Value Creation at its best.

Great article at The Next Web about how Apple’s long term strategy will likely dominate the tablet market.

They project a ten year dominance, similar to the experience of the iPod. In the article they provide, what I believe, are 7 compelling reasons for their dominance.

1. They are outselling (not just out shipping) by a factor of 10 to 1.
2. Tablets are not smartphones.  So competitors have to compete with Apple on device profitability alone.  In the tablet market there are no data plan subsidies to back them up.
3. Apple’s 336+ stores provide a high touch environment to learn whether to buy an iPad.  Moms and grandparents will be converted more by that experience than a tethered tablet at a Best Buy or WalMart.
4. Apple has the profit and cash reserves to invest heavily in the latest technology (solid aluminum skins) that make their designs more elegant and user friendly commanding higher prices and better experiences.
5. Apple, based on the above, has altered the relationships with suppliers, obtaining agreements that lock in their margins and lower cost advantage on the new technologies they fund.
6. Apple’s ecosystem.  Mac, iPod, iPhone, iPad.  Once they pull you into the fold it’s hard to leave as the devices work so well together.  This phenomenon is sure to accelerate with the advent of the iCloud in the fall.
7. It works better.  Technically the user experience is smoother with the iPad.  They give reasons why the touch interface works better based on the underlying technologies and iOS software.  Watch for improvements in the next iPad.

It’s a compelling read on value creation at its best and the execution of a business model strategy.  A must read for all executives about how to pull all the pieces together into a cogent sustainable differentiation strategy.

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Listening and interpreting signals

No-one is destined to be a me-too player. We can all be game-changers.

The fourth in a series of posts about how businesses can own their future.

Here is what we have covered so far.

1. Game Changing Part 1 – Analyzing the Future
2. Game Changing Part 2 – Sensing and Adapting
3. Game Changing Part 3 – Experimenting

There are interesting developments all around us.  Many of these flash by without notice.  It’s our future rushing by.  All we have to do is grab one or two to take control of our destiny.

Here’s three unrelated developments (signals) that when combined, give us a glimpse of the seemingly invisible opportunities that surround us.

Signal 1: Robot avatar

Anybots now sells a rolling robot avatar that lets you be available anywhere on-site, 24/7, in informal settings.  As noted in a recent Fast Company article:

Signal 2: Long distance natural motion control

Taylor Veltrop has connected a Microsoft Kinect to a miniature robot, controlling it through his own motions.  You can learn more about it here.

Kinect controlled robot

This is early stages so there are no commercial applications yet.

But then, there’s signal 3.

Signal 3 – Nintendo 3ds

Nintento recently launched its new hand-held game that features 3D viewing without the need for glasses.

Game-Changing Conclusions

Put them all together and what do you get?

A full size robot avatar, that you control from afar through natural body motions, that lets you see what’s going on in 3D.

Imagine the behaviour changes that will spawn:

1. in distance medicine
2. in servicing remote locations
3. in servicing important clients
4. in policing
5. in border security
6. in meetings

That’s how game-changing works.  You:

• see signals,
• put them together,
• project the behavior changes that will occur,
• and then imagine a way to use those new behaviors to make your company stand-out.

In so doing, you not only see into the future before your competitors do, you get on board early and learn how to use it before everyone else does.

Questions to consider

1. Are you and your company signal watching?  (formally? informally? at all?)
2. Do you meet to discuss what they might mean to your situation?
3. When assessing the signals do you discuss what new behaviours might emerge?

Thank-you for visiting www.ennova.ca

Value Disruption Alert

Wow, if this is true a massive value-disruption is about to occur.

Fast Company reports that Microsoft’s Translating! Telephone, exhibited at the Silicon Valley TechFair, brings Universal communication unhindered by language differences a little closer to reality. This VoIP program combines three Microsoft technologies–speech recognition, translation, and text to speech–to create a speech to speech and text to speech translator that’s surprisingly accurate.

The Fast Company article says it’s currently about 80% accurate, but good enough that two programmers (German and English) were able to debug a program.

So now, project this technology forward in 2-4 years when a mobile version becomes available and consider the behavior space implications.

1. Instead of being stranded helpless in a foreign country not understanding the signs on the buildings, or even able to ask simple directions you can now become independent.
2. People who wanted to work in foreign countries but couldn’t because of language restrictions, can get postings.
3. The number of people you can collaborate with virtually has gone from millions to billions.
4. You understand what those arrogant French waiters in Paris are saying about you and can give back in kind.
5. Marriages between two people who don’t speak each other’s language will take place.  A little help to “Love conquers all”.
6. An entire industry crops up to deal with the issue of translating technical terms in support of the tool.  So, what exactly does quantum physics really mean in English?
7. Immigration costs plummet as new immigrants can assimilate more rapidly into a country without relying on taking “XXX as a second language” courses.
8. And my favorite.  They figure out how to translate Politician speak and we finally find out what they are actually saying. (Which I suspect is essentially nothing.)

Questions

By now, if you’ve been following this blog, you’ll recognize that all great innovations create new behaviors.

1. What new behaviors do you see emerging?
2. How would you use it personally?
3. How could you use it in your business to drive more revenue?

Thank you for visiting http://www.ennova.ca

The factors that define value creation

I’ve been blogging recently about  how Behavior Space predicts new product or service success.  This post uses a recent announcement by FORD to drill down into value creation by exposing the role Relationship Space plays.

Ford recently announced an agreement with Microsoft to incorporate its Hohm technology into Ford’s new Electric Vehicle.  As the article in Fast Company explains

“. . .the home energy management service will be integrated into the Ford Focus Electric in 2011, another unnamed hybrid in 2012, and a third, yet unnamed hybrid in 2013.  Hohm will assist drivers in figuring out the best time to juice up their vehicles based on when electricity rates are lowest. The service might indicate, for example, that electricity is cheapest between midnight and 6 a.m. on a certain day–a potentially money-saving piece of data. In addition to saving drivers cash, the feature will also hopefully help utilities reduce consumption during times of heavy stress on the electric grid.”

In previous posts I’ve talked about how new behavior space helps create value.  Specifically this post about the Apple iPad and this post about the Google Nexus.  The concept I introduced in those posts was that a new product or service creates value by allowing new behaviors to emerge.  The product or service is only as good as the new behavior that it enables the user to express.

Well, that’s not entirely true.  New behavior space is simply a stepping stone to where value is actually created.  Let’s look at the Ford example above to understand why.  While the Ford’s New Electric Vehicle has many new capabilities I’m only going to focus on the Hohm system and the fact that it will help users “figure out the best time to juice up their vehicles based on when electricity rates are lowest.”

In this case, the Hohm system enables the user to automatically pre-schedule when to buy energy (electricity) based on reliable forecasts of energy costs.  That sounds neat.  Instead of being at the mercy of daily price swings in gasoline I now have more control over the price I pay for energy by scheduling “fill-ups at home” when energy costs are lower.

So a new behavior emerges – pre-scheduling energy fill-ups.  But, there isn’t really any value in the behavior by itself.  Who cares that I can pre-schedule?  The benefit is lower prices for energy, not the behavior that enables it.

So do all behaviors have to end in lower prices to create value?  Of course not. There’s more going on here.   I’m going to take a moment and introduce the new concept of Relationship Space.  And then, tie them both together.

Life = Relationships

All of us exist in time and space.  As we move through time and space we interact with the things around us.  So at its most fundamental, our lives are comprised of all the many and varied relationships we have with:

• time (when we are)
• space (where we are)
• ourselves (who we are)
• other people (by themselves and in groups)
• objects (inanimate and living)
• ideas (how and why we are)

Of course its very complex and interactive.  But, if we could add up all our relationships, taking into account the good and the bad, we could conceptually measure the size and quality of our lives.   We could compute for ourselves our Relationship Space.

So what creates value?   Value is created when you improve someone’s Relationship Space by making it bigger or improving its quality.

Value = Growth in Relationship Space

Now back to Ford and Hohm.  So, the Hohm system enables a pre-scheduling of fill-ups to emerge (a new behavior).  That changes the users’ relationship with an object (the car), and themselves.  The relationship with the car changes because the price to operate goes down.  The relationship with themselves changes because they feel more in control.  To receive these two relationship benefits all they have to do is adopt a new behavior – pre-schedule fill-ups.

A side note and harbinger of more to come on the topic of value creation:  If Ford is smart they will make the actions to do the pre-scheduling very easy.  (Apple easy mind you, not Microsoft easy)

Summary

1. Our lives are the summation of all our relationships (Our Relationship Space).
2. Value is created when our Relationship Space grows.  (Value = Improvement in quantity or quality of Relationship Space)
3. New behaviors change Relationship Space  (both positively and negatively).
4. New products and services that create value, (versus mimicking existing value), enable new behaviors to emerge that improve Relationship Space.  (iPad, Wii, Hohm system above)
5. The actions a user needs to take to allow the new behaviors plays a role (More on this phenomenon in later posts).
6. So, when thinking of new products or services, work your way through the new behaviors your product will cause to emerge and how will it impact your users’ relationships.

Questions to consider

Test yourself with the following.  Think about a recent purchase that excited you.

1. What were your new behaviors?
2. Which relationships did it improve?
3. How did it improve them?

Oh, and if you’re not convinced about life = relationships, see if you can describe anything in your life that is not a relationship in one form or another.  If you find something, please let me know in the comments.

Thank-you for visiting http://ennova.ca