Timing and New Product/Service Introduction

Bill Gross is a Silicon Valley entrepreneur (GNP Loudspeaker, Knowledge Adventure) and founder of the business incubator Idealab. He gave an excellent TED talk in March 2015 entitled, “The single biggest reason why startups succeed.” By objectively examining a total of 200 successful and unsuccessful start-ups on five factors: the idea, the team, the business model, the funding and the (market) timing. He concludes that the primarily determinant of success, contributing 42% of the difference between success and failure, was timing.

So what does “timing” in this context mean?

He was not referring to efforts to predict the future direction of the market using technical indicators or economic data, nor was he referring to the tactical microeconomic strategies involving competitive first mover or second mover advantage, product cannibalization, seasonal or geographic timing, or new versions/releases incorporating incremental improvements.

The timing that Bill Gross is describing concerns consumer behaviour (psychological, personal, cultural and social factors) and is rooted in the offerings' potential value, technical feasibility and the probability of successfully delivering that value. Timing here refers to whether your offering is ready for the world and whether the world is ready for your offering.

The Apple Newton (MessagePad)* is a famous example of poor timing. Launched 22 years ago (Aug. 1993), the revolutionary Newton was the first PDA (personal digital assistance) and the predecessor of the wildly successful iPad which launched some 17 years later (Apr. 2010). The Newton was discontinued 4 years after its introduction, on Steve Job’s return to Apple, because of poor sales. At least 80,000 Newton’s were sold at $699-$1,000 a piece but likely not many more. This represented less than 1% of Apple's revenue at the time. In 2014, 68 million iPads were sold representing 15% of sales and $26 billion in revenue. The Newton’s major failing was attributed to its poor handwriting recognition interface, a problem that was eventually solved but not until there was a wave of bad press hanging over the device.
                                                                                                                 Photograph by Rama, Wikimedia Commons, CC-by-SA-2.0-fr

Six ways to improve your timing

1) Launch a quality product, service or business model.
The current trend is to develop and launch a MVP (minimally viable product) as soon as possible. This is a good strategy as it allows the early adopters, who share your vision and have an immediate need as well as the technical skills to benefit from it, to give you feedback. However, you must not allow the enthusiasm of the early adopters to fool you into thinking your offering is ready for the majority. The product or service should go through a series of market test-feedback-improvement cycles, often termed beta testing with limited numbers or select customers. These iterations help establish that it is really ready. The majority (of customers) have much higher and broader expectations for your offering: they expect it to be of high quality consistently delivering the promised value, in a robust and easy to use manner, backed by excellent service and support. Disappointing them can be difficult to recover from. (Good examples: the iPad and most things Apple)

2) Focus on the market that values your product the most or pivot to a “killer” application.
it is important to build the maximum positive momentum behind your launch, in terms of units sold or number of customers served as well as good reviews. In order to achieve a strong launch, you need to initially focus on those potential customers with the greatest need or to whom it provides the best value. The majority of customers (who as Geoffrey Moore says are on the other side of the chasm) wait and see how well the offering is received by these early adopters before making a purchasing decision. Offerings that start too slow may never get across the chasm. Often, a superior market segment is identified while developing the product specifications, speaking with potential customers and researching the competitive landscape. Pivoting your efforts to focus on this more accessible segment will hasten uptake and general awareness (Good examples: RIM/Blackberry for business given its security, Autonomous vehicles for industrial applications including mining, Segway for warehouses and security patrols)

3) Organize or establish the necessary supporting infrastructure.
Value is determined by how efficiently and effectively the product or service satisfies the customer’s job-to-be-done. Customers expect complete solutions or at least partial solutions that they can easily integrate with complementary offerings. As a result, if the supporting infrastructure whether provided by your company, partners or third parties is not in place, the perceived value and sales will suffer. (Good examples: Electrical charging stations for electric cars, iTunes for the iPod, 3rd party K-cups for the Keurig coffeemaker, Internet bandwidth for Netflix)

4) Monitor and influence the macroeconomic environment, especially regulatory issues and standardization.
Macroeconomic trends (social, technical, economic, environmental, political, legal/regulatory, ethical, demographic) can have a major influence on the success of a new product, service or business model. In many cases these can be influenced through lobbying governments, participating on industry committees, carrying out and publishing research, supporting independent research, raising public awareness of the issues and impacts, and partnering with groups whose goals are aligned with yours. Regulations, laws and standardization are generally the most difficult, time consuming and slow to influence and hence they need to be addressed as early as possible. (Examples: Uber's lobbying around licensing, Generic drugs and biosimilar clinical testing requirements, Blueray disk standardization, McDonald’s healthier meals)

5) Build broad market awareness, especially for products and services that depend on a network effect.
If potential customers are unaware of your offering or don’t correctly understand it, they are liable to buy elsewhere or even seek a different solution. Investing in marketing and advertising are thus critical to driving interest and uptake. It creates "buzz." Where a product or service improves with the number of users, the so called network effect, it is even more important to drive rapid uptake as this is a significant component of the value. (Good examples: Movie launch advertising, Social media including Facebook, Super Bowl commercial launches including Monster.com, GoDaddy and even the Apple II in 1984)

6) Anticipate the strategic evolution of direct, lateral and new competitors.
Competitors from all angles are continually improving, innovating, adapting and diversifying. Anticipating their moves especially potentially disruptive ones as well as understanding their capabilities, can provide insights that allow you to refine your own plans and strategies for optimum impact and avoiding obsolescence. Technological advances and the associated intellectual property, industry standardization, service contracts, bundling, switching costs, sales channels and branding are just some of the ways firms can lock-in market positions and lock you out. (Examples: The private space rocket race, Tesla encouraging the overall electric car industry, Amgen developing biosimilars, Samsung and Google getting into everything from electronics and communications to financial services and biotechnology, Telecom contracts and bundles)

Is the world ready?

Determining whether your offering is ready for the world and whether the world is ready for your offering is impossible to predict. Nevertheless, efforts can be made to improve your timing and success rate. Given the choice its better to be early, learn and improve than being late and having to play catch up. As the Newton example illustrates:

“Daring ideas are like chessmen moved forward, they may be beaten, but they may start a winning game.” Goethe

“It’s always about timing. If it’s too soon not one understands. If it’s too late, everyone’s forgotten.” Anna Winter of Vogue

by Duncan Jones, Hexagon Innovating and licensed under CC BY-NC 4.0.

* For more interesting history on the Newton, see:
http://www.wired.com/2013/08/remembering-the-apple-newtons-prophetic-failure-and-lasting-ideals/
http://www.macworld.com/article/2047342/remembering-the-newton-messagepad-20-years-later.html
http://techland.time.com/2012/06/01/newton-reconsidered/
http://www.nytimes.com/1995/09/18/business/apple-s-newton-poised-for-a-rebirth.html

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