As per Moore’s Law, technology is progressing faster than ever before. Accordingly, disruptive innovation is happening more than ever before. Unfortunately, many established companies have not been to thrive in these emerging innovative markets. As noted in the ‘Discovering New and Emerging Markets’ article, one major reason for their failure in such dynamic environments is their inability to fail and pivot quickly.1 The companies that have been able to test out their assumptions on a smaller scale and pivot their investments and resources when necessary have succeeded.
It is not surprising that this lesson has been taken to heart by today’s startup community, as is evidenced by the agile methodology: a product development and project management approach rooted in adaptive planning, early delivery, and continuous improvement.2 Its primary goal is to enable companies to respond to change quickly and easily. Most startups today operate in an agile fashion. Similar to Christensen’s recommended ‘discovery-driven planning’, an important step in product development in many of today’s technology companies is the ‘discovery’ process, in which the product manager uses behavioral analysis and research to validate assumptions about the product and market.3 It is an iterative process that enables continuous testing of the product to ensure that the product meets the needs of the market.
Today’s advanced customer behavioral analytics tools also lend themselves beautifully to Christensen’s assertion that ‘no one’ can understand the influence of a disruptive product before they have experience using it. Having learned from past mistakes, many of today’s technology companies are using such behavioral analytics tools, such as Google Analytics and Mixpanel, to understand how their customer behave and help drive product and company strategy decisions. Christensen was certainly right: it’s hard to know how customers will act based on how they say they will act. However, with the exponential growth of data, it may be easier than ever before to understand customer behavior. For example, analysis of Google search data (using Google Trends) can provide us with novel insights into the inner workings of the human mind, including our truest needs and wants.
A legendary example of a company operating in an agile approach and using behavior analytics to adjust their strategy is the pivot of Odeo, a podcasting company, to Twitter in 2005.4 The founders of Odeo invested in creating a platform for podcasting around the same time that Apple launched podcast support for iTunes. After researching the market and understanding user adoption rates and customer acquisition costs, the founders of Odeo realized that they didn’t have a chance of competing against Apple. As a result, they pivoted their existing platform, which had great scalability and potential, to create Twitter.
Fortunately, we now live in a world that’s moving towards agility, where we are encouraged to fail fast and often. As per Christensen’s suggestion, it’s vital that we learn to quickly adapt in today’s ever-changing world of emerging technologies to succeed.
References:
1. Discovering New and Emerging Markets (Christensen, Chapter 7 of The Innovator’s Dilemma, 1997)
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