Disruptive Technology: Smaller Companies Have the Edge
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Bare bones. Light weight-three buttons only. Affordable-$120 versus $340 industry average. Shy - there's a word to describe a new product. Sales in the first year of one million units versus six million for the whole camcorder industry (Jana). What's the product? Pure Digital's Flip camcorder.
Disruptive technology? Yes. Why? There's a question.
- Sony owns the business. They invented light weight as in the first Walkman. They just forgot that people weren't interested in a new feature. They were interested in a simple camcorder that would take simple movies that could be simply shown on the Internet.
- The Flip isn't as good. The paint is cheaper. The lens probably isn't as good. Nobody cares. They probably don't notice, as most of the video shot with the Flip is ending up on low-res outputs like a laptop.
- Sony takes it's time, relatively. Innovation is progressing more rapidly at Pure Digital. They were able to ship a million units in the first year with no trouble - and not troubles, as well. Pure Digital started in the throw-away-camera business. Simple things that got thrown away quickly. Their customers said they wanted a throw-away camcorder. It ended up being not quite throw-away, but close. New products are coming out quickly.
- The Flip is so simple, you can't up-grade it. No additional memory sticks to worry about.
- It's low tech as the Flip works on regular batteries. No bricks or cords.
- No cords to down-load the movie. The USB "flips" out at the press of a button, thus the name. Nothing to lose. Nothing to go find when you're ready to see your production.
- The Flip software actually isn't cutting edge at all. It's not perfect. It's just good enough to do the job. Most people are satisfied with what they get for the price they paid.
Evidence of disruptive technology:
- Simple
- Cheap
- Faster to market with new up-grades
- Maybe not quite as good as what out there, but useful.
- One or two unique features that pique folks interest, probably based on very good design elements.
Oprah raved about it on her show. Rosie O'Donnel likes it as well (Jana). Think simple for your next new product.
References
Christensen, Clayton M. The Innovator's Dilemma. When New Technologies Cause Great Firms to Fail. Harvard Business School Press. 1997.
Christensen, Clayton M. and Michael E. Raynor. The Innovator's Solution. Creating and Sustaining Successful Growth. Harvard Business School Press. 2004.
Jana, Reena. incase: How the Flip - a bare-bones digital camcorder-grew from a simple idea to a contender among giants like Sony. BusinessWeek. 28 April 2008. 76. http://www.businessweek.com/magazine/content/08_17/b4081076893508.htm