How Hits Work – Don’t Bother with Radical

As an innovation person, I’m always startled when I see a product or service which turns into a huge, overnight hit. Especially one which comes from nowhere.

The reason I’m startled is that innovation academics have long used a thing called diffusion theory to explain how new ideas get adopted by populations. The long and short of it is, you find a small group of people who aren’t risk averse and who are willing to try a new thing, and they tell their experiences to like-minded people who are more risk averse. The positive feedback from the first adopter influences the next to adopt, and so on. This process builds up until you get to the tipping point, where everyone adopts the new thing en-masse. Wikipedia explains this in more detail.

My surprise comes from the fact that this whole process takes time. Sometimes, lots of time. So, when it happens overnight, something else must be going on. Hit products – which I’ll define here today as ones where you get mass adoption without the slow build up from diffusion – shouldn’t happen.

Of course, hit products do happen. And I have the germ of a theory as to the reason.

My key observation is this: breakthrough, radical innovations are never hits. Hits happen when a previous breakthrough is incrementally improved over time, and then shifted sideways into an aligned problem space where they cause a revolution. In all the cases I’ve been able to find so far, this seems to be true.

Let me give you a historical example: the steam engine.

The steam engine was initially not very much use. It was invented in Greece in the first century AD – a boiler with two spouts on an axel. When the steam came out of the spouts it made the whole thing turn. Not very efficient. The breakthrough: the first time ever a motive force was created that wasn’t human or animal.

Some 1500 years later, a steam engine that could pump out shallow mines was invented. It was also not very efficient – the cost of fuel was greater than paying people to bail out the holes.

40 years later, a more efficient engine came along that could do deep mines. It was till expensive, but cheaper than using humans or animals. Steam pumps started to spread.

A few years after that a highly efficient engine was designed, one light enough to move around. Stephenson, the father of the railway, put an engine on rails and used it to tow loads. Then he opened a commerical railway between two cities in England.

Almost overnight, the world changed as railways exploded across the world.

The diffusion process occurred ordinarily for steam – it just happened in the space of pumping water. When Stephenson moved the pump into an aligned problems space – mechanical motive force for transport – there was no need for diffusion processes because they’d already happened somewhere else.

There are so many examples of this. Vacuum tubes, invented by Edison, hardly used until they found a home in commercial radio. Polaroid film, an optical oddity until it was used in sunglasses and instant photography.

What about the hits of today?

iPad: an incremental improvement of iPhone (the bigger screen) moved into the aligned space of media consumption even though previously tablet adoption was low. Avatar, the movie: just another sci-fi until James Cameron incrementally improved 3D (full depth perception, not just objects flying at you) and moved in into mainstream cinema. Previously, 3D was a gimmick. Google: an incremental improvement on search (better results) moved into the aligned space of contextually relevant online advertising. Before that, ads were about replicating paper.

Now, if this is true, what is the lesson for innovators?

Don’t invest in radical innovation – look, instead, for incremental improvements that can be moved sideways and turned into revolutions. Wait for someone else to do the breakthroughs, then build a business by leveraging the diffusion process they’ve paid for in an aligned space.

Perhaps that’s controversial, but I’ve not found an example yet that refutes this line of thinking. I’d be grateful if anyone can give me some examples that does.

3 Responses to“How Hits Work – Don’t Bother with Radical”

  1. Duncan Anderson
    July 23, 2010 at 9:14 am #

    James, you are spot on. Apple is a great example – universally regarded as an innovator, but they almost never invent anything completely new. Nearly everything they do is about taking an invention and working out how to make it better and find its true niche. Even the original iMac was just a collection of merging the screen and system case and standardising on USB for I/O. Hardly breakthrough, but it ended up saving the company and the market loved those fruit colours!

  2. July 23, 2010 at 4:12 pm #

    Also interesting to note how the development of the steam engine was hampered by patent law, which must have some drag on the market today as well.

  3. Stephen
    July 23, 2010 at 4:39 pm #

    Interesting to look at the history of the 'lightbulb' both in terms of evolution and the associated patent disputes.

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