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.

Blue Ocean Strategy: Seeing through the clutter

As the original Clinton campaign would have put it, "it's the six-path framework, stupid." Seriously ... a lot of people ask how to actually use Blue Ocean Strategy to make a new business. I've written a longer post that goes into each specific step, but realized that I skipped an executive summary that may be even more important.

Summarizing the 240 page academic book into one sentence: use the six-path framework to find the key factors of a business through the lens of customers and non-customers, then use the four actions framework to redefine the market boundaries of that business while adhering to tipping-point leadership and fair process to increase the chances your organization will be able to execute your new business. OK ... it was a run-on sentence, and it greatly oversimplifies. Still, it's a start.

As a product/business developer I'll take things a step farther. Listen to the Harry Chapin song "Six String Orchestra" where a young man dreams of being a great singer. In reality, he can't play his instrument and receives nothing but negative feedback from everybody around him. But in his mind, he hears the beautiful songs of the future, knowing that he'll have to do the hard work, practice a lot, and find the right people to make music with.

Product and business development is like that. I once had an early version of a product that went on to do great generously described as a "mud hut" by a seasoned software developer. He wasn't being negative: just saying that he understood my vision but that a lot of work is needed to turn that vision into reality.

Some people will disparage or sabotage your ideas out of petty jealousy, or because they fear their livelihood or relevance will be threatened either by the business you create, or the fact you (and not they) created it. But I've found many aren't acting in bad faith: they just don't understand where you're going and don't have the brainpower to see the end of the path.

Blue Ocean Strategy helps you not only figure out where that path should lead to, but gives us a series of powerful tools that help communicate that to others. Blue Ocean Strategy provides a roadmap, but isn't magic: you, the product and business developer have to figure out where that road is leading to and push your organization down that path.

The six-path framework is how you, the person trying to redefine a business or industry, find those key factors that are vital to the success of your business: it's the music you hear in your head, that you know you're capable of.

In the search for key factors, it's not uncommon to quickly jot down a list of factors: don't do this. Remember the old software engineering term GIGO: Garbage In, Garbage Out. The process of identifying and isolating key factors should be long and painstaking: there's nothing easy about it. You should really be uncomfortable with the key factors you eliminate and reduce. Making things worse, the longer you've been in the industry the more difficult the process will be, because you'll be steeped in the standard boundaries by which companies are already competing.

But if you use the six-path framework to find those key factors, then apply the four actions framework against them, you'll find that music you knew was there will come alive in real life. You'll invent a Wii, create the Prius, or launch the next Google. But never underestimate the amount of raw effort that went into each of these individual efforts, or that must go into yours if it has a chance of succeeding.