Thursday, November 16, 2006

Innovator, Fast Follower or Me Too

I was driving between meetings on Tuesday listening to NPR. There was a story on the new MP-3 player from Microsoft called Zune. The reporter voiced a lot of skepticism - hers and from the industry - about whether or not Microsoft would be successful with the Zune, given it's late arrival and the fact that Apple already controls much of the MP-3 market and mindshare.

What struck me about this is how Microsoft has become a real "me too" player in many spaces, rather than an innovator. In many markets - game controllers and MP-3 players as just a couple of examples - Microsoft is not an innovator, and not really even a fast follower. Of course these physical devices are not Microsoft's strong suit, but they do point the way for Microsoft to control more of our spending away from the traditional PC.

For any firm, there are going to be products and markets where the firm chooses to be an innovator, a fast follower or a "me too" player. These are perfectly valid strategies and should be considered as part of the business strategy. No firm, no matter how smart or strong, can differentiate only on innovation. Frankly, it would wear out the people inside the organization. Google's probably the closest example of a firm focused completely on innovation - but their real goal is dominance in the online ad space. Google will create or acquire anything that provides more opportunity for presenting data (and adds) online.

Every firm must consider its market and competitors and its own products and services and make determinations about which products or services it will position as innovative, and where it may make more sense to be a fast follower. The "me too" plays are often older products or services or areas where the firm believes it needs a presence but recognizes that for now it cannot be a dominant player.

Being the innovator can be rewarding but very tough. Often as an innovator your firm or team will break new ground and needs to expect some big successes along with some not so great failures. Fast followers, on the other hand, will never lead the market but try to quickly adapt to and copy successes in new markets, driving down the cost and adding other choices and options.

What struck me about the Zune is what a "me too" addition to the MP-3 world it really is. There aren't many new or innovative options the Zune offers over existing MP-3 players or the iPod. If you consider that MP-3 players have been around for five or six years, and the iPod phenomenon for over 3 years, this is a late "me too" offering by Microsoft, recognizing that it needs to play in this space and gain a better understanding of the hardware and the services wrapped around the MP-3 player. In this case, this is probably a good but fairly risk averse strategy.

As you examine your business, in which areas or products is your firm "innovative"? In which are you a "fast follower"? Is that strategy by design or accidental?
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posted by Jeffrey Phillips at 7:52 AM

41 Comments:

Blogger Madison Guy said...

Microsoft's wannabe iPod-killer plays Zuny Tunes. The name Zune is just one small part of the problem. The words iPod and iTunes are variations of real words that point to real things. But what's a Zune? What does it point to? Nothing. Plus, it rhymes with all kinds of things Microsoft probably doesn't want to rhyme with, including Apple's dominant and highly successful music marketplace. Not smart. Downright Zuny (sorry). And that's without mentioning screwy MS "points" ordering system or shared songs that evaporate after 3 days or the inability to use the device as a portable hard drive.

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Anonymous Ric said...

Microsoft has never innovated - everything they do is copied or purchased from somewhere else. Microsoft is essentially only in its current position because of a strategic error from IBM around MS-DOS licensing.

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Anonymous acai said...

want to give the list of the companies who are been the Fat followers.
WordStar -> WordPerfect
CP/M -> MS-DOS (classic)
Borland -> Microsoft (in languages, although MS' early focus was on languages)
Netware -> Windows NT (Novell lost focus)
newspapers -> Craigslist, blogs, etc.
Sybase -> MS SQL Server (a huge d'oh moment)
Network TV -> cable/Internet
Sony Walkman -> MP3 players (Sony has a propriety format and DRM fixation)
Motorola -> Nokia and Ericsson (they created the cell phone market)

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