Regardless of which camp you are in, it’s hard to argue that the major franchises in technology and business made big-time product strategy moves this year to invent or disrupt markets, grow or take share & change the rules. This article looks at 10 of the most memorable ones.
One Lens To Rule Them All
A few years ago, I came across Nilofer Merchant‘s list of proven techniques to change the competitive equation. The deck, replete with industry examples, is embedded below for those interested in the primer.
I made a Cliffs’ Notes-like summary (the full version is highly recommended!) that I’ve used over the years to look at how companies have used them over the decades.
2013 was no different – while the plays themselves surprised, delighted and even frustrated us at times, the underlying thinking goes back to techniques well understood and used as a playbook by the best in the business. Here we go, with the Top 10:
1. Commoditizing your Competitor’s Cash Cow
To say that Office is a cash cow for Microsoft is an understatement. In Q2 FY ’13, the division made $5.69 billion in revenue, approximately 20% of all revenue. This was a10% decline over a 12-month period. During this period, the move to mobile (smartphones + tablet) only accelerated. As of Q1 2013, the world’s largest maker of PCs shipped more smartphones were shipped than PCs.
Taking advantage of its dominant mobile OS position, Apple made a bold move to commoditize Office 365’s $99 / year cash cow by offering up iWork (and iLife) for FREE to all new users of iOS as well as Macs.It remains to be seen if this directly disrupts Office’s moat built around enterprise users in the coming years, but suffice it to say that Redmond is paying attention, as indicated in this official comment titled“Apples and Oranges” which casts this as merely an attempt to catch up.
2. Re-defining The Business You Are In + Turning a Luxury Into A Commodity
It’s safe to say that Uber (‘lifestyle meets logistics‘) is among the most disruptive (and useful) services we’ve seen grow over this year. So much so, that the laws around its existence and operation literally are being re-written.
Having a black car was part of a celebrity’s entourage – Uber has brought this within the reach of most, if not all people. In doing so, it has solved currency challenges, allowed passengers to easily split cab-fare, allow drivers to more easily afford their cars and addressed several other problems that have been holding up a rather innovation-starved transportation industry.
3a. Turning An Asset Into A Liability
The best example of this was Snapchat. Used to be that the place for teens to hang out was Facebook. Well, until the parents showed up. I saw this first hand with my nephews during this past Labor Day weekend – the adults were on Facebook, while my nephews were on Snapchat, Whatsapp and (gasp!) Twitter. More than any other app, Snapchat has turned Facebook’s biggest asset (its user base) into a liability (core user cohorts leaving and, literally, taking their friends with them). The silver lining is that teens still seem to be spending time on Instagram, which is owned by Facebook and is also in the photo sharing space.
3b. Turning A Liability Into An Asset
In the beginning of 2013, many were skeptical about Foursquare. Its v1 product was built for the social media over-sharing type who would “check-in” into a venue. Thanks to some solid passive geo-fencing technology and a v2 product that was made for the ‘other 90%’, the company leveraged its extensive database of check-ins and tips to create a recommendation service. Again, it’s early to tell where this goes but looks like what seemed a liability is now at the core of its biggest asset – the freshness of its content.
4. Selling A Lifestyle (And A Personal Image)
Instagram solved two user problems well – a) convert those pesky, unusable mobile phone photos into something valuable, even sleek and cool and b) make it brain-dead simple to share them. In doing these well, they rose beyond a successful app to promote a lifestyle. Almost every photos app which is competitive now has filters and emphasizes the simple sharing flow.
5. Transform Distribution
This definitely seems like the year that distribution of goods and key services was transformed – quite literally. Whether it is bringing farm-fresh food to your door step(Goodeggs), finding someone to run an errand or be your courier (Taskrabbit, Postmates), getting a ride (Lyft), letting your car earn its way while you are gone (Getaround), having grocery or high quality meals in hours (Instacart, Munchery)… the list goes on…. we even had private flying disrupted (Blackjet)… well, almost!
6. Taking On A By-stander
Given that users spent over 18 bilion listening hours in 2013 (up from 1.8 billion hours in 2010) and the adjacency to industries it already participates in (Music), Apple attacking Pandora in music radio was a much expected no-brainer move. Not to mention, Pandora was Top 3 mobile ad revenue generator in 2013. While it has not won (yet!) it’s a classic case of taking on a by-stander in a well understood industry to take (and protect) market share.
7. Attack From An Unexpected Direction
Two words – Apple Maps. Although the initial launch was the lone blot on the spotless product launch record the company has (well, maybe not lone… considering MobileMe)the company hunkered down, fixed key bugs and launched updates. In addition, usage led to the data becoming better (as is the case with any Maps product) as well as doubling down and making key acquisitions (Broadhop, WifiSLAM, Locationary etc.) to deliver public transit info., Wi-Fi based triangulation, better geocoding etc. In doing so, Apple attacked Google from an unexpected direction and took market share and 23M users in the US – something that would have been hard to predict earlier in the year. This is an area to watch in 2014 as mobile becomes more pervasive, in more countries.
8. Leverage Critical Mass To Execute Faster
Speaking of Apple, can Samsung be far behind? Whether it was the phablet launches to round out the various form factors and corner over 63% of the Android market, a quick rush to market of their watch and Smart TV products, Samsung continued its efforts to quickly replicate features that might otherwise cause users to switch platforms. It’s bet on Bada and its own partner ecosystem will be a play to watch in 2014.
9. Segmentation As A Weapon (To Focus)
The auto industry is simple (if not easy) to understand, product-wise – economy, mass-market, luxury. Tesla picked its early adopters (the luxury electric car) and delivered a product that won several loyal fans who have been forced to pick between beauty and sustainability. In doing so, they have found the initial base to monetize key innovations (nationwide charging network, distribution of the cars etc.) before moving to other categories that clearly are clamoring for a version that fits their unique needs and price points. How they move from their core group of early adopters to the every man as the transition from the luxury to economy and mass-market segments will be really interesting to watch.
10. Get Help From Partners
There are a bunch of examples of this – Nokia taking advantage of the Windows Phoneplatform, Kindle Fire taking advantage of Android etc (something Motorola had done earlier too, but not to the extent that Amazon did). Building on top of the core stack that it forked, Amazon attempted to own the web browser – through its Silk product, in addition to the e-commerce services layer. Through this, it is the fastest growing Android tablet licensee of 2013.
Bonus!! Changing The Rules
In pursuing a few different but elegantly connected moon shots, Google has leveraged its core business to try and change the rules. On the infrastructure layer, Project “Loon”and self-driving cars attempt to bring access at various levels. Innovations like Google Glass helps interact with this world. The work on Google Now, Maps etc. offer newer versions of well-known services over existing as well as new infrastructure layers. All of this (even if unsuccessful its its current form) will help the ecosystem solve problems that allow users to live better and more connected / productive lives. 2014 will be interesting to see the impact of many of these efforts, which are, to be clear, in incubation stages for the most part.
Of course, this is only a limited set from the hundreds of plays made this year. Also, note that many of the illustrative examples are in consumer tech, by no means is innovation and key strategic moves restricted to this industry. Please post any plays in other industries in comments. I would love to hear your feedback and thoughts as we go into 2014.
Note: Any opinions are my own, and do not reflect any organization I am affiliated with. If you like what I have to say here, follow me on Twitter at @anandc.