Why Game Changing Concepts Don’t Always Succeed
I worked with a tech company, let’s call them Technovation, who had created what appeared to be on paper, a game changing new product. Yet after 6 months of sales effort, they were nowhere close to achieving their projected sales.
Technovation was confident it had developed something unique and different. It was just a matter of getting the product into the hands of their sales channel, providing the sales channel with good marketing materials and off to the races. Just like they have done countless times before.
But this time it was different. Instead of meeting with great enthusiasm, the sales channel was hitting major resistance. Their prospects just didn’t understand what the value proposition was. It was as though the sales people were from Mars and the prospects were from Venus. What happened?
Underestimating the challenges of launching products in early stage markets
In my previous articles, we covered the challenges associated with launching new products in the early stages of an adoption cycle. Diffusion of Innovation theory tells us that there are a predictable sequence of “plays” that all new innovations need to traverse before becoming adopted by the mainstream market.
The first play starts by attracting tech enthusiast who get behind the concept. They begin to create the buzz and the visionaries (early adopters) start to take notice.
This leads to the next play in the innovation playbook: attract the visionaries (early adopters) who “see” (they can imagine) the potential value the new innovation brings to the table. The visionaries are willing to work with the development team to create a solution customized for their specific application.
As we discussed in article 1, in theory, once a company captures enough of these early adopters, the early majority market will take notice and see the value the innovation brings (there is tangible proof). Thus removing doubt and uncertainty of the merits of the innovation.
Capturing visionaries is a necessary play, but also a potential stalling point for aspiring new products. Recall in my article Anticipating the Discontinuity In the Technology Adoption Lifecycle Curve: AKA “The Chasm,” we discussed a discontinuity between the early adopters (the visionaries) and early majority (the pragmatist) that occurs. What Geoff Moore calls the chasm.
But was crossing the chasm Technovation’s real problem?
The chasm was not Technovation’s problem, at least not yet. They weren’t even close to reaching the chasm. That actually would have been a nice problem. It would have meant they achieved sufficient sales (and a selling process) to fund a chasm crossing.
Technovation’s real problem was their marketing and sales playbook was written and developed to play by the rules of an old game. A game the company had played, quite successfully in the past. But this wasn’t the old game.
Technovation’s prior marketing playbook did do some things right. They achieved tons of industry buzz. The tech enthusiast were giving them kudu’s, the write ups were awesome. And their beta testers loved the results they were getting.
But sales still sucked. What to be done?
Technovation assumed, like many firms before it, that all it needed to do was give the sales channel proper training and spend promotional dollars to build awareness to prime the pump. But no matter how hard they tried, sales orders were at a trickle.
They did what most companies do – try to retrain their sale forces on how to sell the game changer. The results? Still lack luster sales. All that money spent and the sales channel still doesn’t get it – so it seemed.
Why your existing marketing and sales playbook doesn’t work in early market situations
First, the Technovation’s existing playbook was designed to capture a set of customers who had a totally different job-to-get-done (personal computer based product) versus the job to be done by the IT manager, who had enterprise network issues to manage.
While potentially some of Technovation’s current customers might qualify as a good prospect, most of them did not. It literally was not their job to manage the corporate network.
Secondly, the product was a radical departure from the then competing alternatives. Even if the sales team was reaching the right job executor and decision maker, their message wasn’t complete. It didn’t explain the value proposition in a compelling way. And their reference accounts were too different from the early majority’s problem set, they weren’t credible.
Remember what Geoff More said about visionaries and early majority attitudes about each other:
The main difference between the visionaries of the early market and the pragmatist in the mainstream is that the former are willing to bet on the come, whereas the latter want to see solutions in production before they buy.
New rules for a new game
After reflecting on the dynamics involved in launching a new-to-market product, Technovation realized it was playing a whole new ball game with new rules. Its existing sales channel was not the right set of players to win the game, and certainly their existing marketing tactics would not work in this new game.
It needed to rethink its entire playbook. And they had an opportunity to write the new rules and create a blue ocean they could win. They needed to strike balance between what design thinkers call the “triad of success and constraints.” A topic we will explore in a future article.
Figure 1: Triad of Success and Constraints
Did Technovation Succeed?
Yes and no. They did indeed reformulate a new playbook and achieved initial success in executing the plays. Enough success, that is, to get the attention of a potential competitor, who liked what Technovation had created. As a result, the competitor made Technovation an offer they couldn’t refuse.
That’s the good news. The bad news is the competitor basically shelved the solution preferring not to disrupt its core technologies.
That’s life in the high-tech world.