Published: September 21, 2009 in articles » management by Thomas Baekdal
Almost all my articles are about two things. How to understand the change that is happened all around us, and where I think you should focus your energy. But, every time I write an article, a number of people always comment that the old world is still important, that the world doesn't change that fast, or that you should probably do both.
Obviously, the world isn't black or white. Nor can we change something from one day to another. What is more important, people are generally not at ‘the same stage.' We have early adopters, early followers, late followers, and the impossible laggards.
Despite that I write articles where I try to persuade you to not focus on search engines, your website, or even email. And I mean every word of it.
I either do, plan to do, or try to do everything I write about myself. I do not always succeed. I often have to change my plans due to lack of resources. And, I spend much time advocating and lobbying my views, because you cannot do anything if the people around you don't share your vision.
The question is what should you do? Not theoretical speaking, but in a real world situation.
In the real world, there are generally four things you need to do to be successful. Plan and prepare for the future, work in the present, support what you did yesterday, and ignore out-of-date ideas. But, to explain how that work, we need to take a step back and first discuss how this is about people and where the real value is.
The graph below is Geoffrey A. Moore's idea diffusion curve (as many of you are undoubtedly already familiar with). It illustrates how a product (physical or virtual) goes through a population. The x-axis is how it populates over time, and the y-axis is the amount of people at each stage.
Take a simple example like email:
This looks pretty simple. What you need to do, in a real world situation, is to create something that appeals to the majority of your market. In a real world situation you still need to create a website, you still need to optimize for search engines, and you still need to support traditional media.
The world isn't that simple though, because you cannot design a product from one day to another. It takes time to invent something new, and it takes time to get people on board. On top of that we now have so much choice, that we no longer care for products that tries to reach the general masses of people (mediocrity).
You need to show your audience that you are a leader. That you can help them move forward. That your product is "the" choice to make, because you understand the market.
Seth Godin illustrated this brilliantly in his book "The Purple Cow" with the graph below. The real value comes not from where people are, but from the step before it. It is the innovators who drive the early adopters, and it is the early adopters who drive the majority.
If you want to create a product, then you need to focus your energy on the early adopters. They will help you reach the majority of your market, mostly via social channels.
The value curve also illustrates where you should focus your energy and resources. If you want to be successful, then most of your time must be spent on ‘the next thing,' and the rest should be maintained and automated to the best of your abilities.
Please note: The people element is very important. "the next thing" is not just about creating new products, it is more so about what you want people to do next and what is their next reaction. Case in point: Most people think of customer support as something that follows your product. But, customer support should be looked at proactively, and help form "the next thing."
We can now use this to form a business plan in four different layers. What you should plan, do, support and ignore - as illustrated in the graph below.
You should actively try to realize your future plans, test out new ideas, and create something for your early adopters to play around with. While doing that you should spend even more time making sure that your early adopters and early majority are having a great time with your new products.
You should also support the products you did ‘yesterday,' even if they are no longer an active part of your strategy. Answer people's questions, provide tips and gently push them towards your new ideas.
Finally, you need to free up your resources, by saying no to things that no longer makes sense to use. This is extremely important, and one thing that most companies fail at. You also need to say no to old ideas far earlier than what you might think. There is no value in laggards, so you need to say no to them before you reach that point.
Case in point: Apple destroys old product lines when they are peaking (and introduces new products to replace them). They spend no time supporting laggards, instead they focus all their time on where the real value is.
One example is the car industry, and companies like General Motors. If they had embraced this plan 5-10 years ago, then they would not have gone bankrupt.
Of course, there are always special cases, where you are creating niche products that go against the norm. But, they too have to change with the times. Even Ferrari is looking into creating more fuel-efficient cars. And cars like the 2010 Fisker Karma are showing the way.
The same goes for web design. Instead of a traditional website, your plan should now be to move your content to where people are. While doing that, you should embrace the social world and use your website as a hub (do this now, not tomorrow).
You should also still support the ‘old world' of websites and blogs. But, you should no longer spend any more time creating traditional websites.
BTW: This is an identical copy of my current business plan. This is what I am doing with baekdal.com, and trying to do with a number of other sites.
It is the same with marketing and PR. Plan for social news. Do social networks, support TV & magazines, and ignore print catalogs?
This is your real world strategy.
Writer, Social Media Advocate, Project Manager and Internet Manager
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:)
great way to visualize! big thanks!
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Thanks Marco!
Isn't the technology adoption life cycle by its very nature misleading? Since it depicts adoption, the actual number of users is not shown.
If the "late majority" is as numerous as the "early majority," doesn't that make the values of the groups equal? E.g. Blogs have more visitors than social hubs at the moment, since the cumulative number of users (or cumulative user acceptance) is greater. Or, big family V8s make more money than fuel efficient cars.
Isn't this kind of a paradox?
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Fredrik, Yes and no. In terms of purchasing power then yes, but in order to get them to actually buy it you need to attract the group before it. As such focusing on the late majority is a losing game (and thus less valuable).
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Excellent article. Your visualization and explanation is awesome!
I think it is important to make sure these 4 steps are looked at like one fluid motion. A product/campaign/etc is planned, then transitioned into something we do, once we have done it we now support it until we can safely (without harm to the business) ignore it. It is not just an on-off switch of plan, do, support, ignore. We make internal decisions to do these things, but a customer shouldn't be able to easily pick the date something changed from do to support.
One other thing to note is that we need to make sure we are planning and doing things that carry the weight of the support and ignore items. For example, if I were Williams-Sonoma I wouldn't just stop mailing catalogs tomorrow because they are a dead medium. Catalog mailings should be tapered off and replaced by things like their retail stores, emails, social media channels, and other various marketing plans.
Your article, as usual, is very useful. Can't miss any of them.
Wonderful article as usual.
This probably is a linear over-simplification of the entire process just like evolution. People start to expect changes and acceptance almost immediately.
It is a great learning tool but the practicality would depend upon a lot of complicated ground realities that need to be assessed at various stages of product/service introduction and acceptance.
I would suggest a lot of patience along the way to make the painstaking process endurable.
While you're right on describing the product lifecycle and value relation, one thing is missing: the risk curve. Focusing on the upcoming technologies has a huge risk, projects often fail terribly due to misunderstanding of the current trends, or just coming "too early".
That's why many companies choose the moderare profit, if they see less risk in it.
Thanks a ton, really helpful.. helps me think my advertising budget through. I am looking to soon start a company and focus most of my advertising on non-traditional mediums!
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Thanks all!
As in evolution itself, development on the net tends to
leap at certain junctures and it is not always easy to
anticipate these jumps or trend changes before they are
about to happen. I do see a movement towards short
video info clips embedded in sites and blogs as a preview
to a larger clip that is offered for sale (like a movie trailer)
A very simple concept ignored by too many businesses. The ideas presented in the article seems to show exactly the best possible answer in terms of any business investment at this point in time (and most likely in the near future).
This was one of the most interesting reads I've had in a while on your website. Thank you Thomas!
Thanks for your article.
Tom-
I love the chart. I think it illustrates something few executives appear to grasp. That being said I think $4 gas is what temporally killed the SUV. IMO big family V8s, trucks, and hummers all still have markets.
People with a few children that car pool to school, or those that work construction, or need off road vehicles still need these types of vehicles regardless of the environment or the economy. To say GM was/is out of touch with innovation may be true but generally people that are single or those that live in the city tend to buy smaller more fuel efficient vehicles anyway.
The big three should however be moving to new technology like hydrogen and natural gas and start making those big vehicles out of aluminum and composites. If I could buy a Ford Expedition that weighed 1200 lbs. less than the current model I would. Either way though I still need a car that I can take to Home Depot, car pool 7 kids to school and take a comfortable family of 5 on a road trip. Sure my second car is a Honda Civic, but driving several thousand miles with 5 people in a 2 door Civic is less than nice after the first day unless you're are the one driving.
Great way to explain and ilustrate a theory which seems to be far to much ignorred. I wish my university profesors could present like that.
I was wondering why best companies ignore all that you are writting about. IMO once big company succeeds eg: selling SUV's it promotes people responsible for that sucess, their influence on the organization grows and that tend to stick to do what they know best (selling SUV's). Market changes but the managment sticks to the previous paterns. This would explain why companies are market leaders for rather short time - speccially on changing markets (most traditional media companies fail to succed in the Internet).
Clark,
It is global now, stop thinking about American way of life - it is China where most cars are sold, they have one child and adults weight 170lb not 240 - SUV is a niche now. Have to go for small, cheap, economic cars to succeed.
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Ty, A family V8 is a type of engine that consumes a incredibly amount of fuel. That world is dying. But cars with 7 seats and space for a lot of cargo isn't.
The answer to make fuel efficient family cars isn't to make them smaller. It's to make them smarter :)
Former Kraft/Coke marketer now leading innov. P2P consulting co. launching The Brand Farm - an independent online community for brand marketing professionals.
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It seems like there's some natural tension between focusing so much on the future that you don't adequately monetize the present to actually get there. At the height of the curve is where max revenue is. Companies would be foolish to ignore that.
That said, somebody at the company must be thinking and planing for the future. It just can't be at the expense of the present IMO.
I like it! But, I wonder what you are trying to say with " traditional websites"? I agree with embracing the public and moving the content to "where people are " , but not all is about embracing the new technology, it's more about how you interact with the people in your web site. I don't think GM will be successful because creating more fuel-efficient cars, yes is a niche for the future, but they will only be successful if they convince people that the car is more comfortable, safe, durable in time, and so on, than the competition (for example Honda). Today GM has a TV commercial that tries the say "we are better than Honda" . But I hear from my wife, who drives a new GM car to her job everyday, "I wouldn't trade my Honda for a GM for anything in the world." Everything is not about being in the right path, but it helps.
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Sep 21
2009
Damir
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This is a really good read. Normally not interested in business theory however this is interesting.