Five tips to turn startup toys into essential tools
The next big thing will start out looking like a toy
In 1984, I bought a Personal Digital Assistant. My Psion Organiser was named Percy (my personality, according to my girlfriend). Percy looked like a small, grey, plastic brick with a small screen and keyboard, revealed by sliding off his case. I spent an enjoyable few days transcribing contact details from my paper diary into Percy. Unfortunately, I dropped Percy on his head, his battery dislodged and he forgot all the contact details. So, I had to enter them all again. I showed Percy off to my colleagues and told them about his temporary amnesia. A few days later, I was walking towards a colleague when he dropped his paper diary. In a panic, he scrambled to picked it up then inspected the part where he stored contact details. Phew, he said, My contacts are still there. Then walked on wearing a gleeful smile.
Forty years later, I can see how Percy appeared like a toy to my workmates. However, Percy successfully passed on his genes to my current iPhone.
Why disruptive technologies get dismissed
The very decision-making and resource-allocation processes that are key to the success of established companies are the very processes that reject disruptive technologies. - Clayton Christensen
Disruptive technologies often seem weak, limited or niche when they first emerge. I worked for IBM when they and other mainframe computer manufacturers thought PCs were underpowered gadgets. Other examples include Skype, digital photography and EVs. Incumbents underestimate the speed of technological improvement, driven by network effects, falling costs and better infrastructure.
How toys become essential tools
Innovation is the ability to see change as an opportunity, not a threat. - Steve Jobs
Not every toy becomes a success, but those that do evolve rapidly. Successful disruptive technologies leverage external and internal forces to close the gap between their initial limitations and user needs. External forces relate to advances in complementary technologies such as cheaper microchips and growing internet bandwidth. Well designed products improve continuously, e.g. Wikipedia relied on user contributions to grow stronger with time. This iterative improvement transforms disruptive technologies from toys to essential tools.
Tips for startups
If you are not embarrassed by the first version of your product, you’ve launched too late. - Reid Hoffman
To optimise their chance of success with disruptive technologies, startups should address underserved markets, leverage trends, embrace iteration and be patient. Founders should:
Think long-term. Design products with a focus on how they’ll improve over time, leveraging external advancements.
Focus on process. Build products that get better with use, e.g. social apps, driven by user interactions.
Ignore dismissers. Dismissal by incumbents might indicate you’re onto something disruptive.
Understand the difference between sustaining technologies and disruptive technologies. Sustaining technologies are useful from day one but are often quickly acquired or copied by larger players. Disruptive technologies start small and evolve to reshape industries, despite initially appearing insignificant.
Design for scalability. Align products with trends that allow rapid scaling, e.g. cloud computing reducing infrastructure costs.
Other resources
Principles of Innovation and Measuring Success talk by Clayton Christensen
Profits by Product Version 3 post by Phil Martin
Four Steps to Product Market Fit post by Phil Martin
The top companies of 2030 will likely be startups that, today, look like toys. Starting small and dismissed by incumbents, they will climb the utility curve until they’re impossible to ignore.
Have fun.
Phil…
