My strong belief is if you are starting new, you are cash flow negative atleast for some time until the product picks up. Does that belief translate into adding a major new feature to existing product? I think it does. You have a product with a steady revenue stream. Now you are adding a major feature which is completely re-inventing your self. I think during the time period when you are re-inventing yourself the revenue will take a dip and it should not be a surprise. I would take Netflix as an example. They had a steady revenue stream. They bet on online subscription and took a dip in their stock price. How long is such dip sustainable before the company goes down? I dont know. But companies do need to re-invent themselves to stay relevant in the evolving market place and take those risks immediately or eventually the market will render those products obsolete.
Tuesday, May 20, 2014
Tuesday, May 13, 2014
Flow through Product Lifecycle
Does organization structure impact innovation? Do I hear a resounding yes !!!
A mid-sized company does not want to deviate too much from their path. They however are faced with obsoleteness and want to invest in emerging markets. So one product line is declining and another product line is emerging. However they believe market growth will automatically bring these emerging market technologies bear fruit. But company has to realize that any emerging, growing market product needs sufficient investment to be able to grow in the rapidly changing scenarios as the market is still emerging. Based on the product lifecycle for new products, a product can cross the chasm and still be in limbo if it stop innovating. I wish there was a lifecycle of failing products to prove what I am trying to say. The product lifecycle by Dr. Geoffrey Moore talks about chasm as the test for the product but even after crossing the chasm if the product loses funding, the product can go back to the chasm phase if it cannot keep up to the technology advances offered by competition. Maybe that is already documented in the technology lifecycle and I have missed but that is definitely an important point to highlight on how a product which obtained early majoring slipped back into the chasm because of lack of catching up to competition.
A mid-sized company does not want to deviate too much from their path. They however are faced with obsoleteness and want to invest in emerging markets. So one product line is declining and another product line is emerging. However they believe market growth will automatically bring these emerging market technologies bear fruit. But company has to realize that any emerging, growing market product needs sufficient investment to be able to grow in the rapidly changing scenarios as the market is still emerging. Based on the product lifecycle for new products, a product can cross the chasm and still be in limbo if it stop innovating. I wish there was a lifecycle of failing products to prove what I am trying to say. The product lifecycle by Dr. Geoffrey Moore talks about chasm as the test for the product but even after crossing the chasm if the product loses funding, the product can go back to the chasm phase if it cannot keep up to the technology advances offered by competition. Maybe that is already documented in the technology lifecycle and I have missed but that is definitely an important point to highlight on how a product which obtained early majoring slipped back into the chasm because of lack of catching up to competition.
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