Entrepreneurship Some Frameworks for Setting Innovation Strategy Geoffrey Moore Managing Director.

Entrepreneurship

Some Frameworks for Setting Innovation Strategy

Geoffrey MooreManaging Director

Darwin and the Demon © 2004, TCG Advisors LLCApril 19, 2023

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Agenda

• Some thoughts about Entrepreneurship

• Overarching Model• Innovation Types and the Market Maturity Life Cycle

• Examples of Innovation Types for• Growth Markets• Mature Markets• Declining Markets

• Discussion


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Thoughts about Entrepreneurship

• Key Attributes of Entrepreneurs• Drive to accumulate personal capital• Desire for accountability and P&L responsibility• Sees innovation in terms of competitive advantage• Invests in self and career for long term

• Entrepreneurship and Other Institutions• Non-profits: social entrepreneurship, spiritual capital• Corporations: entrepreneurs vs. line executives, staff analysts• Incubators: disconnect with survival-of-the-fittest ethic• Academic disciplines: no correlation, but not a fit for MBA• Engineering: source of innovation and competitive advantage


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Time

Rev

enu

e G

row

th

Technology AdoptionLife Cycle

Early Main Street

Mature Main Street

Declining Main Street

Indefinitely elasticmiddle period

End of Life

A

FaultLine!

E

DC

B

Overarching ModelMarket Maturity Life Cycle


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DisruptiveInnovation

ApplicationInnovation

ProductInnovation

PlatformInnovation

ProcessInnovation

Line ExtensionInnovation

Business ModelInnovation

MarketingInnovation

IntegrationInnovation

StructuralInnovation

Value ChainInnovation

Broad Universe of Innovation Types

ExperientialInnovation

Renewal


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DisruptiveInnovation

ApplicationInnovation

ProductInnovation

PlatformInnovation

Innovating for Growth Markets


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Governing ModelTechnology Adoption Life Cycle

Pragmatists create the dynamics of high-tech market development

Innovators EarlyAdopters

Early Majority Late Majority Laggards

Techies:Try it!

Pragmatists:Stick with the herd!

Conservatives:Hold on!

Skeptics:No way!

Visionaries:Get ahead of the herd!


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Market Development Model

Chasm

EarlyMarket

Innovation strategy changes at each stage

Bowling Alley

Tornado

Main Street


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Innovating for Growth Markets

Disruptive Innovation

Application Innovation

Product Innovation

Platform Innovation

• Complex Systems: Oracle relational database (vs. hierarchical)• Volume Operations: eBay auctions (de novo – no precedent)

• Complex Systems: Agile PLM (distributed ECO management)• Volume Operations: Nokia SMS (text messaging on cell phones)

• Complex Systems: EMC SANs (Storage Area Networks)• Volume Operations: Palm Pilot and Treo (PDAs done right)

• Complex Systems: Salesforce.com (Internet as a computing platform)• Volume Operations: Sony Playstation (entertainment computing)


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ProcessInnovation

Line ExtensionInnovation

Business ModelInnovation

MarketingInnovation

IntegrationInnovation

Innovating for Mature Markets

ExperientialInnovation


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Governing ModelThe Fractal Structure of Maturing Markets

• Tornado Phase• Roll out new

infrastructure• Focus on standards

• Mature Main Street - 1• Differentiate experiences• Focus on narrow segments

• Early Main Street• Expand functionality• Focus on broad segments

Total Available Market

PC

Mobile Laptop

Server

PDAs

Task-specificDevices

SmartPhones

Cost Reduction

• Mature Main Street - 2 • Reduce cost & complexity• Focus on lower base price


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Fractal Marketing: The Nth DeviceThe Example of Telephones

SecuritySystem

PDA

KitchenPhone

OfficePhone

BedroomPhone

CarPhone

CordlessPhone

BroadbandLine

CellPhone

Intercom

Babycam

EmailDevice

GamePhone

SpeakerPhone

Fax

EmergencyPhone

WiFiPhone

VOIP Phone

Video Phone

RingTones

The “Aneurism”Effect


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PCProcess

Innovation

Integration Innovation

Business Model Innovation

Marketing Innovation

Experiential Innovation

Line Extension Innovation

Add value at the surface

Reduce costs at the core


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• Complex Systems: Cognos Scorecards & Planning (added to BI base)• Volume Operations: HP inkjet printers (home, photo, portable,

commercial)

• Complex Systems: Cambridge Technology Partners RAD methodology

• Volume Operations: Amazon’s one-click sales process

• Complex Systems: Cisco IBSG (free Internet strategy use consulting)• Volume Operations: Apple retail stores (“better together” value

proposition)

• Complex Systems: McKinsey Quarterly (thought leadership)• Volume Operations: AOL’s email (“You’ve got mail!”)

• Complex Systems: Synopsys pricing (from license to lease)• Volume Operations: Netscape browser (the power of free)

• Complex Systems: SAP R3 (ERP)• Volume Operations: Microsoft Office (productivity & collaboration suite)


Marketing Innovation

Experiential Innovation

Business Model Innovation

Line Extension Innovation

Integration Innovation

Process Innovation


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StructuralInnovation

Value ChainInnovation

Broad Universe of Innovation Types

Renewal


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Innovating for Declining Markets

Renewal Innovation

Value Chain Innovation

Structural Innovation

• Complex Systems: IBM IGS (from product-led to services-led)• Volume Operations: Adobe Acrobat (from PC franchise to Internet)

• Complex Systems: Solectron outsourcing (contract manufacturing)• Volume Operations: Dell Direct (disintermediating retail)

• Complex Systems: BEA acquiring WebLogic (beyond Tuxedo legacy)• Volume Operations: Visio getting acquired by MSFT (out of market

runway)


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Discussion


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Thank You

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Entrepreneurship Some Frameworks for Setting Innovation Strategy Geoffrey Moore Managing Director.

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