Events, News, & Ideas

Aurora WDC Director of Research, Derek Johnson, just produced the podcast presentation on how to track private aircraft and its role in the competitive intelligence process. You're welcome to embed it at your own website or blog to share with colleagues. Let Derek know if you have any questions.

My brother Derek was in Denver for a wedding this past weekend with his girlfriend and snapped this photo on one of their trail runs of a warning sign admonishing hikers what to do should they encounter mountain lions - "If Attacked, Fight Back".

This reminded me of the idea laid out in Clay Christensen's missive on Signals of Change when targeting overshot consumers - that is:

"Although they don't create new-growth markets, innovators in overshot market tiers can create new-growth companies by using low-end disruptive innovations to establish a beachhead among the incumbent's least demanding customers. These customers are the most overshot. They are likely using the incumbent's product or service because it is the only available alternative. But they are unsatisfied. They are paying for functionality and features that just aren't important to them. They are most likely to desert the incumbent for a company offering lower prices or more convenience."

The most ironic part of this of course is something we humans tend to do when confronted with mountain lions - we tend to flee. Counterintuitively it would seem, our best bet is to turn and fight.

Similarly as with our human instincts in business, incumbents flee up-market toward their most profitable customers rather than fight for the loyalty of their least profitable ones. Like mountain lions, low-end innovators will chase incumbents all the way to the top of the demand curve and right off the edge of the cliff where there is insufficient market demand to sustain the cost structure of the business. Think GM buying Hummer or Ford buying Jaguar. Both exemplify the instinct to move toward more profitable markets whether or not sufficient demand exists to sustain them. So what should incumbents do instead?

If Attacked, Fight Back

If you're sure you're facing a low-end innovator, don't give an inch and instead fight back, lest they hide behind the "shield of motivation" and sharpen their "sword of skills" (in disruptive innovation nomenclature) enabling them to chase you up-market. Then again, you must make sure you're holding the right territory. You also must be certain you're up against the right foe. Just like you might fight back against a mountain lion, that might be a counterproductive approach if the innovator turns out to be a grizzly bear instead.