The previous article explored investing in disruptive technologies.
How can you incorporate disruptive technologies into existing products? With much difficulty…
Developing the new technology is likely to be the “easiest” part (not that it is actually easy). Actually using a disruptive technology in an existing, successful, proven product has an incredible range of forces aligned against it – technical, product, process, people, corporate, and especially customer! Note that we are talking about disruptive technologies; if a technology can easily be incorporated into an existing product, it is probably not really disruptive.
Before we go into implementing a disruptive technology, let’s focus for a moment on the disruptive aspect. In addition to technology, the disruption applies to changes to the product needed to support the new technology. Disruption also applies to how the product is used, processes and systems using the product, the ecosystem built around the product, support, and especially customers.
Since we are looking at incorporating disruptive technologies into existing products, the most important thing is to ensure that customers continue to give you money – if you interfere with a customers ability to give you money you have failed. I plan to explore this topic in future articles; for now remember that the ultimate goal is revenue.
There are three main ways a disruptive technology can be used:
- Create a completely new product addressing the same market. Initially this will address customers not well served by the existing product. Over time it may replace the existing product.
- Replace core parts of the existing product with the new technology.
- Extend the existing product.
There are many advantages to creating a new product. The adopters of a new technology have specific needs or goals that are not currently being adequately addressed. You can focus on these unmet needs, work directly with the customers, establish initial success, and build on it. In other words, address the Innovators and Early Adopters. Hmm, looks like we are actually applying the Product Life Cycle model we’ve been talking about for the last several articles!
Creating a new product provides a clean slate and a clean foundation to build on. This new product is smaller and does not have as many dependencies as a mature product. The new product is easier and cheaper to support and doesn’t have a backlog of thousands of bugs that need to be fixed The result is that it is much easier to modify, extend, and grow the new product.
A new product is appealing to customers who have reached the limits of existing products or who do not need the broad scope, integration, stability or cost of a mature product.
There are three things a new product does not have: a customer base, breadth of capabilities, and revenue. Looking at the product life cycle model we see that the path for profitability in a new product is for it to assume the characteristics of the product it is replacing!
If you assume that a new product built on disruptive technology is going to immediately replace an existing mature product, you will be disappointed. If you try to force a new product – or an existing product with major changes – onto existing customers you will receive massive resistance. Note that if you force a customer to move to a new product, you also open the door to them considering other products, not just your replacement…
In general, forcing customers to make changes in how they use a product is a bad idea. Changes in interfaces, capabilities, integration, or operation can have great impact on a customer’s business. Changes to a product can easily break existing processes and workflows, causing problems with little or no perceived benefit.
One common reason for forcing new products on customers is “we can’t afford to support two products that do the same thing”.
In this case you don’t have two products that do the same thing: you have an existing product that is widely used and is generating business value for customers – it is in the majority market segments of the product lifecycle. And you have a new product that is (hopefully!) interesting to innovators and early adopters. Even though the old and new products appear to be addressing the same market, they are addressing different segments of the market. They have very different requirements and expectations; attempting to force them together will not end well.