I didn’t write this. Well, I did write *this* but not what comes below. I just found it interesting, very probably correct and related to a subject I and many of my elite team of readers will relate to.
By the way, WIRED magazine is great and currently the only printed thing I ever bother reading, apart from that Sunday Mirror I got free on Wizz Air and the copy of The Sun I bought for the family in an Esso station just so they could see a printed UK version of Pudelek.
This article was taken from the March 2014 issue of Wired magazine. It is available online HERE.
Tolstoy’s famous opening line, “Happy families are all alike; every unhappy family is unhappy in its own way”, captures a belief held by many businesses: that their circumstances are unique.
There’s no shortage of unhappy firms, seemingly powerless to stop a tide of disruptive innovations from overwhelming them, but are these situations that different from one another? Rarely. In fact, the principles at work are usually easily observable. The real problem is thinking they don’t apply to us.
Consider photography. We are taking more photos than ever, yet camera shipments are down 43 per cent on last year. In October, National Geographic’s Jim Richardson took just an iPhone 5S with him on location. Instagram sold to Facebook for $1 billion (£599 million); but what happened to Flickr? The hottest camera isn’t made by Nikon or Canon, it’s GoPro, a firm that’s scarcely a decade old. If there’s an industry experiencing disruption it’s this one. It’s also rich in examples of simple guidelines in action, none of which are new theories. I’ll share three of them here, in the hope that others facing disruption might see parallels with their own situation.
1. Always steer the ship towards the higher objective
Theodore Levitt (1925-2006) told his Harvard students: “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.” Amazon launched the Kindle recognising that people want content, not necessarily physical books. The success of Spotify and Airbnb are predicated on the same understanding. Photography is about sharing. Businesses focused on this objective have prospered, bucking the downward trend: sales of GoPro’s action cameras have doubled each year. Likewise sharing platforms such as Instagram have blossomed. Even Snapchat fits the pattern. These higher objectives exist for every industry, yet most think in terms of products and services. This is dangerously blinkered.
2. Don’t wildly exceed what people need
Often competitors get locked in an arms race, improving their products until they overshoot customers’ needs. This leaves room for simpler, cheaper offerings with a different source of value to move upstream, displacing the major players who get marooned in a shrinking market.
This phenomenon, detailed 17 years ago in Clayton M Christensen’s book The Innovator’s Dilemma, is exactly what is happening with digital cameras: the resolution and features exceed what most consumers need, but they underperform in areas of value. As smartphone cameras have reached an acceptable standard, the response from mainstream manufacturers has predictably been to move upmarket. This won’t end well.
There are striking similarities here with other industries. Disruptive airline easyJet is moving up into business travel, ARM vs Intel illustrates the pattern in computer chips, WhatsApp is impacting telecoms similarly. Those facing disruption in these industries are all unhappy in the same way.
3. It’s always the most effortless experience that wins
Consumer behaviour always moves towards less effort, something George Eastman realised in 1888, launching Kodak cameras with the tagline “You press the button, we do the rest.” Yet in 2012 Kodak filed for bankruptcy after being marginalised by another quantum leap in convenience — digital photography.
The smartphone camera is just the next step towards effortlessness. Not only is it always with us, the whole experience is simpler: just snap and share. The giants of photography don’t seem to be putting up much of a fight — Nikon’s first Wi-Fi-enabled DSLR appeared only last October. A new breed of “mirrorless” cameras is attacking the DSLR market and succeeding. Why? They are smaller, lighter and easier to take with you. The most effortless experience always wins eventually, whatever industry you’re in. New technology doesn’t mean new rules. Stick to these guidelines and you might end up happy — in your own way, of course.
Matt Watkinson is a designer, and author of The Ten Principles Behind Great Customer Experiences (FT)