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January 09, 2007

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» Don Dodge: Big companies can innovate, too! from The Business Innovation Insider
On the Next Big Thing blog, Microsoft's Don Dodge explains how big companies can innovate. Innovation doesn't happen unless an organization radically re-thinks both its engineering and sales operations. As Don points out, the IBM PC, the Apple Mac, and... [Read More]

Comments

Matt

Generally speaking, your post makes some good points. However, to claim that the Apple III was "Apple's main revenue source" and that the Mac was a "replacement for the Apple III" is simply ludicrous. The Apple III was actually the "replacement" for the Apple II, but was perhaps Apple Computer's first colossal blunder - as sales were terrible and the product itself was bug-ridden and unstable.

Lucas McDonnell

Guy Kawasaki talked a bit about this a few days ago (http://blog.guykawasaki.com/2006/01/the_art_of_intr.html). He also refers specifically to the Apple II, in the "kill your cash cow" part of the post.

Most often I think these 'disruptive/innovative products' fail before they get out of the gate because most people are not willing to stick with an idea that they're unsure will succeed. Most organizations are driven by the passionate, innovative people, the rest will follow the crowd.

Don Dodge

Help me out with Apple history. I wasn't paying attention to Apple in those days.

The Apple II was the big revenue producer. Did Apple simultaneously develop the Mac and the Apple III? Certainly the Apple III replaced the Apple II, but when did Mac come on the scene? And when did the Lisa happen? Was Lisa a precursor to the Mac? And then there was the Newton in there somewhere too. Can someone lay out the chronology?

Apple took some tremendous risks and were willing to kill their own cash cows. They had some failures but ultimately succeeded. My point was that they set up a seperate group to develop new disruptive products that threatened their existing cash cows. pretty impressive!

Brian P Halligan

Hi Don,

I agree with your comments relative to having to create a separate salesforce within a large company to make these work.

I agree with the "incentives" arguement you make on this point. In addition to that, the skills associated with selling a buggy, new technology to "early adopter" potential customers are much different than the skilss associated with selling a stable technology to early majority customers.

Ironically, in many of these early adopter, new technology situations, the potential cusotmers find you. If they encounter the wrong (in their mind) "type" of sales person who qualifies hard up front, they will be repelled. In the case of Groove, the Darpa (Poindexter), HP (C Samuel), and GSK (F Calhoun) basically found us...

Brian.

Don Dodge

Good point Brian. Like many things in life people self select. They gravitate towards situations that interest them.

Early adopter customers are a unique breed, just like start-up people. That gravitate towards each other. they want to be the leading edge early adopter leaders.

Startup sales people sell a vision...not so much a product. Early adopters buy the vision, and know that the first release of a product is just one step along the path to that vision.

Maybe the problems come when there is a mismatch of expectations and vision between the seller and buyer.

Lloyd Budd

Terms that come to mind immediately to me about the challenges are: expectations and jealousy.

Expectations: how to measure the costs and gains. Most true prototyping results in no tangibles, only experience -- VCs gamble on the huge gains of the few hits among the many misses. Giving what you write about how a large organization is well positioned to be a fast follower, it sounds like it would be a hard sell.

Jealousy: the tension between the Apple Lisa and Apple Mac teams is legendary. Competition. In my own experience at IBM, I witnessed tension between business units. When different teams were competitively working in the same verticals or one team tuned up another's product, it could be nasty.

It is 20% time for someone. For the organizations top leadership, they have to champion both the 80% of the "comfortable" business and the 20% "risky" business.

--

Wikipedia is our friend.
http://en.wikipedia.org/wiki/Apple_Inc. suggests Apple III was released in 1980. It was the Lisa and Mac projects that Apple developed concurrently in the mid-80s.

Brant Sears

I'd hardly call the XBox "disruptive" and it is certainly not in the same league as the Mac or IBM PC. The damn thing has been on the market for several years now and has yet to make a profit. It came in a distant second in the last generation of consoles (basically tied with Game Cube) and this time around it looks like it is about to be upstaged by the Wii.

The whole point behind the XBox is to get game programmers programming with DirectX instead of OpenGL because by doing this, they help create lock in to the Windows platform - and its not even a strategy that is succeeding.

DAR

Java is another good example of a successful skunk works project launched by a large company.

mac pc

I agree with your comments relative to having to create a separate sales force within a large company to make these work.

Christine

100 million Playstation 2's in the market would suggest that XBOX was neither innovative nor disruptive. So would the cumulative $16B that Microsoft has lost on it.

12 million highly profitable Nintendo Wii's and 100 million ipods on the other hand is an entirely different story.

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