In the recent issue of WIRED, Robert Capps has a great piece titled “The Good Enough Revolution: When Cheap and Simple Is Just Fine“.
His argument: In many markets, it is not high-tech innovation that rules, but products that trade power, performance, or fidelity for low price, flexibility, and convenience.
Think of Skype: Laggy internet calls that drop in the middle of a conversation, but they are free and can turn conversations into shareable MP3s. Skype now accounts for 8 percent of international calling minutes, and the service added nearly 38 million users in the second quarter of 2009, a 42 percent increase over the same period last year.
Or consider the success of the Flip, the very successful video camera from the US firm Pure Digital, released in 2007. This stripped-down camcorder had lots of downsides. It captured relatively low-quality 640 x 480 footage at a time when Sony, Panasonic, and Canon were launching camcorders capable of recording in 1080 hi-def. It had a minuscule viewing screen, no color-adjustment features, and only the most rudimentary controls. It didn’t even have an optical zoom.
But it was small (slightly bigger than a pack of smokes), inexpensive ($150, compared with $800 for a midpriced Sony), and so simple to operate—from recording to uploading—that pretty much anyone could figure it out in roughly 6.7 seconds.
Within a few months, Pure Digital could barely keep up with orders. Customers found that the Flip was the perfect way to get homebrew videos onto the suddenly flourishing YouTube, and the camera became a megahit, selling more than 1 million units in its first year. Today—just two years later—the Flip Ultra and its subsequent revisions are the best-selling video cameras in the US, commanding 17 percent of the camcorder market. Sony and Canon are now scrambling to catch up.
The Flip’s success is just the latest triumph of what the WIRED article calls “Good Enough technology”. Cheap, fast, simple tools are suddenly everywhere. We get our breaking news from blogs, we make spotty long-distance calls on Skype, we watch video on small computer screens rather than TVs, and more and more of us are carrying around dinky, low-power netbook computers that are just good enough to meet our surfing and emailing needs. The low end has never been riding higher.
What does this mean for innovation management? Is this the end of innovation and technology management altogether? Well, not really., It may just be a new beginning.
As the article shows very neatly, the leaders of “Good enough” low tech innovation come up with a lot of innovation: on the business model side, in their manufacturing, with regard to usability and functionality that matters today. Their focus often is customer value and nit so much a drive for performance.
This trend, by the way, is reflected by the recent announcement of chip maker AMD to market its new chips not any longer by clock speed or technical performance, but by names of what you can do with this set of chips (watch, share, create) … as they realized that sheer performance matters less and less.
I will use the WIRED article in my upcoming TIM lecture on Strategic Technology Management (fall/winter term09/10) at RWTH to discuss how we have to adapt our understanding of technology market when facing such trends. But read the Wired article today and rethink your understanding of technological innovation.