The Wide Lens

High-Level Thoughts

Lots of case studies and historical innovation success/failure walk-throughs. I really enjoyed the "take a step back" message of this book. Personally, I jump into new endeavors without doing enough research, so the strategies provided are already helping eliminate avoidable failure.

Summary Notes

Approximately one out of every four new product development efforts ever reach the stage of commercial launch. And even within this highly screened group, 45 percent fail to meet their profit objectives. (Page 5)

Success in this world requires mastery of ecosystem strategy. (Page 9)

Over the past two decades we have witnessed a systematic shift away from independent success. As customers get bored and competitors catch up, firms are trying to break out of the commodity trap by finding ways to leverage products and services provided by other partners to drive their own success. (Page 16)

We've been taught the consumer is the final arbiter of value. But the consumer is not the only arbiter of value. Often, a host of other partners stand between the innovator and the end consumer, such as suppliers who need to ship components to your factory, the distributors who navigate your product through the retail channel, and the retail outlets where the end consumer finally decides whether or not to purchase your offer. (Page 33)

In assessing the value proposition of every new innovation there are three types of risk:
Execution Risk: the challenges you face in bringing about your innovation to the required specifications, within the required time.
Co-Innovation Risk: The extent to which the successful commercialization of your innovation depends on the successful commercialization of other innovations.
Adoption Chain Risk: The extent to which partners will need to adopt your innovation before end consumers have a chance to assess the full value proposition. (Page 34)

The logic of co-innovation is a logic of multiplication, not averages. The nature of joint probability is that the true likelihood of an event taking place equals the product (not the average) of the underlying probabilities. (Page 47)

Suppose each supplier has a better than eight-in-ten chance of succeeding independently, the chance that they will all jointly succeed at the end of the year is the product of their independent probabilities. In this case, it is 0.85 x 0.85 x 0.85 x 0.85 or 52 percent. (Page 48)

Now suppose that one of these partners is responsible for a particularly challenging development effort and that his probability of success is 20 percent? With just one weak link among the four, the joint probability tumbles to 0.85 x 0.85 x 0.85 x 0.2 or 12 percent. (Page 49)

Opting for a less aggressive timeline may go against the grain, but it gives your slower co-innovators the chance to catch up. (Page 51)

Innovators think about benefits in terms of what their product actually provides - the absolute benefit delivered to the customer. But customers think about benefits in terms of added value - the relative benefit delivered by the product compared to the available alternatives. Each group also has a different understanding of costs: while innovators tend to think of the price they will charge for their innovation as the determinant of customer cost, customers conceive of cost in terms of that price plus all the other changes they need to undertake in order to use the innovation (beyond the initial outlay, the costs of retraining, equipment upgrades, etc.). While innovators tend to focus on delivering an offer whose absolute benefits exceed the purchase price, adoption happens only if the customer sees a clear surplus: that is, the relative benefits must exceed the total cost. (Page 57)

Each and every intermediary that is part of the ecosystem needs to see surplus from adopting the innovation. A single instance of rejection is enough to break the entire chain. (Page 62)

Remember which customer in the adoption chain is important. All of them. (Page 78)

The usual focus on getting products to market creates a dangerous blind spot when it comes to timing entry: the early bird may get the worm, but the second mouse gets the cheese. (Page 140)

If the biggest obstacle is overcoming the execution challenge, getting to market before your rivals can create great advantage. But in a world of dependencies, the benefit of preempting the competition is directly related to your co-innovators' readiness with their offerings. (Page 140)

Success hinges on finding a way to do things differently by asking how we can modify a value blueprint: What can be separated? What can be combined? What can be relocated? What can be added? What can be subtracted? (Page 190)

Building a robust ecosystem is a progression that marries smart timing and smart strategy. Start by identifying your minimum viable ecosystem: what is the smallest configuration of core elements needed for your offering to create unique value? Assess the most advantageous order in which to add elements to expand the ecosystem: what element offers the best balance of enhancing the preexisting systems and acting as a building block for subsequent expansion? Finally, consider what constellation within the current ecosystem can be carried over to help establish an MVE for a new value proposition and a new ecosystem. (Page 222)

At the heart of this book is a simple suggestion: before diving too deeply into a new initiative, make sure you understand the ecosystem into which you will need to integrate for your efforts to even have a chance of success. (Page 228)