? How about sustaining advantages through competition? From the desk of Silver-Bullets-Are-Often-Traps.

Overview
David Brooks wrote an interesting article on creativity, and the importance of creative minds seeking monopoly like market domination, for society:
http://www.nytimes.com/2012/04/24/opinion/brooks-the-creative-monopoly.html?_r=1&ref=davidbrooks&pagewanted=print

The article has some great lines, like "we sometimes confuse what is hard with what is valuable." I also found this article to be a good springboard to sift through some common thoughts and touchstones about creativity, competition, monopoly, and market domination.

An example from the non profit world, ModelAlliance.org, and its founder, Sara Ziff, may well be textbook cases for David Brooks' article. To get us started, let's break the article down into two contexts: Creativity in Industry and Business, and Individual Creativity.

A. Creativity in Industry and Business:
Let's pick key thoughts in the article around this context and find supporting cases for them.

Quote 1: "We often shouldn’t seek to be really good competitors. We should seek to be really good monopolists."
If you are familiar with the different flavors of innovation, David Brooks appears to be saying that breakthrough, disruptive innovation trumps incremental innovation.
Let's take Pharma industry as an example- the policy support for orphan drugs dovetails with this view.
In the technology industry, Facebook could be touted as an example of this strategy.

Quote 2: "It’s often more valuable to create a new market and totally dominate it."
Besides Facebook, Apple products like the iPod, iPhone and the iPad come to mind.

Quote 3: "The competitive spirit capitalism engenders can sometimes inhibit the creativity it requires."
Clayton Christiansen's examples from the hypercompetitive hard disk industry seem to support this. Business is littered with examples, where an organization's momentum often prevents it from acting differently, when required, to maintain leadership through market change. IBM had to face a major crisis to undergo change.

Quote 4:  "Value to society is often bigger (with dominant market positions)".
Facebook is being valued at over $100 Billion. That is a useful yardstick for impact on society.

Following this train of thought leads to these questions:
1. First Mover Advantage:
Are we only talking about the first mover advantage here?
There are very few business contexts where a first mover maintains a competition free market position indefinitely, or for a long time.

2. Sustaining the first mover advantage:
Once the market has been created, would you need skill in competition to find dominating differentiation, and to maintain profit margins?
Would you call that incremental innovation?
Or would you call that moving the market/ shifting the goal posts every time competition makes a move?
The current Apple iPhone 4S, and iPhone 5 rumors, are examples of this tactic.

3. Supporting Environment:
What kind of industry, business, public policy and cultural environment would support this consistently?
Would society be able to substantially increase the number of disruptively innovative people, and also allow a significant percentage of them to demonstrate achievements at a significant scale in society (these are two separate things)?

4. Impact on Society:
Given that several world economies have lost out on manufacturing exports, where sustained, incremental innovation is important, would it be fair to call breakthrough innovation a silver bullet?
Would a "portfolio" strategy toward innovation be more effective, whether active or passive (creating the right conditions for all type of innovation to prosper)?


B. Individual Creativity:
An individual's decision paths are complex, and heavily driven by the environment he/ she operates in. However let's simplify this section with some "devil's advocate" questions:

Quote 1: "Instead of being fastest around the tracks everybody knows, creative people move adaptively through wildernesses nobody knows."
This is a great description of one type of creativity. This type of person would be in the same category as Beethoven and Picasso. If even Steve Jobs could be said to have x number of great products in him, would you say this type of creativity is common?
What social, economic and cultural context would you need to harness this creativity?

Quote 2: "Competition has trumped value-creation."
In an effort to create value, wouldn't you need skill at competing for resources to achieve your monopolistic position?

Summary
Creativity and innovation come in many flavors. Diverse social, economic, cultural, and market structures may be required to support them all. Can we tweak these structures to support one type of creativity and innovation, with the intention of benefiting society more? Would it work, i.e. would it truly benefit society?


What do you think?

Google Plus, and the Facebook and Apple Context

Executive Summary: Google Plus' future is for Google to throw away. It is in the hands of the marketing team (because I think the product is on a Moore's Law-ish trajectory), and in the hands of the unknown disruptive forces hiding in dark alleys. Yes, this is an unabashed, quick and dirty speculation on Google Plus' opportunity. From The Desk of Talking-About-Google+-As-a-Social Network-Is-Like-Calling-Le-Louvre-a-Little-Hovel.

After living with google+ for a while, here are some key, qualitative thoughts.

Throw away all that propaganda about Google Plus as a social network. Calling Google Plus a social network is like trying to fit an elephant into a refrigerator. Evaluate Google Plus against Facebook and Apple on the following dimensions:

• Core Company Products

• Digital Platform Integrating Core Products as an Ecosystem

• Flexible Social Platform

• A Gateway to a Digital Life
 
Now that we have got the obvious Big, Hairy, Audacious Ideas out of the way, here are the qualitative teasers I was talking about:

1. For The Believers:
Are you already a googlephile who cannot live without, atleast a few, google services? Then, Google Plus is, for now, google accounts on steroids, with controls and features staked onto it.
 
Very nicely done, though. Thank you. Not tacky at all. Now, segway to that Journey song from Glee.
 
2. Indicative Product Feature- Circles:
Very nicely done. Again. Lives up to its billing as the slayer of social network privacy concerns.

The circles model of relationships reminded me of a "brain's trust" model shared by a macroeconomics professor in graduate school. The graphical privacy controls makes you want to get comfortable by tweaking privacy to your comfort level.

Note, I have not talked about features like Hangout. All of those also falls under the "Nicely done. Thank you" category. Why pick Circles? It jumps at you like no other Google Plus feature.

3. Integrated Digital Platform:
Picasa for pics. Videos.YouTube. Yeh. Google has some pretty powerful and mature products. Google Plus comes "preloaded" with some of these google products. Google Plus is a great way to sew these products together, making it a complete and a serious digital platform.
 

Would you say that Google Plus is like an Apple ecosystem? Can it be like an Apple ecosystem? Can it be better than an Apple and a Facebook ecosystem rolled into one?

I think it can, but that is a different story, a different blog post. All Google has to do is light a few fires. Keep doing what it is doing on products. Keep integrating them. Oh, and spawn a few Zyngas now and then.
 
4. A Social Platform:
Will Google Plus be a serious social platform? That would be a function of adoption (think share of social life) and switching (think identifying this as a primary social platform).

Google Plus may hit 20 million + users by July 20. However, how many users will migrate from Facebook to Google Plus? How many will live in animated suspension between the two worlds? Finally, how many will use Google Plus as a glorified GMail service?

What would be your estimate of an equilibrium/ steady state Google Plus user base? 150+ MM? 250+ MM? 400+ MM? While staying out of China (for how long?)? What is your sense of the tipping point when Facebook users start migrating from Facebook to Google Plus, network by network?
 
5. Privacy Controls:
Yes, finding myself in a few folks' circles, when I hopped onto the platform, freaked me out a little.

Also, Google Plus, better than google accounts, brought home the fact that I use a lot of google products and all that information is a sneeze away from being mapped into a digital life.

If you live off GMail, this should not surprise you. However, since I can claim to understand a little bit about security, privacy concerns will always pop up in my mind. Maybe it is just me.

6. A Gateway to a Digital Life:
To borrow from a wise man I know (who is also on Google Plus) - can Google be my gateway to a digital life?

The Pitch? Without much ado (to all the Google engineers, yes I am being simplistic :-)), Google can be my online identity, my Netflix, and my computing device on a cloud. Even as a glue for the google products we already (or will) use, Google Plus will be a formidable doorway.

I am inclined to draw a bubble chart mapping how the Apple, Facebook and Google future state ecosystems would look 5 years from now. For now, all I will say that in his early days, Henry Ford would have been proud to call his company Google. Think Google Products + Android + Cloud + Google Wireless (Definitely Maybe?).

That's enough crystal ball gazing for now. I have stretched my definition of "key qualitative thoughts" far enough. Moreover, I would like to sneak in the crystal ball gazing in digestible chunks.

What do you think? If you do, you know where to catch me for a lively conversation.

Smartphones, Hypercompetition and Integrated Marketing Communication

Executive Summary: You are a second ranked player in a hypercompetitive market. You learn, from an independent research house, that your customers are more likely to buy your products than your competitors customers are likely to repurchase theirs. What do you do? Do you utilize this in your marketing communication? From the Desk of A-Kick-in-the-Shins-Does-Not-Always-Save-Nine. :-)

The Statistics

While looking at statistics toward structuring a perspective on industry trends, I came across an interesting study on customer loyalty for smartphones, where, even though the iPhone outperformed Android phones in NPS (Net Promoter Score- a Bain methodology) metrics, (marginally) more Android users are likely to buy a similar device, compared to the number of iPhone users' likely to repurchase an iPhone.

 

Waiddaminute? Did you read that right?

 

The Communication Opportunity

 

Given the hypercompetitive smartphone market, you would think the Android marketer has hit the jackpot. You can imagine Google Android folks rushing to their agency with a new brief to launch the next multichannel campaign (broadcast, web, etc.) in no time.

 

You can even imagine a few briefs ("Android users keep coming back for more") and a few advertisements:
1. Android user sees a store sign, "New Android Phone" and buys one, while iPhone users are shown getting their grip right for the iPhone, or,
2. Android user gets another Android phone as a birthday or a Valentine's Day gift, "I always wanted another Android", or,
3. Voice over wraps up with "Even when independent researchers praise the iPhone, they can't help but admit that more Android users are likely to buy another Android phone, than there are iPhone users willing to buy another iPhone."

... and many more!

Some Structure and Strategic Thought

 

The standard approach may be pretty simple in the abstract: Corporate Strategy -> Market Strategy -> Communications Strategy -> Portfolio of Communications Tactics. However, things aren't as straightforward in the "real world", are they?

If you were an Android marketer who finds this statistic, you would consider a few things, not necessarily in a top down, structured manner:

 

1. Source and quality of information:
Is the source and quality of information firmly in your corner? Well, you'll take a firmly independent corner too, wouldn't you? It’s more than just checking if your competitor can throw a more effective/ damaging response with the same source of information.

 

2. Timeframe: Does this lead to a "multi-period game" over advertising where you do not win, or you have no first mover advantage, or both parties end up in an expensive stalemate with a negative outcome for you? Coke vs. Pepsi advertising is an example. Also, think about Pepsi stepping back from Superbowl advertising in 2010.

 

3. Communication Themes: What is Android's driving theme for the season or for the year? What is Android's multi-year communication and branding strategy? Does this drop in the ocean create ripples that turn in tsunamis, or should this drop be assimilated quietly using different tactics?

 

4. Portfolio of Tactics: Does the Android team have a portfolio of tactics aligned with its communication and branding strategy? Does the portfolio explicitly accept or reject this opportunity?

Digging into the Details
Let’s dig into a couple of the items listed above.

Timeframe:

Lets take one question- Do you think there are season spanning advantages to pushing the message? Here are some hypothetical situations that elaborate upon this. Say, it's the holiday season, and Android launches the campaign based on this research. Does Android have time to make an impact on sales? Does Apple have time to respond right away and nullify the advantage? Can Apple hit back harder around the same theme at the next key sales period?

The Source and Quality of Information:

The study, using the Net Promoter Score methodology, declares that the iPhone outperforms others in user loyalty:

http://www.zokem.com/2011/01/in-the-us-market-iphone-outperforms-other-mobile-platforms-in-user-loyalty-by-a-wide-margin-android-is-second-blackberry-fourth/

Given the number of iPhone users that have stuck through a lot of thin (network, antenna, cracked case, etc.) this should not be surprising. However, as you scroll past the Net Promoter Score based results of Mobile Platform Loyalty Ranking graph, and down to Repurchase Behavior graph, you would note an interesting result.

89% of Google Android customers would buy a similar device in the future. Compare this to 85% of iPhone customers being willing to by an iPhone in the future.

Huh?

Now, there are various perspectives to this:

1. The iPhone has set very high expectations and is doing a fantastic job keeping its user engaged.
2. Android targets a different customer segment than the iPhone and phone’s pricing could be a factor. (Perhaps not for long-http://www.pcworld.com/article/219712/cheaper_iphones_why_apple_might_risk_its_brand_identity.html)
3. Also, iPhone’s AT&T exclusivity (for this study period) could be a factor in Android's stats.

We can come up with a few more as we think through this. However, what do you think?

Innovation and Tactics Series: Putting Cool to Use- the iPhone at work.

This is an old link and an old post, and I have it here because its an apt start to a theme I would like to pursue.

The iPhone is cool. The iPad is cool. All that cool- what does it do for you? :-)

Here's an example of putting cool to use:
http://www.youtube.com/watch?v=NAllFWSl998

Resonates more than Angry Birds? I bet Angry Birds wins too when more of stuff like this happens. How has technology made your life better?

Next stop: iPhones and iPads for the working life?

What do you think?

NYC Internet Week: Business Impact of Innovation

As part of a NYC Internet Week gathering, I got involved in a discussion on business impact of innovation in technology with two representatives from Pond5.com, Dana and Tom.

We discussed the poster child for technological innovation- the XEROX PARC center at Palo Alto. It was filled with the brightest minds who came up with amazing innovations in computing that are taken for granted today. Dana mentioned that the facility is a shadow if it's former self and is reflective of Xerox's current state of affairs.

The center had the first PC like workstation ready in the early 70s (the mouse was at hand in the 60s) and the Graphical User Interface available in the late 70s, but these brilliant ideas lay around within the walls of the facility. However, they captured the imagination of Steve Jobs, who successfully pushed them out to the market and created a successful company out to them.

The question is, was Steve Jobs alone responsible for the business impact of such innovation? Was Bill Gates the primary force? Would you also consider advancement in manufacturing technology, as well as the Palo Alto cluster of innovation bringing skilled individuals together as important factors in the business impact of innovation?

Another thought to consider- isn't Xerox also continuing to innovate in some way? Are there levels of innovation? Based on my brush with managing innovation at a beverage company, can a gated process truly manage innovation?

The impending release of newer versions of the iPhone, and the apparent dependence of Apple stock value on Steve Jobs' presence in the company, are interesting cases that make you probe the nature and sustainability of innovation.

What do you think?