burning platforms

Old economy ecosystems signal innovation opportunities

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rail-crossover-points-2Paul and I have been writing mostly about ecosystems and platforms in the abstract to date, not spending a lot of time talking about specific companies or industries.

We took this approach because we wanted to establish a firm foundation about ecosystems and platforms generally, that wasn’t subject to debate about their applicability to one industry or another.

In the next several posts we will be looking at two diametrically opposed industries and the importance of ecosystems and platforms to both of these industries. Fittingly, I’ll be looking at the importance of innovation in ecosystems and platforms for an “old economy” industry – the railroads, while Paul looks at the importance of platforms and ecosystems in a new economy company – Alibaba.

On the (rail)road again…

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Innovating like it’s 1999

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1999-partyTo borrow a phrase from the musician formerly known as Prince, we are innovating, at least in regards to platforms and ecosystems, like it’s 1999.  This isn’t to suggest innovation is making beautiful music, but to take you back to a specific point in time and think about the conditions.

In the late, late 1990s and very early 2000s, many individuals and corporations were experimenting with ecommerce, learning what the “web” would do to and for commerce.

Thousands of startups obtained billions of dollars in venture capital money to exploit the new idea of e-commerce.  We were assured that this would be the end of brick and mortar stores.  Every industry would be disrupted by the web.  Pet owners would go to Pets.com, famous for its sock puppet mascots.  The CEO of Accenture would leave his post to become CEO of Webvan, which would revolutionize grocery shopping and delivery.  And so on.

Mostly what happened in that period was a vast blooming of a number of experiments on the web, which led to the “dot com” crash only a few years later and drove many of these startups and some larger, established companies out of business. Most of these crashes happened because no one had figured out how all of this new ecommerce stuff was supposed to work, or because of vague promises of the ability to monetize eyeballs.

New technologies or capabilities will always create a “land rush” of companies, new and established, who seek to stake their claims. 

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Widen the aperture, narrow the focus

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widen-the-aperture-narrow-the-focus-real-value

Today, customers are busier, smarter, have shorter attention spans and most importantly have less desire to make products or services work together.

Apple,  Amazon, and EBay are examples that  have taught customers that products, services, data, experiences, and design can all work together to provide a totally seamless experience.

Increasingly, this is what customers are increasingly wanting, and to do that you’ll need to rethink the way you innovate.

In Jeffrey Phillips post “Using ecosystems to build seamless experiences” we raised this present poor understanding within a business, that many lack a good understanding of customer needs.  Actually, it is far worse than we initially felt, still more on that later.

This is a longish read but an important one, to frame our need to think through innovation differently, through a new lens. Take your time, knowing why we need to change is critical. There is a new innovation era that holds promise if we think differently.

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Using ecosystems to build seamless experiences

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source: uxmag.com
visual source: uxmag.com not text

In the first post of this series, Paul Hobcraft framed what we believe is an exceptionally important issue:  innovation doesn’t really work the way we’d like it to.  Far too often, innovation creates incremental, discrete products that don’t seem to drive customer engagement, don’t create disruption in the marketplace and don’t drive a significant amount of revenue or profit.

There are many reasons we could point to – poor understanding of customer needs, risk and uncertainty constraining innovation teams, lack of innovation process and training on the part of the innovation teams, little to no funding, and so on.  These are common challenges that innovation teams face.

However, we believe that many innovation challenges stem not from a lack of internal knowledge or capability, but from misunderstanding the customer and his or her expectations about experiences.  Customers today expect seamless experiences, supported, maintained and enabled by complex ecosystems of products, services, business models, channels, information, and complementary products and services.  Customers aren’t interested or willing to acquire disparate products and services and integrate them. Increasingly customers prefer to acquire seamless experiences, and this expectation will dramatically change how companies innovate.

The problem of narrow focus

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