Innovation as discussed in most tech blogs, popular media or crunched on different websites is about innovation that has been adopted rapidly and at scale.
This Innovation drives public imagination, makes entrepreneurs wettest-wildest dreams, gives tech blogs people and technologies to write about (mostly former), and is a study of various many books, papers and blogs.
Think Uber, Google, DropBox, Tesla, Slack, Twitter, AirBnB and so on.
So how did suddenly the smartest people of a generation decide to chose to focus on a narrow set of skills and then use them to create massive disruption wave carrying the world forward with them
This isn’t the first time — Detroit with automobile boom drove engineering and assembly line to change every industry, Wall street in 70's/80's did this for finance and now last 2 decades Silicon Valley and its mini replicas across the world are doing that with the technology.
This blog is to really understand “What drives this massive adoption ready innovation, how do I decode its ingredients, re-create it if possible, and more importantly look into the future to see early signals of next Innovation or Innovation Hub”
After years of reading, being an entrepreneur myself and talking and analyzing several hundred others from across the world — I decided to flip the problem — rather than studying this from technology or innovators/entrepreneurs point of view — I flipped the problem
“Who were the earliest adopters of these products in their raw, almost imperfect ugly forms and did they have a role to play?”
“Do certain experiences for users make them very receptive to early versions of new technology?”
“How important is having the willing set of users to drive innovation?”
The more I researched and looked at empirical evidences and causation timeline, it became more and more apparent that innovation did not happen because a certain technology suddenly became available, but almost 100% when users were ready for something new and businesses started delivering to this niche before it blew out to be mainstream.
This is best understood with examples rather than long academic narratives.
- Toyota / Honda — In 80's we saw them becoming massive automobile powers leaving the mass producing american brands and many european brands behind. Why did this happen? Firstly, 1970's saw two Oil Crisis made fuel-economy a concern and secondly, cars started being more rapidly being used in more densely populated and poorer parts of Asia. Combine these two and users were ready to experiment with smaller, fuel efficient cars even if the experience was compromised compared to existing cars coming from US and other leading manufacturers.
Users had moved on from the large gas guzzlers — and US Auto companies missed this bus so badly, that today they literally are an oxymoron when used with the word innovation.
- Apple, Microsoft, DEC and the others n 70's/80's enjoyed the same benefit — a set of users ready to experiment with their early prototypes and pay them for it. Why? It was San Francisco / West coast recuperating from the 70's — people were against big corporations — people were experimentative — excited by technology — ready to make/break hardware-software and just curious cases who did not like status quo and wanted new things. These companies had a willing market of experimenters, early consumers helping them pay the bills, create iterations on their technology until they were ready for mass.
Steve Jobs said for the early apple computers “We built this for ourselves, and then realized others wanted it too, so we made some more” It was just a bunch of users who were okay paying for something new coming from 20year old garage techies.
- Just look at the first versions of these brands — today they [Amazon, Facebook, Apple, Google] along with microsoft represent the 5 most valued US tech companies. They all were targeting users very willing to experiment. Amazon went after users who had a corner taste for difficult to find titles on neighborhood bookstores — and hence willing to experiment with someone who promised them something new. Apple went after computer clubs geeks. Facebook was for college students — probably the most innovative cohort of users out there — look at Snapchat, Tinder and other success stories starting from young people in high schools or colleges.
(While same may argue, that these designs may be ahead according to their time — the answer is a big NO. There were better designs in Yahoo, AOL, Myspace and many other services — but users did not care —because these users were ready to experiment)
- iPhone’s greatest achievement was its timing — not the product itself. When a large set of users were ready to experiment — Steve jobs saw the opportunity with 50%+ internet penetration, a large population using Blackberry to partly access internet on phone + HTC and other Asian players had started to experiment with full touch screen internet ready devices — but Asia had poor connectivity, users had not adopted internet en masse and hence not ready to experiment. In the meanwhile, Steve Jobs launched Iphone to the ready to experiment American audience, who were also able to pay creating one of the biggest product successes of our generation.
In this snapshot below — he clearly documents his thought process — “User before technology” i.e. don’t obsess about what technology you have ,but what user experience are users ready for.
- Tesla has a similar story — yes, a great product, great technology and a lot of other things. But very early own the initial founders of Tesla — Martin & Marc — had guessed right. With a lot of rich people want to make an environmental friendly statement who were even willing to drive a prius — there is a small set of “innovator” users who will pay top dollars for a top shelf electric car. Their ability to spot these “innovators” rather than going after the general user — made them think differently and create a product that matches.
What I am suggesting is nothing radically new — but often misunderstood. Below is the adoption curve most marketers or technologists will be familiar with.
The first set are rightly titled “Innovators” and then “Early Adopters”. These first 2.5% “innovators” are really important — they drive innovation — they are the critical mass which allows people to think wildly. They give the confidence for markets to form, for iterations to happen, the innovation to continue down its disruptive path.
So if we start looking at innovation from the lens of one of its most essential ingredients: Users, we can draw some key learnings in running our companies, designing products, defining our target audience and then subsequently making the product/service reach to this audience. It will also help us ignore all the “noise” and look at signals from users and identify future cohort of “innovative users”
Bullet point take-aways
- Any study on Innovation should start with the story of first 2.5% of customers — the “innovators” and “early adopters”. Understanding these people will give a very strong clue on what innovation we are going to see, which will sustain and which won’t.
- If you are truly want to create something new and disruptive in the space your passionate about — track down where the most “innovators” users for your products/service are and start with keeping them in mind.
- Also stating that for certain forms of technology the rate of innovation will be faster in Asia than in the West. Information access, communication, fin tech might be some of them.
- But for other technologies like Electric cars, space, biotech, pharma and IoT — we might see west continue to dominate the innovation curve as “innovators” users with their propensity to consume will outshine other such cohorts.
- To predict or to look into the future — we should not look at which industries or in what skills are people doing most breakthrough work but look at cohorts of consumers and find cohorts which combine the willingness to experiment with new products/services along with the ability to pay for them.
- The most experimentative cohort of users with a reasonable spending capacity live in Tier II or Tier III cities in India/China. Most of them barely get cable television, struggle to get newspapers the same day or in the morning, have less than 10% banking penetration, suffer from severe information black-hole but now half of them have smartphones, internet and enjoying new found wealth (however modest) from past decade of growth. These users will be more experimentative than americans in information sharing, communication, financial services and other necessities being delivered through smartphones, chats or apps. WeChat, MeiPei, PayTM are all steps in that account.
For e.g. an average SF denizen doesn’t need a mobile wallet — he/she has a bank account linked to PayPal, Square, Apple Pay or something thus still storing money with Chase but spending it or sharing it maybe through one of these mediums, but since card acceptance is 95% + — still swiping a lot. But cut to India, customers have broken payment system, poor card acceptance, some archaic banking laws and poor penetration which means online bank of PayTM or mobile wallets becomes more critical — more and more people are willing to transfer a certain amount of cash from Bank to mobile wallet — creating first massive banking systems purely built online. This was the initial vision of Elon Musk with X.com but users in India and similar countries are now ready and that story will unfold here. Mobile wallets are already readying to pay interests on mobile wallets.
Disclaimer: I am not saying that to innovate — innovators don’t need great technology, great people, dexterity, perseverance, imagination etc. but I am saying is one of the most important ingredients of any innovation which we speak about rarely is Users.
I am Rish, Co-founder/CEO of Letsintern. My company is one the world’s largest student-organization platforms. I am a hard working adrenaline loving technology junkie. An Ironman triathlete, certified scuba diver, football enthusiast, an avid traveller, marathon runner who reads, writes and codes in spare time. Follow me on Twitter :www.twitter.com/rish_says or Connect with me on Linkedin: in.linkedin.com/in/profilerish/
