Technology innovation has its limits. In the case of Motorola's Iridium satelite network or personal transporter Segway, the story is bleak.
The satellite phone worked well in the Gobi Desert but couldn’t be used inside buildings or cars. And in the case of Segway, consumers didn’t care about the fact it was an engineering marvel. They didn’t know where to park it, how to take it in a car and whether they could use it on sidewalks or roads.
You shouldn't believe new markets are created automatically when you come up with a breakthrough technology. If your products or services are too far ahead of their time or too complicated, they will not be a commercial success. Segway lacked a complementary ecosystem and that prevented it from creating a new market. Thus no new blue ocean was created, according to an article on the website of the INSEAD business school.
Value innovation: Better get it right
Value innovation is judged in terms of the value buyers obtain, not on the basis of newness itself or some technological breakthrough. So ask yourself the following questions with regard to what you are offering:
- How does it makes life dramatically simpler, more productive or fun for buyers?
- How does it dramatically reduce buyers’ risks (financial, physical or emotional)?
- How does it improve the situation in terms of environmental friendliness and social consciousness of the buyers (inasmuch as buyers value this)?
You should find a clear compelling answer to at least one of these questions. If that box is checked, you should then price your offer in such a way as to make it affordable for your target group.
Book
KIM, W. Chan, MAUBORGNE, Renée: BLUE OCEAN SHIFT – Beyond Competing: Proven Steps to Inspire Confidence and Seize New Growth. Hachette Books (September 2017), 336 pp.
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