Robert Capps, writing in Wired Magazine, surfaced an interesting thought that describes a formula for success for our era: “Good enough” may be good enough when it comes to developing new products and services.
Consider the experience of Jonathan Kaplan and Ariel Braunstein, founders of Pure Digital. They initially saw lukewarm results in marketing throwaway digital cameras, but recognized that “customers would sacrifice lots of quality for a cheap, convenient device.” They applied this lesson to the video camera market, which only had higher-end models. Thus, the low-end Flip camera was born — retailing for less than $200, slightly larger than an iPod, with no bells and whistles. The Flip camera was a runaway success:
As Capps points out in his article, the Flip is only the latest example of “Good Enough” tech — cheap, fast, simple tools that do the job, no more, no less. Consider what the hot products have been in recent times:
“We get our breaking news from blogs, we make spotty long-distance calls on Skype, we watch video on small computer screens rather than TVs, and more and more of us are carrying around dinky, low-power netbook computers that are just good enough to meet our surfing and emailing needs. The low end has never been riding higher.”
Does that mean cheap, fast and accessible trumps quality? That may be the wrong question. Rather, there may be a natural market dynamic is at work time and time again, especially as new technologies come on the scene. Clayton Christensen, author of The Innovator’s Dilemma and The Innovator’s Solution, calls such developments disruptive technologies. I had the opportunity to catch Christensen present at the World Innovation Forum last year, and as he describes it, successful disruptors always come in at the low end of markets that were underserved or not served at all by existing market leaders.
The Flip camera is a classic example of disruptive technology. It serves a market niche of people not inclined to run out and purchase an $800 camcorder. And, it would have been difficult for the high-end camcorder makers to support a venture into the low end with such an inexpensive device.
Across all product categories, the high-end brands, typically offered as part of well-crafted and expensive interdependent architectures, inevitably will lose out to more modular approaches offered by commoditizers. Again, disruptors don’t start off going after the customers of the big established companies — rather, they serve customers who may have never had access to such products.
Eventually, according to Christensen’s model, disruptors will creep up the food chain, offering greater quality and more expensive models of their products. In his article, Capps hinted that Pure Digital is already being tempted to beef up its Flip line.
But, as Capps also suggests, we may be at a cusp when value comes from low price and convenience. Such disruptions aren’t limited to devices, it is also being seen in unlikely places. In healthcare, Kaiser Permanente is seeing success in “microclinics” with basic services, set up in strip malls. The military’s relatively cheap, unmanned Predator aircraft won’t hold a candle to supersonic jet fighters, but the Predator has proven its mettle in combat situations across the globe. And even lawyers are offering online services at a fraction of the cost of live consultations.