In an HBR article about Big-Bang Disruption, it discusses the importance of being aware of these fail often, fail early scenarios as a warning that the next market disruption is being sought, not by defining what it is, but by using trial and error to define what it is not. Then, at some point, once you have enough of a picture of what it is not, you invert your thinking and look at the negative space to see what it is.
Before Napster came on the scene, the only way we could get a customized music experience was the technological equivalent of the mix tape. But to make a good mix tape, you had to have the albums to draw from. Compilations were good, but they did not always have all the songs you wanted, and so you ended up with a lot of music in your collection that you did not necessarily want. Napster disrupted the music industry, not because the music was free (although it helped), but because as a consumer, you could now choose to consume only what you wanted, not just what you were given. In this way, as a consumer, you could demand exactly what you wanted, even if it had not been produced yet. It was an awakening for a lot of people that Adam Smith was alive and well in the realm of music.
Then the music industry managed to shut Napster down, but it was too late. The market had gotten a taste of “buy what you want/need when you want/need it”, and they wanted more. The music industry, not wanting to let go of revenues and the lifestyle in which they had surely become accustomed to, resisted the change, and used legal channels to assert its position that the old business models were sufficient.
Then apple came out with iTunes, embracing the market’s desire to make their own mix tapes with the music that they wanted, when they wanted it. It was an appropriate response, with a low enough price point per unit (99 cents) that would make it easy enough to support the artists, and a convenience of enabling a just in time purchasing model. Then, as a stroke of genius, now that they had created a marketplace for music, they also offered a device that would allow you to experience your purchases wherever you wanted. Remember the tag line when the iPod first came out? 1000 songs in your pocket.
1000 songs in your pocket was a cool idea. 1000 songs that you had specifically chosen because they actually meant something to you, even better. The iPod was by no means the first MP3 player. But it worked so well, not just because it was a well thought out product, but mainly because it had an entire business model of content behind it to support its value. So, to answer the age old question, iTunes came first as the business model, the iPod was there as way to reinforce its value, wherever you went.
The upshot of this thinking is this: if you are trying to find the next disruptive technology, fail often, fail early, and each time it fails, take the pieces that worked, and use them as kernels of expand upon for the next iteration of the idea. Once you have enough of a picture of what doesn’t work, invert your thinking about the problem, look at what does work, and build out form there. Then, before you launch your disruptor, make sure that your business model has some sort of mechanism to not only support it, but also to reinforce the value of your business model to your consumers. Think Amazon and the Kindle as another example. You may then get other entrants into the market place with similar technology, but you were there first, and chances are that these other entrants into the market place will be there with devices that reinforce your business model, rather than a business model of their own… at least at the start.
As for my response to the chicken and the egg? It was the chicken that came first, but not a physical organism, instead, as a concept. We had to have something called a chicken before we could then start talking about it’s egg. Before then, it was just an evolutionary state of an organism by some other name.
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