Everything evolves and nothing stands still. Things will change whether you want it or not, and changes bring opportunities.
Research is expensive, especially the research around the Genesis stuff. Just look at IBM Watson. It was a big bet of IBM, in which IBM has been pouring money since 2004. Watson competed in Jeopardy in 2013, and then was adapted to help in many different situations, none of which really took off. That’s the nature of Genesis phase. You research things (if you can afford it) because you hope that will be the source of value in the future. But since Genesis is unpredictable, your returns can never be expected with certainty.
More, in certain situations (see Figure 1), many new inventions can appear. IBM Watson was a result of serious IBM investment, but when a component is industrialised and it becomes easily accessible to many people, those people will use it for various purposes, and will create new things with it. You can’t do all of that research by yourself.
Figure 1: industrialisation of a component causes many new inventions to appear. Which of them will be successful?
The only option for you is to skip doing research and observe who is successful in the market, then quickly copy or acquire those solutions.
The financial benefit comes with a specific risk - you can be sure that others will be hunting for ideas in the same way as you do, and, what is more, you may find some IP rights and other constraints that will make your life difficult.
The boom of innovations on Figure 1 is enabled by the increased efficiency of the component that goes from Product to Commodity. The experimentation and potential success of any of new offerings built on the top of the component drives component usage up, and this process is rather fast, since the market for the Product was earlier well developed. Almost everyone wants to use the most efficient version of it.
For this reason, you cannot wait for somebody to figure out how to do the transition from Product to Commodity. Per @simonduckwardley words, such a transition takes 8 to 10 years to cascade through the market, so if you observe someone doing it (which implies 2 years of market research) and spend 2 years on figuring out how to do the same transition, you have already lost.
You have to be the first, but there are some conditions that have to be met:
- customers have to be convinced that current offering brings quickly diminishing differentiating value. If everyone is using it, than the status quo is achieved again.
- customers must be there, and must know what the offering brings.
- there must be a way of building the Commodity version of current Product
The press release process is a very good way of verification if those conditions are met.
Press Release Process
Personally, I would not call it a strategic play. It is just a small tool, which requires you to do two things:
- write a press release for your hypothetical problem
- verify it make sense.
The point is that if you can write it and it does make sense, then the market is well developed and ready for the transition to the Commodity space. However, if writing a press release is difficult, and it cannot be understood by the wider audience, then there is too much uncertainty, and the market and you are not ready for the change. You have to wait.
Combining Fast follower, First mover and the Press Release Process leads to the ILC play.