This post is cross posted from my LinkedIn account. You'll find most/all comments there.
It's hard not to argue the #fail scenario as it pertains to the video conferencing segment. The technology is not a barrier, but mass adaption never ever quite happens. Maybe 2016 will be the year! Despite arguments about it being too difficult to use, I would counter by asking if you've actually hooked up and used a Lifesize Cloud solution with a mix of conference room endpoints and soft clients? Or Starleaf*? Is it too expensive? Not expensive enough? Is it too hard to buy? Is it an essential need or just a nice to have? Is it the business model? Is a million minutes of video use a big number? With the backdrop of exploding video usage, why is enterprise video in the tar pit? Or is it?
This is the third and final installment on my innovation series. Today I want to talk about disruptive innovation. You can find the earlier two posts here:
- Non-linear change. Setup the environment where innovation accelerates.
- Relentless innovation. The power of continuous improvement.
2015 is the 20th anniversary of Clayton Christensen's Disruptive Innovation Theory and the Harvard Business Review has just published a new article, "What is Disruptive Innovation?". Clayton argues that the core concepts are now being widely misunderstood and misapplied. You should take a look at the HBR article first before going further. He uses the Disruptive Innovation lens to look at Uber. I'm going to use the same lens to look at video conferencing (and in particular Lifesize) and the result is educational ... at least for me.
Did you read it? One last chance ... . They have refined it over the years, so don't fall into the trap of using old info based on the paper or book! BTW, I don't completely agree with the conclusions that Clayton makes on Uber (or some of his other past analysis on the smartphone) but that's another topic for later. First things first.
Christensen admits that identifying disruptive innovations can be tricky, but the strict definition of the theory demands that it start form one of two footholds.
- Low-end foothold. Fly under the incumbent's radar. They are serving and protecting their most profitable and demanding customers. Find less demanding customers. Incumbents will ignore you.
- New market foothold. Find new customers. Turn non-consumers into consumers.
Let's look at Lifesize in the context of these two footholds. Certainly #2 never applied. The targeted customers were the incumbent customers. Rather than find less demanding customers with good enough products, Lifesize had a clearly superior product at a lower price point. WTF? Awaken the sleeping giant. In contrast, there are several new entries that started in the low-end foothold (Blue Jeans, Zoom, HighFive, TelyHD, Biscotti, ViaVideo, Slack, HipChat webRTC, Twillio, Hangouts come to mind). You can see below that Lifesize was not on the low-end foothold trajectory.
The authors identified 4 important points that get overlooked or misunderstood.
- Disruption is a process.
- Disrupters often build business models that are very different than the incumbents.
- Some disruptive innovations succeed; some don't.
- The mantra "disrupt or be disrupted" can misguide us.
Disruption is a process. The path from small experiment fringe territory to mainstream is important. Lifesize started mainstream and arguably at the exact point the incumbents normally occupy (where the product performance overshoots the customer needs). They will not surrender that ground. Much more interesting in 2016 will be the path of cloud deployments of the technology coupled with new business models. Another chance.
Disrupters build different business models. Whoops. This one is a big miss. Again the technical change to cloud deployments and long needed changes to collaboration will force different business models. Finally.
Some succeed, some don't. This is about the definition of disruptive innovation, not success or failure. Lifesize is successful on many levels, but could the application of disruptive innovation strategies led to a bigger/different result?
"Disrupt or be disrupted". Incumbents should respond, but not overreact to disruption. They should not dismantle the mature, profitable business that should be sustained. Continue to strengthen relationships with current customers. Create a new division focused on the disruptive growth opportunities. That requires the separate (and simultaneous) management of two very different organizations at the same time. Amen. Nobody said it was easy.
In the case of Lifesize, the business model point and the "disrupt or be disrupted" point are the critical ones for examination as well as the lack of the proper foothold. It was not a disruptive path, but rather a sustaining one.
Why does it matter? It matters because the tactics that you take as a new entrant or an incumbent are very different depending on whether you are on a disruptive path or a sustaining path. As Lifesize nibbled away at Tandberg, Polycom and Radvision the correct strategy for the incumbents was to mostly ignore. When a newcomer offers better and cheaper products, then the incumbent will accelerate their own innovation engine to defend their business. This will take the form of both marketing FUD as well as real products. To quote from the article, "The data supports the theory’s prediction that entrants pursuing a sustaining strategy for a stand-alone business will face steep odds.". Alternatively, if the new entrant is truly disruptive, then it poses a massive threat to the incumbent business ... but this likely plays out over a long period of time. The disruptive threat can not be ignored. Cloud deployments, much cheaper endpoints (or none at all), new business models and completely different collaborative products are a real disruptive threat. The incumbents are certainly not ignoring. Tick, tock. Tick, tock.
On the broader topic of enterprise video (call it what you want ... conferencing, collaboration, communication, unified ... ). Has it been disruptive? No. Has it lived up to it's potential? No. Are there opportunities to re-invent it? Of course. Almost always victory is snatched away from the jaws of #fail.
If you want to take a look at one other "collaboration" tool that has made a massive cultural impact then read this article in Vanity Fair. Is Tinder disruptive or sustaining? It is certainly shocking as I found myself swiping left and right on my neices/nephews phones over Thanksgiving. It was their account, not mine!!
* I mention Starleaf because I believe that Lifesize and Starleaf are both in a unique position to be disrupters. The window is tight, but they both have the critical connected device that attaches to a competent backend service. They are at the low-end foothold. Others may have been disrupters before, but the field is closing quickly. Cisco seems to be in a very good sustaining place with both the Acano news as well as things announced at UC Summit. And of course they are .... CISCO. Polycom ... where are you?
Off to go skiing in Breckenridge, so Happy New Year. I have a backlog of 50+ topics queued up in Evernote, so 2016 should be a target rich environment for LinkedIn posts. I'm also going to start writing Airstream travel pieces on Medium. You will always be able to find both work and play material on our personal website. Cheers, thanks for participating and see you again in January!