It's a New Blog, and I'm Feeling Good!

Dragonfly out in the sun you know what I mean, don't you know
Butterflies all havin' fun you know what I mean
Sleep in peace when the day is done, that's what I mean
And this old world is a new world
And a bold world
For me

Made one small adjustment to my blog which will have a big impact -- new name! Changing from "Accelerated Disruption" to "Billy Leonard's Blog". The impetus being that I did not want to be restricted to only writing about disruption. In addition, this allows me to write shorter entries more often as I share whatever random -- but hopefully interesting -- things pop into my head.

This concept of a small adjustment having a big impact is one of my favorite in life and business.

Too often people focus on the 4th or 5th domino in a row of five, instead of focusing on the first. The focus, the excitement is often on knocking the ball out of the park instead of drawing a walk, then stealing second, a single gets me to third, and then a sacrifice fly drives me home. Take my Atlanta Braves, for example. They are currently 7th in the league (out of 30) in home runs, but 15th in the league in runs scored. Why? Because they are 25th in the league in "on base percentage".

The focus has to always be on the first domino until you perfect it. The details will always be key. You cannot sustain growth, excellence or profitability without a relentless focus on the little things that drive your life and business every day. The little things have big impact -- for better or for worse. Relentlessly focus on getting on base every day. If you do, then you'll win the game no matter what game you are playing.

Please leave your comments. I'd love to hear from people out here in blogger land!

AOL --> Hotmail --> Gmail = A Monetization Evolution

Want to disrupt your market? Sit down with your team around your monetization model and ask:

1. How could this product/service be free?

2. Who else could be paying for this instead of our customers?

3. Is our monetization model getting in the way of the product experience?

In 1989, AOL introduced the phrase "You've Got Mail!" to the world. In 1996, Hotmail came on the scene as one of the first web-based email services. Since it wasn't an ISP-based email service, users could access their email anywhere in the world and no longer felt as locked-in to their ISP, and best of all it was free! But there was a catch, it was only free to a certain level of storage space. Then Gmail (the crowd goes wild!) stepped in the room like the big gorilla it would become. Unlimited storage? Is that even possible? Would the "Over XYZ.ABC megabytes (and counting) of free storage." counter really be able to increase in perpetuity? Apparently, yes. I have 7595.2867 megabytes of free storage available as of this writing.

Could AOL or Hotmail be Gmail right now? Sure. (Note: according to comScore, Hotmail has more users than Gmail, but at one point everyone used Hotmail -- my guess is there are more active Gmail users even if there are more Hotmail accounts.) Note aside, Gmail disrupted Hotmail's market, just like Hotmail disrupted AOL's.

Gmail accomplished disruption for at least four reasons:

1. Hotmail and then Gmail provided customers with products they wanted. AOL knew what customers wanted, but my guess is that they were scared to let go of control. ISPs were popping up everywhere, but the consumer wouldn't give up his precious email address, would he? He will if he can access the email anywhere for free. He will if storage space is unlimited.

2. Gmail, in particular, innovated to the point that they no longer viewed the email product as the revenue driver. AOL viewed email as its key to keeping its stranglehold on on its revenue-driving service (but this type of view never works in a free market, or really in any successful market). Hotmail almost moved away from the focus on email as the revenue driver, but just couldn't bring itself to take that last step -- unlimited space. Gmail introduced AdWords to the email experience, thus figuring out how to leverage all this valuable personal data to monetize the experience in such a way that users didn't have to pay for it.

3. Gmail figured out how to get corporations to pay for individuals' email. As you read your emails you will (hopefully) click on the ads that (hopefully) relate to the things that you are interested in at that moment. Example: You are reading about the fact your friend just became an RN? Maybe you too would like to go to school to become an RN! Click on (this) ad to learn more!

4. Gmail didn't allow monetization to get in the way of user satisfaction. This is the biggest key. When your monetization model starts to create pain points, then you are ripe to be disrupted. (We need to make up t-shirts: "I'm about to DISRUPT YOU.") When your monetization model directly impacts the quality of the product experience, then you better sacrifice the monetization model because if you don't then you won't have a product to monetize.

When looking to disrupt (or to not be disrupted), the monetization model is a good place to start:

1. Could your current major revenue driver be offered free? Woah. Something to chew on.

2. Could you find someone (other than you or your customers) to pay for the products your customers use?

3. Is your monetization model getting in the way of the product experience? If so, watch out...disruption is coming!

Don't Fix Your Customers' Problems Too Quickly!

My sister and I enjoyed "mining for gold" every summer when we went with our grandmother to Highlands, NC. We scooped out a sizable amount of dirt, put it in our sifting pan, and carefully sifted through searching for tiny flakes of gold. When your customers complain, when problems are presented to you, then you have an opportunity to not simply improve but, more so, to sift through and find an idea for a disruptive product/service.

When customers' have problems there are three levels of reaction:

Level One: Quickly and professionally listen to the customer and solve his problem

Level Two: Level One done, learn from the experience -- identify areas of opportunity and make improvements

Level Three: Level One and Two done, dig deeper. Fly out to the customers' factory, fly her out to you, go to the retail store, you and the team meet her for lunch, crawl inside his head and never stop asking "Why?"

The Best Question, Ever!

Do this today: find a colleague, buy her lunch, and ask her "Why?" the product/service you offer is valuable. Then ask her "Why?" 10 more times. You might end up at the core pain point that launched the idea for your service/product; or you might learn her perspective on the core pain point; or you might invent a new disruptive product!

Do this sometime soon: the same exercise above with a customer instead of a colleague.

"You know my methods, Watson."

In order to mine our customers' problems for disruptive ideas we have to act like Sherlock Holmes, implementing every investigative method we know to reach into the core of the matter.

My iPhone USB Cable is Broken

It's been chewed up and spit out and booed off stage; I need a new cable. I walk into the Apple Store to buy one. I go to the counter to purchase it. No one asks me "Why?" I need a new cable. If they did, I would say: "My old one is torn." Then someone should ask me "Why?" again. I'd say: "Because I was using it in my car and pulled/twisted it often." Then someone should ask me "Why?" once more. I'd say: "Because I move my iPhone all over the place when I'm in my car (to my left ear, to my right ear, on the seat next to me, in the console between seats, to my friend sitting next to me, to his ear, etc.); and when I'm in my car, my iPhone is always plugged in."

Maybe I should buy a "coiled cable" for my car. Or maybe Apple should figure out how to charge my iPhone wirelessly while I am using the phone in my car. "Wireless" charging already exists to a degree -- you can place your phone on a pad, but I want it to charge while I'm using it! (How has the pad solved my core issue? It hasn't and that's why it wasn't a disruptive product when introduced in 2009.)

Read this article: http://www.fonehome.co.uk/2011/04/27/iphone-5-battery-wireless-charging/

Apple is looking into wireless charging, but the focus at this time appears to be on placing the phone onto a pad. This does not solve my core problem; this is not significantly disruptive. But what gets me really excited is what I read at the end of the article: solar-based charging! So I never have to plug in at night? I don't have to plug in when I get in the car? I don't need cables ever again?!

You just disrupted my world, Apple, and I'm going to pay you money for it.

Don't Fix Your Customers' Problems Too Quickly

Quick response to customer issues is highly important, of course. But don't "fix" the problem so quickly that you miss the disruptive idea. Become your company's/industry's greatest detective; there is gold at the heart of every customer issue.

Individual Collaboration = The Key to Disruptive Design

Companies that engage in "individual collaboration" are the disruption leaders.

Apple + AT&T

Apple designed the iPhone in collaboration with AT&T, but did not use a "design by committee" approach. The design of the phone belonged completely to Apple. The two partners focused on what each does best in order to create a single product/service for the consumer.

Google + Ford

Google and Ford are collaborating to produce a potentially disruptive product. A key to success will be that each partner must allow the other to "own" his/her piece = individual collaboration. Partners must be careful to not get in the way of disruption. Read more about the project here: http://www.foxnews.com/leisure/2011/05/13/ford-google-team-develop-psychic-cars/

iPhone + Wallet + Keys

As mentioned in my previous post, I carry too much in my pockets. I just want to carry one thing: an iPhone that will also unlock/start my car and that will serve as a credit card. Apple, Ford, Visa and some smaller, specialized vendors (example: Firethorn) could collaborate on this project. Their success would, in part, depend upon how well each partner allows the others to fully "own" design decisions around his/her piece = individual collaboration.

Individual + Collaboration -- Let's Break It Down

Collaboration is key to disruptive design because leading organizations are expert specialists. The best organizations do one thing better than anyone. (Note: I didn't say the best organizations only produce one product. At the core of all their products is an organization's core value, differentiator, speciality -- whatever you want to call it.) In order to develop disruptive products -- products that reach far enough beyond anything the market currently offers -- companies must innovate/design beyond their own capabilities. A Google/Ford collaboration brings together two disruption leaders with two core specialities that, when combined, could lead to an entirely new disruptive product.

Individual is key to disruptive design because leading organizations are expert specialists. It's key that organizations come together, but it is just as key that they set parameters/structure around their collaboration. If one of the partners dominates design then the collaboration is not able to realize its full value-creation potential. Each partner must fully own his/her piece and be given the freedom (encouraged, even!) to drive disruptive design.

Why does this often not happen? Two reasons...

1. There is almost always a more dominant partner

2. The partners that are collaborating are more focused on deadlines and producing a product than they are on allowing the space and time to get it right. For example, consider the Apple + Ford + Visa collaboration suggested above: Let's say that Apple designs something highly disruptive/innovative but Visa reviews it and determines that functionally it will not fit with Visa's piece of the puzzle. Visa asks Apple to make adjustments in order to get the team to a market-ready product. The product might be ready to go to market, but it has possibly lost a key element of its disruptive design -- and it was for disruption that the three companies began working together (not simply to produce another product)!

What Does This Mean for Your Organization?

1. As we often talk about, first know who you are. What is your core speciality?

2. Identify a partner or two whose core specialities could compliment yours.

3. Schedule brainstorming sessions once per quarter (or month!) with them. Make it fun. Bring in food. Spend the day thinking disruptive thoughts!

4. When one of those sessions leads to a wonderfully disruptive idea, individually collaborate!

How Should You React to Disruption? Pause, Listen, Know Who You Are, and Innovate Beyond!

Two ways your organization might be hit by disruption:

1. A competitor introduces a disruptive product
2. Macro forces create a disruptive environment

When either of these occur, the wrong thing to do is to allow it to disrupt what you are doing! Will you need to respond? Probably. But most companies' response is:

- Too quick
- Void of market validation
- Non-disruptive

When a competitor introduces a disruptive product, do these three things:

1. Pause and listen -- take a breath, it's going to be OK. Listen to what end-users are saying about the competitor's disruptive product. Learn.

2. Reevaluate who you are -- this is key because the disruptive product will cause you to question your identity as an organization. You must decide (big decision-making time!) if you believe in who you are or if your core message/mission must change.

3. Based on who you are, innovate beyond the competitor's disruptive product. There will always be another disruptive product; it will be yours if you innovate beyond.

What If I Only Have One Pocket?!

Apple owns the touch screen market. For various reasons, Apple decided to go bigger rather than smaller after the iPhone to the iPad. Guess what? Now the consumer carries an iPhone, iPad, set of car keys and a wallet wherever he/she goes. I don't want to carry all these things around -- I want one device that is my iPhone, car keys and wallet all in one. Invent that and people will buy it. That's innovating beyond.

When macro forces create a disruptive environment do these three things:

1. Pause and listen. What do the new government regulations, economic policies, shifting demographics mean for your organization? You can't win the game if you don't understand the rules better than anyone. And please, please do not try to play the game before fully understanding the rules.

2. Communicate with the infantry. When major macro forces hit an industry, often companies will think that the generals will determine whether or not the company will successfully navigate through the disruptive environment. Not true. The "boots on the ground" will determine your future. Help them understand the macro forces and -- this is KEY -- ask the infantry what they think about these forces: how should the company respond? Given the new rules, what is the best play?

3. Don't overreact. Did the macro forces change your customer? Did the forces change the customer pain points? Has the competitive landscape significantly changed? There is a good chance that you don't need to change who you are and do not need to significantly change what you do -- assuming you were successful before the disruptive macro forces hit. Overreaction could mean that you go from market leader to scrambling to figure out how you got so far off track and fell behind your competition. Don't allow the macro forces to cause you to lose your identity.

Ford's Reaction to Disruptive Macro Forces

Ford faced some disruptive macro forces in recent years. It appears to me that they paused and listened. I wouldn't be surprised if the generals spent a lot of time communicating with the infantry. And, most importantly, they did not overreact. Ford knew who they were and with impressive resolution Ford determined to build a cutting-edge brand that could compete with Honda and Toyota. Go to www.ford.com and you will see the front page is all about Ford's three cars that get 40MPG.

Disruption will happen. If you aren't the one causing it, then you must be prepared to appropriately respond to it. Pause, listen, know who you are, and innovate beyond.

You say "Ubiquity", I say "Opportunity" -- Baking Cakes and Discussing Algorithms with My 6-Year-Old

It is no longer: "He/she who has the data has the power."
Instead, it is: "He/she who synthesizes the data has the power."

In a world in which data/information is ubiquitous, the company that can...

1. Identify the important data
2. Synthesize it across a number (think: 10,000) of layers

...will redefine customer norms/expectations in your industry.

One thing we can be certain of: ubiquity will grow in perpetuity. If everyone has access to everything, then how can a company distinguish itself? How can a company add value if there is seemlingly nothing to add?

Bake Me a Cake as Fast as You Can

People made good cakes during the first half of the 20th century.

People made better cakes during the second half of the 20th century.

Why? Trader Joes, Whole Foods, Costco, and Kroger. Ubiquity = opportunity! But only for those who know how to...

1. Identify
2. Synthesize

...the best blend of the tens of thousands of available ingredients.

"Dad, what's an algorithm?"

Be worried if your 6-year-old is not asking you this. She needs to get on the ball and in the game! Truth be told, my 6-year-old hasn't asked me this question -- yet. But she does love using algorithms. Her favorite is Google's, mainly because she loves searching for the "best ice cream _______" with the underscore being whichever city we happen to be living in or visiting at the time.

What is Google? What is the product? No, it is not the algorithm, just like Coca-Cola's product is not sugar water in a can. Google's product is a service -- it helps you find the information you want/need as quickly as possible. Google's future/power lies in its ability to place a bit in the mouth of ubiquitous information and steer it. Google's product is simplicity -- it's an Advil to cure the throbbing headache of a ubiquitous world.

Conclusion

If you want to develop a disruptive product:

1. Collect a ton of information (Trader Joes, Whole Foods, Costco & Kroger)
2. Identify the information that matters (Pull ingredients off the shelf)
3. Synthesize the information (Experiment -- 2 teaspoons of this, 1 cup of that)

You just baked a cake that will change your world, dominate your industry, and leave your customers hungry for more.

Proactive vs. Reactive -- Server Farms & Mosquito Bites & Vacuum Cleaners, oh my!

If you want to create a disruptive product then choose any "reactive" product in your industry and develop a "proactive" product that makes the "reactive" product unnecessary.

"Reactive" products are often developed when an "idea guy/gal" (call him/her: IG) identifies a pain point. Once the pain point is identified, the IG develops a product or service to take away the pain. Think of this like you would think of a chemist who develops a drug in order to cure a disease or ease an ache. Can you think of a few products or services that are "reaction" oriented -- they serve the purpose of eliminating a pain when the pain arises?

SERVER FARMS

Server farms --> the solution to the pain many enterprises experience when they don't have enough space to store their electronic information on their own machines AND/OR when they need the information stored in "the cloud" so it can be accessed anywhere.

Server farms truly are a "reactive" solution to this pain point because they don't prevent the pain, they just act as a solution when the pain occurs. A product that would prevent ("proactive") the pain would be something that would prevent the small/medium enterprise from ever needing to outsource their "clouding" needs. When someone invents a way to store LARGE amounts of data on a small chip or machine that could fit in any office AND that machine has wireless capability THEN that person will be stealing business from companies like Rackspace and Amazon (among others).

Companies are often slow to prevent (be "proactive") the pain because they make so much money off of solving (being "reactive") the pain. For them, it truly is a matter of "no pain, no gain". But if you can prevent the pain all together, then the gain will be yours!

MOSQUITO BITES

Mosquito bites? Yes, our only real solution to mosquito bites is calamine lotion. (I haven't found a great repellent, have you? And even if you have, who wants to spray it on every time you go out?) What if someone invented an annual shot (like the flu shot) that either repelled mosquitos OR when bit, the chemical would immediately neutralize the impact of the bite? Crazier things have been invented! And I think this "proactive" product would be a great seller if anyone could ever put it together to bring it to market.

VACUUM CLEANER

What do you do when your carpet gets dirty? You lug out the Dyson, move the toys/kids/furniture out of the way, and you clean! It's a "reactive" product. Pain arises and the Dyson is there to soothe your pain...for a while, at least, until the carpet gets dirty again. What's the solution? Create a "proactive" product! Create self-cleaning carpet. Crazy idea? Maybe, but it's the start of a disruptive idea. It's a brainstorm off which disruption can be built.

CONCLUSION

Disruptive products aren't just the next step up in terms of quality or customer service. Disruptive products don't simply do a better job of solving a "pain in the pocket". Disruptive products prevent the pain from ever happening.

What industry are you in? What are the pain points that businesses or consumers feel in your industry? What current products or services "respond" to these pain points? Find a way to "prevent" the pain points from occurring and you will have a disruptive product/service, and it will likely make you a lot of money!