- Shopping Bag ( 0 items )
Consider the cool new things that have been immediately successful: Apple's iPod, the flat screen television and Netflix. Now, switch gears and think about the major failures: the picturephone, the Segway and the Tablet PC. Billions of dollars ride on this question: Why do some new technologies succeed and others fail?
We've all heard it before: "Build it and they will come." Well the last six years have proven that at least in the technology industry, that maxim is shockingly — and expensively — untrue. But there's an alternative approach, one that is user oriented and not so supplier-centric. That's what The Change Function is all about; technology companies need to become riveted to the needs and wants of the users they seek. Users are in charge of what they spend their money on — and they always have been. The technologists may be the magicians, but the users have the checkbooks.
According to Steve McMenamin of Atlantic Systems Guild, "People hate change … and that's because people hate change … I want to be sure that you get my point. People really hate change. They really, really do." Back in 1962, Thomas Kuhn wrote Structure of Scientific Revolutions. Kuhn suggested that the entrenched interests in an old paradigm will resist change as long as they can until their own theories start to encounter massive holes in explaining the phenomenon at hand. Crisis precedes change. It takes crisis because change is difficult!
What are some ways folks have crisis in technology? What do folks want so desperately that they might consider their situation a crisis? Even if a new technology solution is disruptive by some technical assessment, it is often unclear to the users that such is the case regarding their own wants and needs.
The good news? Creating technologies does not have to be hit or miss. When do users have a crisis? When all their friends have a flat-screen TV and they feel like dopes admitting that they don't. Who doesn't have a crisis? The guy already satisfied with his cable modem service who's being bombarded with advertisements to switch over to DSL service.
The Total Perceived Pain of Adoption
Why do we open our wallets and decide to buy something, anything? What takes us from being potential customers to actual customers? Most people say this is an easy question: When the price is right. Isn't that all there is to it? Not at all. Much of the time, price accounts for less than 10 percent of the total perceived pain of adoption, or TPPA.
If the level of crisis is higher than the total perceived pain of adopting a new solution, then a change will occur. If the crisis is lower, then things will stay as they are.
Why Technology Fails
The Picturephone was a device developed by Bell Labs in 1956 as a prototype and launched by AT&T at the 1964 World's Fair in New York. It consisted of a telephone handset and a small TV. In other words, people talking on the phone would be visible to those with whom they were having a phone conversation.
Shortly thereafter, Picturephone service began between New York City, Chicago and Washington, DC, at a cost of $21 for a three-minute call — and that was on top of the hardware cost of around $500,000 for the Picturephone itself. AT&T executives were convinced that three million units would be operating in homes and offices by the mid-1980s, bringing in revenues of $5 billion a year. However, AT&T banked on network effects to drive adoption of its Picturephone. What it didn't understand was that customers had little innate desire to see live facial expressions at the other end of the line. In other words, there was very little user crisis.
Technology will only be accidentally successful if the focus is on what can be created. Systematic success — whether it's in creating new products, building great companies or changing the world — comes to those who manage to see the world through the eyes of others … to understand their crises and to help them find less painful ways of changing their world for the better. Copyright © 2006 Soundview Executive Book Summaries
|1||Silicon Valley, we've got a problem||1|
|2||The change function||18|
|3||Is the technology industry ready for change?||29|
|4||Why technology fails||43|
|5||Four more failures||90|
|6||A future winner : flat panel display TV||101|
|7||Three more future winners||115|
|8||One future loser : RFID||127|
|9||Three more future losers||143|
|10||The change function in action||154|
|11||Ten sets of questions||169|
|12||What to do?||194|
Posted March 13, 2007
Intel icons Gordon Moore and Andy Grove are each credited with a high-tech development axiom. 'Moore¿s Law' says the cost of putting the maximum number of transistors on an integrated circuit (like a computer chip) doubles every 24 months. This leads to the 'price elasticity argument' that infers the ideal price at which consumers will find new high-tech products attractive. 'Grove¿s Law' posits that people adopt new technology when it is 'disruptive,' that is, when it becomes 10 times better than anything else available. But author Pip Coburn, who writes with a lively pen, believes that high-tech leaders must put these revered principles aside, and focus instead on the people who use their technological marvels. Those who appeal to consumers will thrive. Those who do not will lose money as their products go down in flames. Is Coburn correct? As the founder of a firm that advises investors on high-tech stocks, he makes a compelling argument. We suggest that technology executives, portfolio managers, and anyone else concerned with the success of high-tech companies and their products will want to read this thoughtful book before placing their own bets.Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.