The Anti-Marketer

Losing the Courage of Your Disruptions

Warning: this blog post is going to get political.

A common problem I've noticed with potential disruptors is that they have initial success breaking through the noise with a disruptive idea or a disruptive message supported by underlying authentic persona or product, yet as soon as they get the attention they so desired, they start to be criticized by the mainstream pundits for being different or lacking in some respect. So, they immediately tone down the disruption and start trying to appear mainstream, middle-of-the-road, mediocre and above all, not different.

This happens with companies all the time as they mature. They do what MBA schools everywhere teach you to do. You had a disruption. You quickly moved to market leader. Now milk it for maximum profit.

To many, this means optimizing internal efficiency of the business, stripping out costs and uniqueness (because uniqueness carries a cost) to produce goods and services with the highest (theoretical) margins possible. There is a rush by competitors in a marketplace to copy each other's features in a race to the middle where all rough edges are sanded off, nothing is controversial, nothing is extreme. Everyone runs focus groups (which, by the way are worse than useless for pointing to the future and helping with disruption), and all the focus groups tell them exactly the same thing, so they adjust their messages and features and benefits to conform to a mass mediocrity with features that no one really values. All this to maximize their market and  appeal to the broadest possible audience. Ironic, isn't it?

This is the conventional wisdom. Get noticed for being different. Move to the middle mainstream as fast as possible. Unfortunately, when it comes to disruption, the conventional wisdom is almost always wrong.

OK Mr. Anti-Marketer, Give Us Some Examples We Can Understand

In this presidential election season, we have two outstanding examples that almost everyone should be able to identify with: Senator Barack Obama and Governor Sarah Palin.

Without a doubt, if Mr. Obama wins the presidency, he will usher in a new post-racial era in American socialization. It will be no small accomplishment for the first African-American candidate to reach the pinnacle, and become the world's most powerful leader. He has promised change, and certainly in the early days of his campaign, the media and methods by which he delivered that message seemed to resonate as authentic and pure. He had disruptive convictions, and disrupted the primary process. He came from behind as the dark horse visionary, upsetting the Democratic party establishment to win the nomination. He got people excited.

All was going swimmingly, when suddenly a new disruptive force was thrown into the fray. Governor Palin has succeeded by disrupting and disarming at each step of her political career. Unseating incumbents for mayoralty and governorship, taking on her own party's establishment by going direct to the people and espousing a populist message that resonated. Unseat corrupt politicians. Throw out fat cats. A hockey mom indeed, with both charm and grit. If the McCain ticket wins, she'll be the first female vice-president, a populist voice from an outsider state, and will change presidential politics forever just as Obama will if he wins.

Both Obama and Palin were effective in disrupting not just because of their color or sex (although those characteristics are highly symbolic of the change each represented), but because there was authenticity behind the message and symbolism. Neither sought approval of the political establishment, but went direct to the people with powerful ideas representing radically different directions.

Enter Mainstream Spin Doctors and "Handlers"

When disruption is successful, it starts with an unmet or underserved need in the market. The electorate is tired not just of the idiotic "sound bite" bickering in Washington, not just of George Bush, not just of the inability of Congress to get anything done except make sure they break for holidays on time and get their indexed paychecks and pensions, but increasingly of the lack of vision, lack of principle, and destructive actions or inactions that have gotten the country into the mess it is.

Perhaps the most intensely partisan don't feel this way, but certainly everyone without party allegiance does, and many who identify themselves as conservative or liberal, republican or democrat, do as well.

How bad is it?

For the past two weeks, our country's financial system has been on the verge of a train wreck, mostly caused by Congress pushing Fannie Mae and Freddie Mac to be social tools of government, putting poor and high-risk people in houses they couldn't afford. This pressure from Congress resulted in a bonus system set up in those quasi-governmental corporations which highly incentivized executives for the number of loans underwritten to the poor, rather than the financial prudence of those loans, which of course led to massive corruption and a blind regulatory eye. Corruption in false appraisals, unethical mortgage brokering, fraudulent resale of bad paper, and the packaging and hiding the trail of all those bad loans into securitized products that we all got suckered into buying unknowingly through our 401(k)s and mutual funds. Criminal all around, and not much different from the engineer of a passenger train in LA who caused the worst train accident in American history by texting on his cell phone instead of watching the signals.

While this financial train wreck has been gathering steam, political "leaders" have tried to put together a bailout package, initially that completely picked the pockets of the American taxpayer, but without any upside or guarantees that credit markets would unfreeze. Going through several iterations, it's now almost palatable, but still a horrific penalty for those of us who had nothing to do with it to pay. People like me, in fact, who borrowed responsibly, had significant equity, didn't use my house as a piggy bank, and will never get a penny of relief -- the great hard-working and responsible middle-class being ripped off by both the rich and the poor. And, for what has seemed like an eternity, and with another 10-15% of stock market value erased, politicians have dithered, spending their time blaming each other while claiming to seek a bi-partisan solution.

I suspect there are a lot like me who would just as soon seen the entire house and senate fired and replaced with new blood. Unfortunately, that can't happen. But that zeitgeist is what creates the great unmet and underserved needs of the voters.

We need honesty, integrity, authenticity, people who are working for us rather than themselves. People who aren't trying to line their pockets with lobbyist dollars. People who genuinely want to fix Social Security and the tax system, eliminate corruption, defend the country and its freedoms appropriately, regulate as necessary to ensure fairness and consumer protection, but not over-regulate. Eliminate the dependence on foreign energy supplies that not only threatens national security, but introduces immense instability into our financial markets whenever some tinpot dictator wants to throw his weight around. Throw the entire health system in the garbage and start over. And lead with vision, creativity, thoughtfulness and energy.

We need disruptive change.

So that's the foment into which we have not one, but two potentially disruptive choices thrown. At first, Obama seemed fresh, new, articulate, genuine, of the people. He used modern tools like blogs and texting to go direct to the people, bypassing the political establishment. As a result, he generated excitement and fanatical fervor. He disrupted the Democratic party establishment and ultimately won the nomination over the hands-down favorite, Hilary Clinton.

McCain, yesterday's maverick, lacked energy and appeared dispirited and fast on the way to losing. Of course, he had an albatross necktie in George Bush, the most unpopular president ever, but that didn't account for his own relegation to the sidelines as old news while Barack seemed the heir apparent.

McCain knew that he needed a disruption of his own, and went with the brilliant choice of Governor Palin as his running mate. Another fresh face, untainted by Washington politics. High energy. Another historic choice, guaranteeing that no matter who wins the election, we will either have the first black president or first woman vice president. She shook things up quickly with her personality and charm and track record.

Then they got "crammed" by the mainstream

Obama was first. He became imperious, arrogant, above the people not of the people, elitist, clamping down on innovation, touting the party line and the same repetitious negative mantras we've come to hear from every politician before him. When questioned about specifics, he dodged the questions, having been advised by handlers apparently that all he had to do was say nothing to win. Saying something affirmative about his plans was a risk. When challenged, he began changing his position on every issue of significance, moving towards the middle, but in a non-specific enough way that we now have no idea what his intentions are if he wins. All the positive energy of change, the disruption of authenticity, of talking and listening to the people, of any semblance of integrity was lost in very short order. The mainstream owns Obama, and any likelihood of disruptive change was flushed down the toilet. He's just another political hack who wants to win at any cost.

Next was Palin. This has been painful to watch because it's happened so quickly. She was disruptive because she was of the people. Her accent was annoying to many, but undeniably of a place. Many mocked her as sounding stupid, or said she was inexperienced, but in reality it was mainstream carping, both from the political establishment and the media. Her accomplishments actually were the sort that matter to the electorate. Balancing the budget, reducing expenditures, selling off unnecessary luxury assets, attacking corruption. All the while succeeding against the odds -- unseating an incumbent governor from her own party from the position of mayor of a small town. Palin was the living embodiment of Ms. Smith Goes to Washington.

Most of all, what the people, as opposed to the elites, liked about her was her authenticity. She didn't know everything, by any stretch, but that didn't matter. She was trustworthy, not because she had 30 years of experience with foreign governments or because she knew how to work the backrooms and do corrupt deals to move legislation along, but because she didn't. Amazingly accomplished in her short career, untainted, she had demonstrated real leadership, and an ability to take on challenges bigger than herself and win. The kind of leadership that's been missing in Washington for a few generations. Heck, she could have been running for president for all the masses cared.

But then the handlers got a hold of her. She wasn't allowed to change her convention speech script, which quickly made her sound contrived and programmed. She was locked away from the media to be groomed so she'd know exactly what to say and how to handle the gotcha questions. And the net effect? When finally allowed out of the room to do an interview, she didn't sound herself. She was too cautious, too much "on message", too scripted, yet not well enough prepared. In a few short weeks, the mainstreamers stripped her of the number one quality that made her popular -- her genuineness, her hockey-momness, her rural up-country sound and attitude, her authenticity.

Dissatisfaction is Run Amok

So, the things we most liked about Obama and about Palin are mostly gone now. Obama has no chance of redemption -- he is thoroughly a politician, cut from the same cloth as all that came before. Disingenuous, contrived, manipulative, truth distorting, vote chasing, deceiving, power-hungry, willing  to say or do anything to win. No longer any potential to disrupt in any way. We saw this most plainly in his and House Speaker Nancy Pelosi's message manipulation around the financial crisis to finger point at the republicans while claiming they were the ones being bipartisan. Excuse me, Ms. Pelosi -- bipartisanship, by definition, is a two-way street, both sides share in credit and/or blame. You can't be bipartisan if you're blaming the other side. I resent you playing games with the financial health of my country to gain political points. And, rather than assume a leadership role, which would have involved some risk, and by the way, proved that he had what it takes to be president, Mr. Obama chose to "phone it in". They just don't get it.

Ms. Palin has gone a long way down the same path, as her stumbling in the media interviews clearly demonstrates. But she has one last chance to disrupt this election in the vice presidential debate tonight. If she returns to being herself, is willing to speak off the cuff, throws off all the trash that's been loaded on to her by McCain's handlers, and is willing to make a mistake or two to make a point, then she will disrupt, and I predict the McCain ticket will win because of it. If she does not, they will lose.

Hard to believe it all comes down to this, but that's the way disruption works. You gotta be authentic. You gotta know what you are and be true to it. You can't be everything to everyone, unless you want to be nothing to anyone. Yup, I said it first. This is Governor Palin's election to win or lose, and it all comes down to whether she's given in to the mainstream, or whether she chooses to go with what got her there in the first place and disrupt the status quo.

My advice to Sarah? There is no shame in being who you are and making a mistake that takes you down in defeat. There is a lot to be ashamed of if you sacrifice your integrity because you think that's what it takes to win. Go back to square one, and be yourself. The electorate still wants change, and will vote for the side they think can deliver it and truly represent them with, regardless of the last two weeks. If neither side offers genuine change, then the Democrats win by default, because it was always theirs to lose.

It Works the Same for Disruptive Innovators in Business

You have to start with a product that resonates. You have to meet an unmet or under-served need. Both Obama and Palin resonated with the electorate, although in very different ways. Then, you've got to stay true to your message. If you are the creator of the most desired and elegant products on the planet, as Apple has become, then you have to keep doing it. That's what your audience values, and it's why they buy from you. If Apple were to drop a bomb on the market like Microsoft's Vista, how long do you think we'd respect them for? You can't race to the mainstream middle and still be a disruptor. You have to continue to resonate.

Full Disclosure Section

I am a supporter of neither republicans nor democrats. I'm that elusive independent sort that everyone is chasing. And, that's why all this matters.  Those who are allied to one or the other party have already made up their minds, and they are split 50-50. And, that's why disruption is playing a role. It's people like me that are going to decide this thing, and we don't care about political dogma, in fact, we despise it. The sooner you stop repeating the same tired lines, drop the "speaking points" and tell us what we want to know, the more likely you are to win. And, don't forget the genuineness, authenticity, integrity, trustworthiness, leadership, and being willing to stand for something and mean it.

Updates + Related Info

Obama campaign as "disruptive innovation"

Disrupt This

Over time, The Anti-Marketer has evolved from being a catch-all for anything about marketing to being more about disruption, disruptive business strategy and analysis of disruptors. While related to what I want to cover here, that was never supposed to become the main focus. This is supposed to be about disruptive marketing strategy and what not.  On the other hand, I have an increasing amount I want to cover on identifying and scoring disruptive potential.  So, we had to do something about that.

If you've noticed the bigger spaces between recent posts, part of that has been because I've been working on a solution to the above problem and launching some new projects at the same time. Now I'm officially announcing the first outcome of that thinking and work. A new blog, Disrupt This, was begun about a week and a half ago. It seems to be stable, with the moving parts connected, so I want to let everyone know and encourage you to have a look.

More focus

The biggest reason for starting Disrupt This was to increase focus. Basically I felt that the subject of marketing strategy for disruption was getting short shrift, because to tell the whole story, I needed to go into expansive detail about the connection to business strategy, and I wanted to give a "disruptive or not" assessment, which required a lot of explanation, and often very long articles when covering something holistically.

But the business side wasn't getting full coverage either. For example, I wasn't spending any time discussing why disruption is important -- what does it mean to entrepreneurs, investors, companies whose industries are being disrupted, shareholders and employees. I needed a place to talk about the value created by disruption, and how business strategy creates that value. And, I wanted to provide more of a framework for assessing and scoring disruptors objectively.

So, Disrupt This will be that place for objective business analysis: scoring, investment opportunities, connection to business strategy, disruptive or not assessments, and how disruption works.

And The Anti-Marketer?

The Anti-Marketer is still going to talk about disruption, but increasingly the marketing side: how marketing strategy drives disruption, techniques and handy tools, and examples of companies doing it right and wrong. From time-to-time, it will stray off subject into the broader world context, but mostly it will be about disruptive marketing.

There's more about it over at Disrupt This.  In fact, there's already a couple of posts there to catch up on. I hope you'll like it as well as you've enjoyed reading The Anti-Marketer, but I'm guessing some will prefer the content here and others will move to the new blog and bookmark it as your favorite source for disruptive content. And, if it works out, you should start enjoying some shorter, more focused articles.

Be sure to join in the conversation and let me know what you think.

Are Broken and Disrupted the Same Thing?

That's a rhetorical question.  But, in a sense, the answer is yes.  At least for me.

A few weeks ago I managed to break my foot by doing nothing more extraordinary than walking on it.  I wish the story was more exciting, but I can't imagine a more dull and uninteresting way to break a foot.

There I was, packing for a business trip to Toronto when I stepped towards my suitcase and heard a loud, sharp crack, like a good-sized branch breaking, and next I knew I was on the floor in a lot of pain.

So, we went to emergency, spent about 4 or 5 hours to have a nurse practitioner confirm after looking at x-rays -- "Yup. You broke it", and then bring me a pair of crutches and a goofy looking styrofoam shoe, with instructions to see a foot doctor in the next two days.  And, for all their trouble, they sent me a bill for over $2,000.  Now, don't you wish your product or service had demand that was so inelastic that you could charge virtually anything for doing almost nothing?  That is a business in serious need of disruption!

On to Toronto

So, I got home around 2:30am, and still had to finish packing to get to the airport first thing in the morning.  You see, it wasn't just that it was too late to call anyone and postpone the trip, but it was an important strategy meeting, and people were coming from Ireland, so it would have been very costly and aggravating for everyone to cancel.  Anyway, it gave me an excuse to do what I thought was the right thing.

I'm going to skip the gory details of travelling with a broken foot that isn't in a proper cast yet, because I'm going to have another post just to talk about the incredibly miserable service I got from an assortment of airlines (not just to Toronto, but in a subsequent trip to Portugal as well), and how poorly people with a handicap are treated.  It was a real eye-opener, and I'm quite fortunate that in a few weeks, I'll be back to normal -- for many this is a permanent way of life. I had no idea how frequently the needs of people with handicaps are either simply ignored, overlooked and disregarded, or, that there's a seamy underside that looks to take advantage of people who need help.  More on that in a future post.

So, in Toronto I learned to use the crutches, and narrowly avoided a face-plant on freshly cleaned marble floors thanks to the strong arms of two guys that were walking with me. Strangely, although marble is one of the most deceptive and slippery surfaces when wet, the cleaning staff apparently didn't see the need to put out signs warning that the floors were wet.  Hmmmm.  Basically, Toronto was a dry run for what it would be like flying to Portugal the following week to do a keynote address at the International Marketing Congress.  I survived with the sponge slipper for a couple of days, and didn't break anything else, so we'd have to say that was a successful trip.  Oh yes, the meetings were good too.

And then Portugal

As soon as I got home from Toronto, we got to a doctor and had the foot looked at. Surprisingly, he too confirmed that the foot was broken and charged me an additional $360 for that information.  He wanted to put me in a full cast right away, but when he heard that I needed to travel to Portugal, he shook his head (I think in disgust and disbelief -- obviously he thought it was a mistake and that I should simply accept my fate and be immobilized for 6 weeks right then and there) and offered a temporary Air-Cast, which for all the world looks like a Robocop appendage.  See picture.  Oh yes, and another $250 in the meter for that.  Neat contraption, in that it allowed me to deflate the airbags inside and/or loosen the straps as my foot and leg swelled on the plane.  They advised me that if I didn't do this, there was a good chance my leg would need amputation by the time I got to the other side, and that was the reason not to put a proper cast on at that time.  When all was said and done, we'd spent another half an hour, and another approximately $800 for almost nothing.  Who needs the mafia when we can simply visit a doctor?

The Air-Cast did make me a little more mobile, and certainly protected my foot better than the sponge slipper, but it was truly a hulking and inconvenient thing to have to wear.

Of course, the whole point of this story was to get to Portugal.  It was my first trip there, and despite the foot, it was an immensely enjoyable visit.  The people were great, the food was great, the wine even better, the seaside was great, my hotel was nice, the culture was very comfortable, my hosts were gracious and welcoming.  In fact, the only downside was the whole airport experience.  Another industry in serious need of disruption, although not so much on the cost-saving low end -- this is already a well-served space, and the corners being cut are apparent everywhere.  Oh well, as I said, a future post.

Disruption Point

Appropriately enough, the conference title was The Disruption Point, and my keynote put forward the thought that Disruptive Innovation doesn't happen without Disruptive Marketing, using some case studies and graphed results from The Disruption Group's disruption scorecard tool.  That's something I'll be exploring here in more detail in the coming months, so I won't dwell on that now, but I thought as I was delivering my talk how ironic/appropriate it was that I was delivering a talk about innovation, marketing and disruption while I was disrupted in a wheelchair.  And, how unique.  I don't recall ever seeing a keynote address done from a wheelchair before, although I'm certain someone has at some point, if only at a conference for those bound to them. I suspect many speakers would have cancelled, but I had put a great deal of thought and effort into this and wanted to see how the audience reacted. I also wanted to go to Portugal, so the location definitely benefited the organizers.

What was especially interesting for me was to get a European view of disruption and innovation.  The growing strength and especially the single market opportunity for the EU seems to have spawned a new spirit, willingness to take chances, ambition to grow, recognition of opportunities at home and around the world.  In short, European capitalism seems to have new life and there is some great energy over there, and desire to learn and try new things. 

In contrast, the US seems to be a litte bit on the ropes in comparison.  I think we are weary of the Iraq war, the falling dollar and rising prices, especially for oil, fighting terrorism, dealing with airport hassles, the hangover from all the corporate fraud and Sarbanes-Oxley compliance, the failing mortgage market and the toll it is taking on banks and homeowners, encroachment on freedoms that we have always taken for granted in the name of "enhanced security'" (an oxymoron if ever there was one).  Basically, virtually everything is in the dumps at the same time.  We need a good recession and some political and economic housecleaning to clear out the fog and get back on track.

But, I digress.

Again, in a near future post, I will give a review of some of the other interesting Disruption Point presentations at the International Marketing Congress.  Suffice it to say that I was pleasantly surprised at the depth and quality overall. Although there were the obligatory sales pitch presentations from a few, overall this was a much more informative and well-assembled conference than I often see stateside.  I really enjoyed meeting a number of the other speakers, and I think we will stay in touch and continue to share insights.  It definitely helped build out my network some.

I especially enjoyed chatting with the president of the French National Marketing Association, Francois Laurent.  He is a crusty guy with a train of thought at least equal to the controversy I cause, as you might discern from his blog and upcoming book title "Marketing is Dead". Here's what he had to say about the conference (automatic translation to English version here). I've been invited to write a guest post on his blog, and I'm hoping he will do the same for me.  We'll let you know when that happens.

My presentation was well-received and despite the disruption, the trip to Portugal was very worthwhile.

Home of Disruption

So now I'm safely home, have a full cast on my foot, and am already chafing to get rid of it.  It's certainly no fun trying to do anything from visiting the restroom, to going up and down stairs, to getting dressed, to bathing, to going out anywhere.  As I said in a recent email, I can't believe that we can send miniature cameras inside someone's heart and do robotic surgery controlled by a doctor 1,000 miles away, yet when it comes to healing a broken bone, we still have this archaic and inconvenient 150 year old technology to fix things.  I could have arthroscopic knee surgery, or laser eye surgery, and be back to 100% in a few days, but break a bone, and your life will be disrupted for at least 6-8 weeks.

Consider me broken and disrupted.

What I thought about on my summer holiday?! Of course, I'm way overdue for a post, even for a "what I did while I was away" post.  As usual, thank you to my loyal readers for your patience. I have a backlog of ideas percolating, and hopefully I will have time to get to a few of them in the near future.

To get back into the swing, I thought I would recap some observations and thoughts from my time away, and direction I intend to be going over the next few months as a result.

It's funny, but when things slow down, and you simply observe and think for a while, some things become obvious that were always staring you in the face, and things you've previously observed and thought (and written) about either prove themselves true, or new insights percolate to the surface.

The Never-Ending Circle

In the category of "proving themselves true", predictions about the popularity of the iPhone and its likely success were pretty close to bang on, with Apple announcing 1 million sold just 74 days after the initial release.  While many may have expected more sold, this is about the top end of what one would expect for a disruptive product. The usual pattern is to seep into the market relatively slowly and then really take off as subsequent versions add features and correct problems, becoming good enough for more and more people until they reach the tipping point and explode into mass market consciousness. With the unparalleled hype about the iPhone, it's not surprising that it was strong out of the gate, despite many noted complaints about all the ways it wasn't up to snuff (also very common for new disruptive products).

We also discussed the likelihood of a family of mobile handhelds using the iPhone platform, and already we have the next generation iPod, which not surprisingly is an iPhone without the phone.  Along with that new product came a brilliant move of partnering with Starbucks to offer free Wi-fi access at any of their locations.  It's actually pretty smart for both sides, because the days of charging for a Wi-Fi connection are almost over, and this is a way for Starbucks to be a bit ahead of the curve and benefit from the glow that surrounds the iPod and iPhone.

Watch for iPhone Sr. coming soon to an Apple store near you -- I expect it will be outfitted as a true business-oriented handheld, with connectivity to corporate systems, better security, more horsepower, a suite of office applications (note that Apple's iWork product was also upgraded over the summer to offer a spreadsheet tool for the first time and integration with Office 2007.  With the "holy trinity" of word processing, presentations and spreadsheets now covered, the Mac becomes a lot more viable as a PC replacement, and will suddenly be "good enough" for many who've been waiting for a real Microsoft alternative, and the iPhone also gets closer to being a viable substitute for the notebook, especially for road warriors tired of airport security hassles.  Don't know if we'll get it before Christmas, but I promise, the writing is on the wall. 

Microsoft is probably wondering about some of the horrible mistakes made in Office 2007, such as imposing the "Ribbon" interface on power users who not only don't need it, but find that it slows them down. Personally I don't like it because it is a big keystroke waster, makes it hard to find all the things you knew, and it wastes a ton of screen real estate.  Not offering an option to use the old menus or the keyboard interface was a really bad idea.

Microsoft's Office 2007 "ribbon". Seriously, someone thought this inelegant, productivity-sucking mess was an improvement! Click for a larger version if your stomach can handle it.

Although the XML underpinning was a great idea, it also makes it easy for someone like Apple who is better at tools to eat Microsoft's lunch, and with such a huge change in the interface, there's plenty of incentive, and what has anyone got to lose by giving Apple's products a try?  It's a classic case of overshooting the users' needs on the one hand, and not fulfilling them on the other.  And, it's the kind of arrogant decision that could only come from going so long without real competition.  Ripe for disruption indeed!

It's also been noted that Apple's first OS upgrade for the iPhone turned some people's hacked toys into iBricks. I will be addressing that in a future post.

Relationships

For many, summer is a time to re-connect with family and think about relationships. Of course, we did that too, and got to attend that rarest of events -- my parents' 50th wedding anniversary.  Even more amazing, my wife's parents celebrated their 50th a couple of years ago. How many people can say that their parents and in-laws are not only still all alive, but have both managed to stay together for 50 years?  There must be a pot of gold at the end of a rainbow somewhere.

And, check out the picture.  Gotta love the skinny people and skinny ties.  They just don't make them that way any more.

In the category of "growing realization of the obvious", there's another sort of relationship that comes to my mind. Namely, the relationship between marketing and disruptive innovation. With a couple of decades of technology marketing experience behind me, and a current focus on disruption, you'd think I would have spent more time considering the connection. It's a relationship that's lived in my head without expression.

Strangely, Christensen comes close to alluding to it a few times in his books, but never really addresses it.  In fact, it's almost as if all those innovations that he describes were so obviously fantastic products that they grew to dominate markets without anyone making the smallest effort to target the right niches and make them appealing to customers.

I've been developing a theory about that relationship, and looking for the evidence to test it. It's a simple but profound notion. Namely, that disruptive marketing is the secret sauce that takes the potential of a disruptive innovation and turns it into a reality.  Yes, there are accidents along the way, and occasionally disruption happens without intent, but it's become increasingly clear to me, both by looking at missed opportunities for disruption, and at products that succeeded in turning the tables, even against the odds, that disruptive marketing is a necessary component.

I will be delving into this idea in more detail over the next several months with case studies, examples, definitions, and description of how disruptive marketing works.  I hope to elicit a healthy discussion around this idea and get "war stories" from marketers about how they did it, and what disrupts versus what is plain vanilla.

Upcoming Presentation

Carrying on with this idea, I will be making a keynote address to the International Marketing Congress in Lisbon in a few weeks.  The conference theme is The Disruption Point, and I will be addressing the connection between Disruptive Innovation and Disruptive Marketing.  This will be the first public forum where I will be presenting my theories and observations, and I'm looking forward to a great discussion and debate.

More Books

Several books crossed my desk this summer, and I know that I fell asleep reading at least three of them. Lot's of good stuff to talk about there too, but, for now, here's a list -- click on any of them to find your own copy at Amazon.

• Dealing With Darwin: How Great Companies Innovate at Every Phase of Their Evolution
• Beyond Disruption: Changing the Rules in the Marketplace
• Creative Destruction
• What Customers Want
• Blink

What is Steve Jobs Really Up To?

iPhone Debut Rivals Harry Potter Mania, But Will It Last and Why?

Two days before the official launch of the iPhone, the pitch of media, pundit and public anxiety over perhaps the most anticipated new product since Windows 95 has reached a level only Steve Jobs could properly describe -- Insanely Great!  And here I am, contributing to the noise, raising it even a decibel louder if that's possible.

How loud is it?  As I finish writing this post, Technorati says that there are nearly 189,000 blog postings (in English -- there are nearly 305,000 in all languages) that talk about the iPhone.  Compare that with 39,170 that mention Motorola's RAZR, a phone that was the previous biggest smash hit and which literally put Motorola back in the cell phone business after years of decline.  Nearly 6 times the level of mention of a phone which has been exceedingly popular, a design hit, has been in the market since 2004 and which exceeded all other flip phone sales within one year of its release.  And, the number of postings that include mention of the iPhone has been rising by over 1,000 every 4 hours today, and you can count on it growing even faster until the pent up hysteria is released at 6pm on Friday.  And, the chatter certainly won't stop then.

Every major media outlet has weighed in.  The Wall Street Journal, New York Times, USA Today, every computer or telecom related industry trade journal has reviewed it.  Virtually everyone who's been privileged to receive one of the media samples for review has said it's cool -- so cool it almost lives up to its hype.  Like the mania for video game consoles or Harry Potter books, prospective customers started waiting in line outside flagship stores in New York Tuesday morning.  Unprecedented for a phone.

Think about it -- the entire country seems locked in a heat wave, with most major cities experiencing temperatures in the mid 90s or higher.  Yet, people are so lustful of being one of the first to own an iPhone, that they will camp outside a store for 4 days in the sweltering heat to lock in to a 2-year service commitment from AT&T, the worst service provider in the business (more on that later).

So, does all this mean runaway success -- the game is already won?  Or, will there be an equal and opposite reaction when possibility and excitement about the future gives way to reality, and inevitable issues with service, availability, bugs in functionality and unfulfilled expectations?

Apple fanatics say it will be successful because it is ultra-cool, easy-to-use, a breakthrough in design elegance and software sophistication. Naysayers say nothing could live up to this level of hype, and that when things die down, sales will appear lackluster no matter how good they are. Virtually everyone notes the stupidity of getting into an exclusive deal with AT&T and warns that this could be the albatross around the iPhone's neck. Almost all of the speculation and predictions are based on visceral and emotional reactions, and influenced heavily by the reality dispersion bubble that surrounds Steve Jobs, and by the majority belief that "better" wins. 

But if we run with that notion reductio ad absurdum, what exactly does 'winning' mean?  Assuming that the consensus is that the iPhone is a better phone, does it have to achieve market dominance as a late entrant the way the iPod has in the MP3 player space? Surely it doesn't have to match iPod's 80% market share within 5 years! There are over a billion mobile phones already in use around the world.  Is a 10 or 20% market share strong enough to be considered successful? (The RAZR's share is only around 5%.) Is this even the right yardstick to use?

The iPhone Will Be a Disruptive Winner

iPhone will be successful regardless of the metrics used.  It will be successful beyond the expectations of the most enthusiastic pundits.  It will be successful beyond what Steve Jobs thinks.  It will be successful in spite of the apparent deficiencies that have already been noted in the reviews. It will be successful despite partnering exclusively with a single carrier, and the one most despised in the industry -- although this will be the biggest road bump the iPhone faces.  It will be successful because it will change the game -- actually, it will change many games, and therein lies the secret of its success.  It will do all this because it will be disruptive. 

But, predictions are dangerous. And, mine disagree with those of many people whose opinions I respect and whose theories I borrow from. Even though I'm siding with the majority who believe the iPhone will be a big winner, how do I arrive at that conclusion and what exactly makes it disruptive?

Who Disagrees With Me

Before explaining what the highly respected experts are missing, let me first say who some of them are and try to summarize their positions.

Innosight

Innosight is the consulting company formed by Clayton Christensen to sell management services around disruptive innovation. Clay developed the original ideas and theoretical framework that underlies disruptive innovation in his series of books - The Innovator's Dilemma, The Innovator's Solution and Seeing What's Next. Saying he (or his minions) have it wrong is like saying that the pope isn't Catholic.

In January, after the original announcement of the iPhone, Innosight consultant Jonathan Barrett said:

• at $500 or $600, the price is too high
• Cingular (now merged into AT&T) is incapable of providing the same high quality, seamless user experience that Apple customers expect
• iPhone won't work on 3G high speed data networks -- only EDGE or Wi-Fi is supported -- so there won't be anything unique or distinctive about the wireless service
• the deficiencies plus high price point will prevent iPhone from finding a market sweet spot
• the approach of Apple is a "sustaining strategy" (i.e. incremental innovation of the cell phone), not a disruptive one, positioned against deep pocketed, long time industry incumbents who have a lot to lose if Apple wins and will fight fiercely for share

He reaches his "not disruptive" conclusion while still finding many things to like, such as lack of keyboard, design beauty, novel interface, thinness and coolness factor.

Mike Urlocker

My colleague, and the CEO of The Disruption Group, has a stronger technology, industry and investment background when it comes to the iPhone, having been the original analyst at UBS to identify the RIM Blackberry as a disruptive product and the first to recommend RIM as a strong buy. Mike has worked for and advised software companies on marketing strategy, and at UBS he was executive director and member of the global technology and telecom teams.

In his Disruption Scorecard evaluation of the iPhone, again shortly after the original announcement in January, Mike rates it a B-, and labels it likely a hit, but not very disruptive.  He reasons that the product appeals to people who want status and high design (the coolness factor) and are willing to pay for it, but that it doesn't have much potential to change the game like Blackberry did, or upset incumbent rivals such as Nokia, Motorola or Samsung.

Laura and Al Ries

Branding and positioning experts Laura and Al Ries (Al Ries and Jack Trout wrote the original book that defined the concept of positioning) take a different tack, identifying the iPhone as a "convergence" product, and the iPod as a "divergence" product. The concepts of divergence and convergence come from Evolution Theory -- basically, the idea is that there is a common origin to all species, but that over time the "tree of life" diverges as natural selection creates specializations to adapt to the environment.

Similarly, Al and Laura (and other pundits too) argue that the natural trend for all products is towards divergence and specialization to better suit consumer needs. They claim the iPod was successful because it was a divergence product. Moreover, they argue that most "convergence" products fail -- convergence being when multiple feature categories are combined in a single product (in iPhone's case, an iPod, cell phone and PDA).

Their position is that consumers prefer products that are optimized to do one task well, rather than a lot of tasks poorly, and they further claim that the iPhone has been over hyped and most over hyped products fail to live up to expectations, therefore the iPhone will be a failure.

Hmmmmm.

Most of the others who claim the iPhone will be a failure base it on their own personal biases rather than what the market as a whole is likely to do and why -- "I'm not going to get one because . . .".  Name your complaint here. Price, lack of keyboard, slow data network, AT&T as carrier, touch screen keys too small to hit accurately, it will have bugs in version 1.0, etc.

So, what are they all missing, and more to the point, what is Steve Jobs really up to?

The Label Problem

One of the problems with evaluating anything analytically is that we get hung up on labels rather than thinking about what the labels mean and why the rules of thumb associated with them usually work. In the case of the iPhone, there are many labels and definitions being applied that are throwing people off the scent of what's really happening and my belief is that this is deliberate. Yes, Steve is trying to fool the experts and fly below the analytical radar, ironically while mounting one of the most pervasive and successful hype build ups of all time.

To start with, the name iPhone is a mislabeling. While iPhone does indeed have phone capability in it, it is not a phone. Suspend disbelief for a second, walk with me a little, and it will all make sense soon.

Is your laptop PC a phone because you can make GoogleTalk or Skype calls using it? If not, why not? Does it matter that it isn't the only thing you do with it? What if that was the most important thing you did with your PC, because you make a lot of calls to India, and free long distance service is worth a lot to you? Still not a phone? Well, if your PC isn't a phone, is it a typewriter? I know that the primary purpose for my PC is typing documents, blog posts and html. I print a lot of those on paper. Mine is definitely an evolved typewriter. Or maybe your PC is really a gaming console, or a mobile email device because you use it at home, at work, at Starbucks and at hotels and other wi-fi hotspots around the world to send and receive emails. Or, maybe it's just another example of a highly unsuccessful convergence device? Or, do you still think your PC is something else?

The iPhone is Definitely Not a Phone

So, if you were willing to suspend disbelief and suppose that the iPhone might not be a phone, what is it then? Let's start with why it's called an iPhone. iPhone is both sales positioning and a ruse. iPhone is positioned as a phone because Apple knows that in that niche, the market is sorely lacking for a stylish, easy to use, fun, visual, well-designed and well integrated device. It is a first if only because of its elegance. Don't believe me? Then why isn't it really an evolved iPod?  One with a really big screen, beautiful graphics and music navigation, and by the way, it includes the ability to make phone calls?

The reason is because Apple believes this is the purpose that you will understand out of the starting gate, and for which it can convince people to shell out $500 or $600 to get the most stylish and coolest gadget on the block. Therefore it is positioned as a phone, and that's the basis on which everyone is analyzing it, and writing glowing reviews, but it isn't a phone. It's also a ruse, because Mr. Jobs has a much higher goal in mind than selling the world's coolest phone. But this is an effective way to divert attention from the real disruption that is happening until it's too late.

Why This Makes Perfect Sense

Let's get a historical perspective to make a little more sense of this. When Alexander Graham Bell invented the telephone and tried to sell his patents to Western Union in the late 1870s, how do you think he described what it was? No one had a framework to describe how revolutionary the phone would be as a communications tool. If you wanted to talk to someone, you went across the street, knocked on their door, and if they were at home or in their office, you could talk. Initially, outside of the securities industry, people couldn't even understand why they would want a phone. Especially since the first version could only work over short distances due to signal loss on the wires. There was no network, there wasn't any need for communications to be sped up that much and nobody else had one, so how much use was it?

Bell considered the telephone to be a way to transmit voice over the telegraph, and that's why he thought Western Union would buy his patents. Bell viewed the telephone, perhaps one of the most disruptive technologies of all time, as an incremental ("sustaining") innovation over telegraphy. (Western Union viewed it as being worth less than $100,000 since they rejected the offer to buy the patents for that much, although they later tried to buy them for $25 million.) Do you consider your telephone today to be a highly evolved telegraph? If you can imagine that, what about your cell phone, or is it different because it's mobile? What then of the iPhone? Just a space age telegraphy device with no keys or dials?

The important thing to note here is that in the early days, it is difficult to imagine the application and importance of disruptive innovations if they really are, because no one has a framework to understand its value. That's why the car was positioned as a horseless carriage. That's why TV was radio with pictures. That's why the first computer was called ENIAC -- or the Electronic Numerical Integrator and Calculator.  That's right, it was a calculator that cost 200,000 man hours to build, $486,804 in 1946, and used $650/hr worth of electricity to sit idle. Some times the original naming belies the importance of an innovation. If not for the need to calculate missile trajectories more quickly and accurately during the war, the first computer might never have been built.

And what of convergence versus divergence? Most consultants and branding experts will tell you that convergence as a strategy almost always fails, because the more things you combine into one, the more compromises you have to make in design, and each individual function is sub optimized at the expense of the whole. In disruption theory, a parallel idea says that as companies continually add sustaining innovations to better meet the needs of mainstream consumers and/or differentiate their products, they eventually overshoot the needs of most of their customers. Convergent products usually exceed the needs of all but a small minority of any prospective customer base. After all, who needs every tool on a Swiss Army knife?

That's the theory, but the reality is that when you try to apply simplistic labels to categories or products and then assign attributes or success factors based on those labels, you can miss the forest for the trees. In the case of convergence versus divergence, this is especially true, since which bucket you assign a product to varies based on whether the combined elements are truly synthesized in such a way that they cannot be separated and provide the same benefit, or whether they are just bolted together and not really integrated to optimize overall performance. Ask yourself whether the combination of radio technology, speakers and a cathode ray tube to make a TV represents convergence or divergence? Is it the evolution of radio, or are the elements synthesized in such a way that they create something truly new? If I turn on the TV, but listen to it from another room, is it still a TV, or is it a radio? Did the TV fail because several technologies converged? What about personal computers?

So what is the iPhone, and what is Steve really up to?

It's a handheld one of these

The iPhone is disruptive because it isn't really a phone, or for that matter, an iPod. If it was either of these, then as cool and elegant and nicely designed as it is, it would still just be an incremental or "sustaining" innovation.

Remember that the iPhone has a complete version of the Mac's OSX operating system embedded, plus it lacks a keyboard and has a truly novel interface with seamless integration between different functions. With all that, it can be considered as the first truly personal handheld entertainment and communications computer. It can also be considered the first handheld business computer powerful enough to replace a notebook for road warriors tied of lugging all their paraphernalia through airport security. In other words, it competes in a different class of products -- not as a phone, not as a smart phone, and not as a computer.

It serves the un- or underserved need for lightness, simplicity, ease of use, true integration and is simple enough that my mother could use all the features without thinking about each being a different application or device. Competing against laptops, it doesn't yet have all the applications my PC has, but it is "good enough" that many will be ready to give it a try. And, there are already numerous applications you can download to enhance the functionality for your needs, and many more business applications (especially things like bluetooth connectivity to a real keyboard, document editing, spreadsheets and presentation capability) which will run in Safari are likely to come.  And, when compared to a laptop, it is disruptively inexpensive. Analogous statements are true if you evaluate it as a personal communications and entertainment computer.

This is, I think, what the huge excitement is about. People innately sense that this is much bigger than a phone, they just aren't yet able to articulate what is significant about it, and how we'll look back on Friday June 29, 2007 as one of those days when everything changed. 

And, it looks really cool and I desperately want one.

Steve's End Game

The iPhone is a trojan horse. Steve lost the first battle between the PC and the Mac because he was less sophisticated as a business person in those days, and didn't fully appreciate how difficult it would be to convince the masses that they needed an expensive personal computer before they had even used one at work. In 1984, the Mac exceeded the needs of most potential customers, and looked like a toy to business (unless your business was about graphics or publishing). The DOS-based PC was the "good enough" disruptive innovation of its time because it catered to mainframe users used to buying computing equipment from IBM and used to looking at green-screen character-oriented terminals.

This time it's different. Almost all of us use PCs daily. And, most of us are tired of the now clunky-seeming interface which isn't much different or easier to use than the initial Mac interface of more than 20 years ago. And, we desperately need a single, small pocket-sized device that can handle all our business needs while on the road and enable us to leave our 10 pound paperweights at home. Something that's easy to get through airport security, and makes my life less complicated.

Moreover, at the price point of $500 or $600, this is something that every road warrior can afford today, if only as a style accessory. So, the decision won't be made or inhibited by corporate IT departments. Sure, they'll try to block connectivity to their servers on security grounds -- they always do, because they think computers are about them, not about the users' needs. Of course, the iPhone includes VPN connectivity, and most have already got their heads around that. But so many executives will have these that just like the Blackberry before it, corporate acceptance will be very fast. And, once you've adopted the iPhone as your traveling computer, how much of a jump will it be to make your next notebook/desktop for office use be a Mac?

My Prediction

As a phone, the iPhone will be exceedingly popular. If production can keep up with the demand, I believe that Apple will sell more than 2 million before year end 2007 -- if they can scale fast enough and have a new version out in time for Christmas, maybe as many as 5 million. Steve Job's stated target is 10 million sold by end of 2008. Given that there will probably be at least 2 more versions of this product before that, I believe 10 million is a very low estimate, set so that expectations can be smashed -- again, it will depend how fast production can gear up to handle demand and support several different models, but 20 million should be easily reachable.

As additional business applications start coming online, probably early to mid-2008, expect sales to really take off. We will no longer be judging the iPhone as a phone when that happens, but as a true micro-mini sized PC which revolutionizes the entire tech industry and rejuvenates innovation throughout Silicon Valley. At that point, the iPhone will disrupt Blackberry, Nokia, Motorola, Microsoft, Samsung, and maybe even Nintendo (to name a few).

see Seth's Prediction Page

Postscript

And, what about AT&T? Well, that truly is the fly in the ointment and Steve's Achilles Heel. AT&T is brutish about customer service, slow to innovate and slow to reform. They will try to extort every possible advantage in pricing and contractual obligation that they can. AT&T knows nothing if not how to exercise a monopolistic advantage.

Moreover, AT&T lacks the broadest service coverage, and no single carrier (in the US, at least) is right for everyone. We all know that signal strength and dropped calls vary based on where you spend most of your time. So, if you live in an AT&T dead zone, tough luck. Their EDGE network is slow, and they don't have anywhere near complete enough coverage with their 3G services (which aren't built into this version of the iPhone anyway).

It's hard to understand why Job's wouldn't let the market decide if he wasn't going to lease his own service. With a single carrier that many will be unhappy with, Apple will take the brunt of service complaints -- if I could go anywhere, I'd blame the carrier, not Apple.  Verizon has the best coverage and fewest dropped calls. T-Mobile has the best customer service, best rates, and happiest customers.  Maybe AT&T (Cingular at the time) was the only one willing to play ball on the technology changes that Steve wanted.

Regardless, if service complaints and customer mistreatment stories start hitting the press, expect a negative backlash that could take a serious bite out of sales growth and long term success. On the other hand, wide scale Wi-Max is a technology whose time may well have come -- it would make perfect sense for independent Wi-Max providers to bathe cities in their signal, and then AT&T could become almost irrelevant in the equation (if Wi-Fi VOIP capability exists).

Other Links

• iPhone Q + A
• iPhone facts from Engadget
• Vote for the iPhone: Hit or Miss
• Microsoft Surface vs iPhone???
• Consumerization of IT: iPhone Skirmishing Begins
• Apple Innovation Blog
• Apple Introduces Safari for Windows
• Safari Beta for Windows Tops 1 Million Downloads in First 48 Hours
• RIM versus Apple, Integration versus Modularity
• iPhone Application List

YouTube: A free video resume distribution service

Lest anyone doubt that YouTube is disruptive, I was reminded again of how much a couple of weeks ago when I received an email from a cousin I haven't seen in 20 years. What struck me about the email was that it was so mundane, so commonplace in the new web world, and something that couldn't have happened just a couple of years ago.

I'm not talkiing about the ping from a long-lost relative. I get those (and have sent some) from acquaintances who are trying to reconnect after 5, 10 or 20 or more years on a semi-regular basis.

Rather it was the attachment of a YouTube video which not only provided me with the update that he is now an actor, but included a sample of some TV drama work that we could easily forward to anyone that we might know in the business. And I just thought how remarkable it was that it was so cheap and so easy to send out a video resume for someone in his line of work.

Shawn's demo tape

I'm sure that actors have been sending out video tapes to studios and agencies and in advance of commercial auditions for years. But think about it. To get just a couple of hundred tapes professionally copied and then couriered out would have been a minimum of a couple of thousand dollars. Although necessary, it was hardly within the budget of a "starving actor".

But now, it's not only free to reproduce and send, you can instantly send it to everyone you know, and by extension, reach their network of contacts as well, or be searched and seen randomly by anyone in the world. So now we have lower cost, broader reach, and persistence (doesn't get thrown in the trash).  And, that doesn't include getting posted on my blog, where potentially dozens or hundreds of marketers and advertising specialists might see it and think he's just perfect for a shoot they have planned.

Not Aleksey Vayner

It's worth pointing out that this is not a tragic-comic self-congratulatory career killer like the famous Impossible is Nothing Aleksey Vayner video "resume". If you haven't seen this, I heartily recommend you watch it a few times, both for a good laugh and to study what not to do.

Aleksey's disaster

It's also not the goofy sort of bad job posting site like Vidrez.com.  When you check out this site-provided sample, you'll know what I mean, and wonder why on earth anyone would do this and what value it adds.  If you're desperate for a job, and considering this, all I can say is "Don't".  Just stick with Monster and the traditional resume.  For the life of me, I can't discern any good reason to pay these folks to be hidden behind the site's registration requirements, rather than simply doing it myself for free on YouTube (a key consideration for low end disruption).  Besides, this is just too icky for me.

Perhaps the time is coming in the not-too-distant future when video resumes will become normal outside the acting business. That has huge disruptive potential, although It seems like if it happens, it will be critical that job seekers carefully consider the appropriateness of what they do.  Is a mock interview a good idea -- or does it come across as boring and phony?  If you're in the media or artistic expression fields, showing a sample of your work certainly makes sense.  If you aren't, it's probably best combined with a blog (which shows off your thought process), and only with a sense of self-awareness, humor and humility.  Then again, the persistence and accessibility that are a big advantage when you're young and broke could well come back to haunt you 20 years later when you're being considered for the SVP position at Bank of America.

The idea seems to have most potential for disruption when combined with other media, such as emailing links to friends and family, as Shawn did, or including a link on LinkedIn, or as part of a website or blog. It would also be a useful tool with judicious screening (no pun intended) -- if I'm an executive recruiter who's narrowed down a set of candidates to 5 worth presenting to an employer, and I've vetted the content, asking each to respond to the same 3 questions, it could well be useful to the employer to prepare and to save long distance travel expenses if one candidate is clearly inappropriate (a bad fit culturally, for example). Much hinges on whether we are mature enough as a culture to get over the "equal opportunity" objections that are inevitable, even though all the same objections could be raised about an in-person meeting. It sure raises interesting ideas about how something as simple as a public library of free and searchable video will change the way we are doing things in just a few more years.

Other Points of View

http://blogs.msdn.com/heatherleigh/archive/2006/10/17/the-exploding-video-resume.aspx

http://hirevue.com/blog/?p=16

http://www.ere.net/articles/db/DDFA0ECCDE2C4005A476D53EEFEC18A7.asp

http://www.recruiting.com/the_newest_job_hunting_skill_videographer

Services that Overshoot the Need

http://www.gocvone.com/cvone_live.244.0.html

http://www.vidrez.com

... and Video Interviewing

http://www.hirevue.com/