Newton & Product development

Like many engineers that cross over to the business world I find it amazing how the Rules of Physics applies to business. The most obviously applicable to creating new businesses and products are Newton's Three Laws of Motion. Let's examine them:

1. Objects at rest tend to stay at rest. How many times have we seen a company that's making no apparent movement towards innovation say that they'll magically start? Windows Live manager Brian Hall told an investor conference this week "...[Microsoft is] now are focused on how we grow as fast as possible organically." Huh? The web browser was invented fifteen years ago but Microsoft is going to start magically growing organically. This just isn't the way things work, which leads us to Newton's Second Law:

2. The velocity of acceleration is mass times force. That is, the bigger something is, the more force is required to make it move. It's common for companies to underestimate the effort required to "change the needle" -- to launch a new business or product. I've often compared new business development to a three-stage rocket launch. The first stage uses almost all the fuel, is massively risky, and has the highest chance of catastrophic failure. Luckily the whole thing is over in a few minutes. The second stage uses exponentially less fuel, is much less risky, and really just positions the spacecraft for orbit. It lasts longer than the first stage, but typically lasts no more than a few hours. The third stage is orbit: just going around and around. Most companies live in Stage 3; they don't have the risk tolerance or the people to pull off a Stage 1 launch even if they want to, and most secretly don't. People mustn't underestimate the amount of energy required to launch a substantial business. Once we've launched our business we get to Newton's Third Law, which we should have anticipated while planning:

3. For every action there is an equal and opposite reaction. I obviously believe much more in Blue Ocean Strategy -- making competitor's irrelevant -- than Porter's Five Forces, duking it out. But companies should never underestimate the reaction of competitors to a new initiative. Competitors don't like to become irrelevant, and most will do everything they can to prevent it.