Tuesday, April 11, 2006

Exploiting the niche

As I was deleting the ever present comment spam from this blog it struck me that as much as we may dislike comment spam on blogs, or email spam, these are incredible examples of innovation and rapid adoption of a niche. No one knew what email spam was until a few years ago, and now I receive over 100 spam emails a day. Who reads this stuff? Well, enough people to entice folks to build a spamming business which seems to break the law. Just a year or so ago content spam was unknown, now it's a plague to any blogger. This should really be no surprise, these are intelligent, creative, but slightly unscrupulous folks who are innovating in the white space.

What these individuals and others are doing is extending an application or technology from one "known" world or market to a rapidly growing and nascent market. Just as direct mail moved from your mailbox to your email inbox and on to your blog, existing processes and technologies will seek out new niches. I often wonder what would happen if only we could focus these content spammers and virus builders for good rather than evil.

This innovation is very natural and happens in the "real world" as new plants and animals colonize new ecological niches. Businesses want to leverage their existing technologies into new market niches, but the difference between the content spammers and most corporate innovators is that the smaller, faster guys often move into these niches before many larger firms even are aware of the niche. Another challenge is that a larger firm simply can't sponsor one thousand small innovation projects. Each content spammer is his own little business, moving rapidly and in isolation. For a business, there's simply too much overhead, time and money associated with each project, so many opportunities to exploit small market niches are missed.

There's an approach that might work in larger organizations, however. Why not encourage small teams to take existing technologies and target these markets as funded spin-offs? Give them enough backing and enough encouragement and let them act as small, independent entrepreneurs, leveraging existing technologies and knowledge but without all the overhead and bureaucracy. Isn't that in many ways what the content spammers are doing? Targeting a new market niche with existing market technology faster than other people?

Most firms would like to get "faster" in their innovation processes and bring new products and services to market more quickly. This reduces the innovation cycle time and lowers the chance that the product or service arrives at the market as an also-ran. However, in larger firms there are forms to complete, committees to visit, funding documents to approve. Innovation in some firms may be more likely as a series of funded intra/entrepreneurial events rather than a managed process, depending on the types of niches, the speed with which the niche will need to be exploited and the availability of the existing technology.

There's something to be learned from the virus builders and the content spammers. They have capitalized on a market niche and built successful, if slightly unscrupulous businesses by leveraging existing technology in ways that now seem apparent. Their growth, however, gives rise to an entirely new opportunity - how to prevent them from doing what they do!
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posted by Jeffrey Phillips at 1:57 PM

5 Comments:

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