Friday, May 12, 2006

Innovate or Die - Focus

Focus on distinctive innovation
Sybase has (to me) a dizzying array of products, and it seems like every time I turn around they're announcing some new product. Drill down through the the "Products and Solutions" section of their web site and you'll find 23 different products listed under "Information Management". Click on "Development and Integration" and you'll find 15. There's another 13 under the "Mobile and Wireless Applications" section. That's not 50+ products total, there's some duplication across the categories, but it is a lot of products. What it implies to me though, is that Sybase is trying to be "all things to all people" rather than focusing on specific areas in which they can distinguish themselves. Geoffrey Moore notes:

Our work in innovation makes clear that unless companies differentiate beyond the norms of the competitive set in which they participate, they cannot get paid a differential return. They simply lack the bargaining power to gain it. Too many other offers are “good enough,” and the customer can play vendors off one against the other to get a bargain price.

The goal of vendors, therefore, should be to create such a separation from their competitive set that customers will not be willing to substitute another offer for theirs. This is a non-trivial undertaking, particularly because competitors are quick to copy any innovation that appears to be leaving them behind. The only way to well and truly leave your competition behind is to go where they are either unable or unwilling to go. That is what our innovation strategy models are all about.


In this context, one thing stands out: Being best-in-class should never be the goal! Here’s why. If you are talking about your differentiation zone, then you want to escape the class altogether—be out of class! And if you are not in your differentiation zone, then you do not need or want to be best in class, just good enough to meet market standards. Any further efforts are a waste of resources that could be better used on further differentiating yourself on your primary vector.

People originally adopted PowerBuilder because the DataWindow did something that no other control on the market even came close to. People will only be attracted to PowerBuilder or remain loyal to it only if it continues to offer features that are unrivaled. As discussed above, PowerBuilder is losing that edge. Incremental innovations to the product will only slow the rate of defection; it will not win new clients or halt the loss of current ones.

Kathy Sierra argues against incremental improvements and for true innovations:

If you're competing for market share, with products or services that are hard to differentiate, incremental improvements might be a waste of time and resources!

So, how does Sybase determine what new features would make PowerBuilder an "out of class" product rather than "best in class"? We'll start covering that in the next post on Users.